Strategic Analysis of Haier

1、戰(zhàn)略管理課程論文題 目 “海爾”戰(zhàn)略分析 Introduction1.1 A brief introduction of Haier“sincere forever”-Haier , this is Haiers vivid manifesto and the words that the image of Haier enterprise have been rotted in the hearts of people .Over less than 30 years of accumulation and precipitation , it has obtained remarkable

2、 achievements. Since 2002, Haier has been valued at 85.326 billion Yuan which has been the Chinas most valuable brand for 5 years. In 2010, in the worlds innovative companies list of top 50, Haier which is the only brand of appliance is ranked at 28. For the first place, it started farming the produ

3、ct of refrigerator alone .After that, it walked “the multiplication strategy”, which was first entered into the other different kinds of household appliance production and then walked into the completely strange industry of finance and medicine. In recent years , it has been walked form the “the int

4、ernationalization” path to the present “global brand” path .Todays Haier expands to a cross of white appliances , black appliances ,beige appliances ,etc, various small appliances and pharmaceutical , biotechnology , financial services , multisecondly areas of the company .However, from the aspect o

5、f Haiers present situation, the pace of development is not walked smoothly as expected. In many areas, it has been met with a bottleneck. For example, the way of opening the foreign market is very tough as the result of the difficulty for foreign people to build the recognition and loyalty on Haier

6、brand as well as the technology which doesnt have advantage. Therefore the overseas sales are not satisfied. What can such a big Haier do so that it can be better to walk?2. The external environment analysis2.1 General macroeconomic environment The macroeconomic environment is analyzed based on the

7、“PEST”1) Policy factors:Domestic: For the development of Haier, the national policies are supported in many aspects. Such as the research of products, it enjoys the preferential benefit on tax rate and export products tax reimbursement like those series of supportive policies. But there are many fla

8、ws in the legal aspect. These flaws are mainly in two aspects: for one thing, under the socialist market economy, the Chinese related laws and regulations about the economy are imperfect and many loopholes are existed. So the market is abnormal and at same time has many irregular aspects which have

9、effect on the steady development of Haier. For another, regarding the patent protection, although there is revenant legislation, the effect that carried out is poorly implemented. So many products have been pirated and reproduced, which are the current popular saying “the village in a mountainous ar

10、eas version”. To Haier, this means a number of great loss. Abroad: in contrast with the domestic situation, although the competition about the market system and law is relatively perfect, there is high tax rate as the barrier to entry for the foreign companies like Haier. Even with the intention of

11、protecting the local business, the local countries often take the measures like “anti-pumping”. And it results in the difficulty for Haier to walk the international road.2) Economic factors: As the economy is developed rapidly, the market structure and institutions are constantly changing. Multinati

12、onal companies, joint ventures, strategic alliances and so on. So we can see that the global economy is becoming closer and the global economy shows a integration trends. So it requires Haier must make the development strategies and measures to adapt to the economic changes in this constantly evolvi

13、ng and changing economic environment. Only in this way can it walk better.3) Social and cultural factors: to the whole society, it is constantly developed. Apart form that peoples thinking, living levels and cultural standards are also changing all the time. Thus peoples needs and requirements to th

14、e products are developed unceasingly. As for the aspect of culture, due to the differences in races, regions, religious and countries, there are many kinds of culture. This means than Haier cannot stand still and it has to constantly to update and innovation so as to keep up with the pace of the Tim

15、es, rather than to be eliminated. Furthermore, faced with different objects, it should treat them differently. For doing market research analysis, it can better cater to the different the different kinds of culture, which is critical for Haier to walk the path of internationalization.4) Technical fa

16、ctors: Especially after the advent of the computer, the technology is changing very fast. This fast speed of changing will be a great challenge to the companies. Firstly, to the enterprise itself, it is the magic weapon for enterprise to grasp the valuable clues in this Information Age. The global 5

17、00 strong enterprise nearly are using the specialized system software like “with the friend”, SAP, which carry on the management and control with the help of electronic technology from purchasing the material to arriving at the sale, as well as each department. Secondly, to the companys products, it

18、 needs continuous developments, reducing costs, improving the quality of the product. Whats more important is to carry on research to create new product which will be contributed to competing with other competitors. Speaking of Haier, its competitors are not a small group, like TCL, especially the J

19、apanese brands which have the leading position in the technical aspect. So those who want to have a voice in the marketplace, technology is the key factor. Exactly for Haier, this aspect is very weak. So it is essential for Haier to have a faraway walk.2.2 Industry EnvironmentEnvironment for industr

20、y is analyzed based on Porter “Five Forces Model”. Two aspects will be talked. 1) The intensity of the competition with the same industry competitors: Todays Haier has been involved in many domains, like living room household appliances, IT products, Mobile phones. These areas are belonged to the in

21、dustry supported by high technology. As for the household appliances: domestic brand TCL, foreign brands like Sharp, Glanz and so on. We can clearly see that it faces many competitors that many brands are the resident in the forefront of the global top 500 enterprise. So the competition is very inte

22、nse in such a limited share of the market. Compared with these competitors, Haiers technology as well as the brand effect falls behind at a long distance.2) The bargaining power of buyers: Very different from the past, a new sales modelsupermarket is emerged after the retail had a large-scale integr

23、ation. Our countrys typical representatives are “Meidi”, “Suning”. Because of their strong sales network and marketing competence, they occupy the profit belonged to the enterprise in the market. Haier makes no exception in this extremely intense competitive environment. The space of profit availabl

24、e to Haier has already small, while it is worse that the profit is reduced at the sale part. Under the nowadays environment, many areas Haier involved in are in the mature period. How to enhance its competitive advantage and find a better marketing method to avoid this part of profit reduction in su

25、ch a fierce environment, which is critical for Haier to thing about.2.3 Management environment and competitive advantage1) Brand Establishment and Brand Loyalty: In this aspect, Haier owns a advantage. Since Haier was founded, it has been actively undertaken the society responsibility and the public

26、 welfare works to repay the society with true feelings under Zhang Huimings concept -“sincere forever”. In public welfare aspect: it has constructed 129 the primary hopr schools. Whats more, it produced 212 volume children science and technology education cartoon “Haier Brother”, which has been root

27、ed in the people heart. People trust Haier is not just its brand, besides its quality is really good. Apart from that, the most important is that it supplies a timely and thoughtful service after selling. This chain measures enable consumers to trust the brand and have a high degree of product loyal

28、ty.2) Expense Segmentation: As for the consumers demands, it makes the product segmentation according to many aspects rather than a generally spoken about the needs. Just like region, sex, religious brief and so on. For example, Haier invented a kind of space-saving refrigerator to cater to the Amer

29、ican university students. Another example is refrigerator with a lock. These differences are the refined diversion of products needs which make Haier still has a high competitive advantage.2.4 Summary based on”O(jiān)” and “T” analysisBased on the above analysis and the current Haier, we can see that Haie

30、r is facing opportunities and threats.Opportunities (O): 1) The good enterprise image that gradually established around the world and the brand effect will be contributed to the path of international in the future.2) Chinese market potential demand: Like “the household appliances go to the country”,

31、 Haier can vigorously tap the secondary market. So the market will be broader and the competition is weaker than the urban.3) Overseas market: with the trend of global economic integration, the trade relationships among countries are becoming closer and closer. We can develop more new markets in dev

32、eloped countries and developing countries like India. Thus the future development prospect of overseas will be very good.4) The product market investigation and expense subdivide are extremely appeal to the consumer needs, at the same time it enhances the competence in the market and benefit to the

33、further expansion of the market.Threats (T): 1) The high tax rate and standard of products in some countries are the barriers to entry and add to the costs of products.2) The technology is relatively backward, so it is difficult for Haier to compete with the same industry competitors.3) Rapid change

34、s of technology lead to the update of the product, which requires having high capacity of R&D and production.4) Lots of profit margins are occupied by some buyers having large bargaining power.3. The Internal environment analysis3.1 Enterprise ResourcesVisible Resources:1) A large scale and inst

35、itutions: 29 manufacturing bases and 8 integrated R & D centers and 19 overseas trading companies and employees are more than 6 million people worldwide.2) R & D institutions - Haier Academia Sinica, is committed to independent research and bearing the mission to supply the core technology t

36、o create the global brand for Haier. It is allied with United States, Japan, Germany and other countries and regions, owing 28 first-class technology company around the world and 12,000 square meters of research and development building and 16,000 square meters of the test base while equipped with i

37、nternational advanced level of soft, hardware facilities and the advantages of using the global scientific and technological resources of 48 at home and abroad with the intention of establishment and development entities. 3) Strong capital: In 2009, Haier Group achieved global turnover of 124.3 bill

38、ion yuan (182 billion U.S. dollars)while the brand was valued at 81.2 billion. Invisible Resources: 1) Goodwill: Goodwill is the formation of the accumulation of a very long time and the confidence of consumer in "Haier", so it owns a strong brand loyalty 2) Corporate Culture: Haier is the

39、 combination of the concept of innovating, a precursor to strategic innovation, the direction of the organization for the protection of innovation, technology and innovation as a means to market and innovation as the goal, while along with the concept that Haier from small to large, from big to stro

40、ng, from China to the world. Haier culture itself is continuous having innovation and development. Staffs active participation and the consensus is the most significant feature of the Haier culture. At present, Haier's goal is to create China's world famous brand to win the glory for the nat

41、ion. The goal realizes the perfect combination of development and value of the individual pursuit. Haier employees fully prove their individual value and pursuit during the process of realizing Haiers goal of global brand. 3) Patent: continuously developed new products, and applies to the natio

42、nal patent protection which ensures the creativity of enterprise product development.               4) Trademarks: Haier's new logo is composed of Chinese and English. Compared with the original logo, new logo lasted the past

43、20 years of brand culture, at the same time, the new design is more emphasis on the sense of the times. English flag each stroke more concise than before, a total of 9 program, "a" a reduction of one corner which means looking for targets that Haier does not look back; "r" a redu

44、ction of one branch of Haier which is a symbol of upward and forward unwavering commitment to. The core of thenew Enlish logo design is speed. The rate of organization is required to have a fast speed in the Information Age. English flag style is simple, dynamic, progressive. 3.2 Enterprise Capabili

45、ty  1) R & D capability: the establishment of a series of R & D institutions, such as Haier, Academia Sinica room, the Haier Group and Qingdao Municipal Science and Technology jointly established the "Qingdao Key Lab of Network Appliance, etc., and the employment of a lot of v

46、arious engineering-related professional personnel, greatly enhancing the corporate R & D capability to develop new products in many areas.2) Organization and management capacity: In this organization, the huge success is inseparable from the leadership. Such as the CEO - Zhang, his strategy of c

47、ontinuous adaptation to change: stages of brand strategy - "diversification strategy phase - stage international strategy - global brand strategy stage; as well as" on the matter, Albert, Nissin Hidaka, "the OEC management model, to each person market-oriented" market chain "

48、;management, to" human single one "model of development, the formation of autonomous body, which is as a fulcrum to invent for the consumers under the innovated business model of networks combining actual situation zero inventory supply-demand. Because of these strategies, management, sale

49、s model of innovation which contributes to making the" Haier "continue to move forward and to develop. 3.3 Value Chain Analysis Porter's "generic value chain": purchase logistics - Production Management - Shipping Logistics - Marketing - Services. In this value chain, "H

50、aier" is a highlight of the service areas. Many consumers are very satisfied with Haiers timely and thoughtful the service after selling. So consumers have full confidence in the company's products. But in fact in this value chain, it obtained a small part of the profit. Many parts are &quo

51、t;for others to do the wedding dress". This problem is mainly concentrated in the production. Although since 1998, Haier established the specialized institution to make efforts in developing its own core technology. Because the shortage of research time, though it achieved some success, it is e

52、nough to support many key components and spare parts needs. As for the core technology, it is mostly depended on the supply of outsider, only a small part from self-restraint. So in this value chain, "Haier" did not fully grasp the initiative. It is still dependent and passive. Thus, it oc

53、cupies only a small part of the profit. The most profitable part remains to be further strengthened. 3.4 Summary: "S", "W" Analysis Based on the above correlation analysis and the current status of Haier, as for Haier itself, both internal strengthens and weakness are existe

54、d.Strengths (S): 1) It owns strong brand effect and reputation and corporate culture2) The customer trust the brand, so they have high "brand loyalty" in this brand.3) Product-related diversification and unrelated diversification are significantly to reduce production costs.4) It owns its

55、unique methods and models which is fit to adapt to change and further development Weaknesses (W): 1) Although it owns a lot of available resources, it lacks the core competitiveness of enterprises.2) In the value chain, it doesnt grasp the core technology of product sufficiently.3) Product deve

56、lopment capability is relatively weak which is need to be further enhanced.4) It is so large that there are more layers of management, institutional duplication and large bureaucracy.4. Strategy Selection4.1 "Haier" Strategic Overview Brand Building Phase (1984-1991) Characteristics: Focus

57、ing onrefrigerator,Hair explored and gathered experience in corporate management to lay a soild foundation for its later foundation. A localization model of management was established.Diversification Development Phase (1991-1998)Characteristics: Diversify from one product to a variety of products (i

58、n 1984, we had refrigerators only, and in 1998, we had dozens of products), from white goods to brown goods through capital operation in a way of "activating shock fish". Tangible assets were activated using intangible assets and the business was expanded and strengthened at the minimum co

59、st and in the shortest time.Globalization Phase (1998-2005) Characteristics: Products are sold in great volume to major economic regions all over the world. With well established overseas distribution network and after-sales service network, Haier Brand is warmly received with sound notability, repu

60、tation and recognition.Global Brand Building Strategy Phase（2006）Characteristics: In order to adapt to the trend of integrated global economy, and to manage its worldwide brand, Haier group steps into the fourth developing strategic innovative phase from 2006: the strategy phase of global brand after the Brand Strategy Phase, Multi-Dimensional Strategy Phase and Internationalization Strategy Phase. The difference