Haier in India: Building presence in a mass market beyond China Case Solution
1991 – DIVERSIFICATION STRATEGY
With the help of growth in the earlier stage due to the uncompromising nature of Mr. Zhang on the quality of the products, the company succeeded in achieving US$ 156 million in sales as well asit was named as one of the leading brand in China. With this growth, the company decided to diversify its products and introduce some more home appliances and the consumer electronics in the product line.
1998 – INTERNATIONALIZATION STRATEGY
The time came when the company focused on expanding to the international level with the help of growth in the sales of the company in major parts of the world.
2005 â€“ GLOBAL BRAND STRATEGY
The company expanded in India and ensured the global presence of the Haier in the presence of market leaders of the consumer goods such as LG, Samsung, Whirlpool and the other Indian local brands.
2012 â€“ NETWORKING STRATEGY
The company maintained its brand as inspired living with which it provided its offering all over the world.
Haier Indian strategy timeline
In trying to evaluate the strategies of company in expanding the business in India, the following times are recognized:
1999:In this year when the sales of refrigerator reached at a targeted plan of 290,000 units the company then launched a three in one aggressive plan of localization which includes producing locally, then carrying out local sales and lastly, the plan which resulted in wider acceptance of the Haierâ€™s product i.e. producing the products according to the local needs of the customers.
2004:When the company was first launched in India, it firstly outsourced the low-end goods from Indiaâ€™s local manufacturers and imported high-end goods from China. The reason behind this strategy is that the company was not in the place to implement the rapid localization due to the chances of failure.
2007:Haier, in order to implement its three in one plan of localization, acquired a manufacturing facility in Pune district of Maharashtra. This helped the company in cutting down time to deliver its product to Middle East.
2012:Haier communicated its brand as an â€œInspired Livingâ€ which conveys that it is a global player.
Advantages of Expansion in India
The landscape of India has so much potential of growth for the investors to get a huge return and to make its presence worldwide. The benefits that are available for Haier are discussed below.
Haier has targeted the higher income group of the company to sell its product in India and by looking at the demographic structure of India, it was observed that theÂ disposable income of people has increased which would significantly help the company in targeting. Moreover, there is an ease of access to the credit facilities for the company. There is a high demand of electrifying products in rural areas rather than in urban areas who only want the latest product. The increasing electrification in the rural areas can help the company gain huge sales for the future. Moreover,with the advancement of internet technology, the usability of internet to order the product is getting wider.
With the increasing potential in getting the return from their investment, the companies are attracted to invest in India even during the recession period and can still earn the profit from their investment. Moreover, the company has invested US$ 1 billion in the distribution production and the research and development.
There are numerous opportunities for the foreign investors in India due to the presence of the rural as well as the semi-urban areas which contribute to the total sales of about 35%. It is estimated that constant annual growth for the year 2010-2015 would be 25% which is the enticing and most promising opportunity for most investors………………
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