Case Summary:

What kind of company is this?

                        Haier is a Chinese based company that manufactures white goods for home and office users. The company offers a wide range of goods as well as a number of product lines in white goods. Haier offers its customers’ refrigerators, air conditioners, washing machines, deep freezers, televisions, microwave ovens and many other small domestic appliances.

            The company offers many of the business and medical products, even like business class air conditioners, ULT freezers, bio safety cabinet for hospitals and many more products. The business class also enjoys the products of Haier Company.

History of the company so far:

                        In 1984, the company began as a township and village enterprise (TVE) in Qingdao, a port city in China’s Shandong province. The company was founded by Zhang Ruimin also the CEO of the Haier Group.

            At the time of the beginning of the Haier, there were 800 workers who were the owner of the company at the same time. The workers collectively owned the assets and profits of the company after paying all the taxes on the profits of the company.

            The reason behind the incorporation of the company was to manufacture high quality refrigerators for which the Chinese people were ready to pay a premium price, because the quality refrigerators were rare at the time of the incorporation of the company

The company had introduced its first global expansion plan strategy in 1997 and became number one manufacturing white goods in China in 2001. The company had just named as the lading refrigerator manufacturer worldwide by Euromonitor.

            Higher operated 240 subsidiaries and had established 61 trading companies. The group had expended successfully in Chinese and International market as well.

Features of the industry:

            The company relates to the industry of home appliances and consumer electronics. Home appliances consist of electronically or mechanical machines that are used to accomplish some of the household functions like cooking, cleaning, washing and many more.

The home appliance industry is growing so far because the products make the life easier and full of joy and also it has reduced the need of servants for homes. It also saves time of the consumer as the product serves quickly. The ease comes with a cost, the products are somehow expensive, but the range of products and prices provide the consumer to buy according to availability of resources with him.

            The industry exists for a century and growing since that time period because of the saving of time and efforts it give a consumer to buy the more the consumer can buy the products. The home appliances not only saves time and energy, but also the products are long lasting and the industry offers a good after sales services by providing warranties of the products.

            The products which the industry consist are kitchen used products, refrigerators, cleaning products like vacuum cleaner and many more which are necessary to reduce the human time and efficiency required to fulfill the house needs.

                        Consumer electronics are equipment that are used for daily day to day routines. The most of the products the consumer uses for the entertainment, communication and office productivities.

The consumer electronics industry has eased mean of communication, increased entertainment and increased office productivity through the means of the consumer electronic products. The industry has added efficiency in the world of business by giving multiple products like computers and many more.

            The products the industry consists are personal computers, laptops, camera, MP3 players, televisions, calculators, telephones, mobile phones and many more which satisfy the needs of the consumer and also adds efficiency to consumers.

            The industry has too many international as well as Chinese companies, but the leaders of the international market of major consumer appliance manufacturers are, Whirlpool a US based company that holds 10.5% world market share in 2010. On second position it is Electrolux AB with 7.3% market share and Haier at number three with 6.9% market share in 2010 (Exhibit 8a of the case).

The decisions the company has taken so far:

            The company introduced its first formal expansion strategy, beginning in 1997, when the CEO announced his “three third” goal of having the Haier revenues come equally from good produced and sold in China, food produced in China and sold overseas, and goods produced and sold overseas. The strategy announced that the company can earn an equal amount of revenue whether manufacturing in China or Overseas and sales overseas or in China……………………..

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