Haier group is one of the leading and most accomplished home alliances manufacturers in China. It has established its global reputation the over the years. The company was founded in 1984 as the Qingdao Refrigerator company. The group had an estimated global sale of $16 Million in year 2007. With its core business as manufacturers of white goods and the refrigerators as it’s most accomplished products. The company soon earned the trust of its consumers within and outside China. Other White goods include freezers, microwave ovens, dishwasher, cleaners, room air conditioners and washing machines. The group subsequently diversified its product range to include mobile telephones, television receivers, and personal computers. Further, it has extended to financial services and pharmaceuticals (Ghemawat and Hout, 2006, pp. 9--705).
Being one of the biggest companies in China, Haier entered the United States market. With a low but promising note to become one of the leaders in home appliances. Haier soon took its position among top seven world leading home appliances manufacturing companies. Also, include whirlpool and GE in the United States. Haier initially captured the market of domestic refrigerators, by producing compact refrigerators for students that could be kept in their dormitories. With the passage of time, Haier successfully captured over 50% of the compact refrigerators’ market in the United States. Presently, Haier is globally the 4th largest white goods manufacturer with an annual growth rate of 81.6% (Ghemawat and Hout, 2006, pp. 9--705).
The company owes its enormous success to Zhang Remin, present Chairman and CEO of Haier group. In 1984 Zhang was appointed head of a small and bankrupt refrigerator company in Qingdao. The decade of 1980s is marked with turmoil for the local manufacturers in China. Since, many global players had entered an open market of over one billion population. Zhang laid down his emphasis upon quality of production that is witnessed by his famous public smashing of 76 defective refrigerators with sledge hammer in front of the workers. The incidence that took place within one year of his take over, also hammered the idea of producing nothing but quality products, in the minds of all employees. The company spent next 7 years developing and improving upon the refrigerator. That has been tailored to the consumer’s needs and established its brand and reputation (Ghemawat and Hout, 2006, pp. 9--705).
Haier also introduced the concept of after sales service to its consumers, back in 1980 that hitherto fore was unknown to the Chinese consumers. By then the Chinese customer was accustomed to only one kind of a deal. This deal gets over when the product is exchanged with currency paid to the vendor. Haier always takes pride in offering quality to its consumers as it does not believe in attracting with lower price tags. Haier keeps the distinction of being approximately 10% expensive than its local counterparts in People’s Republic of China (Kondo and Hirai et al., 2001, pp. 153--165).
Haier, which basically was a white good production consortium has extended its manufacturing capability to produce mobile phones, televisions sets and even pharmaceuticals. The diversity has been achieved by acquiring, restructuring and revitalising small companies with looming business (Ghemawat and Hout, 2006, pp. 9--705).
However, the diverse range of commodities as produced by Haier is being viewed with concern by the critics. As they deem it detrimental to the conglomerate’s future interests. Moreover, the aspects of brand strengthening, price establishment, issues of logistic and production costs, and growing competitive environment for Haier in the United States continue to be the matters of concern. A more pragmatic approach leading to downsizing of less successful product ranges, cutting down the logistic costs. That is by improving the production capability and more customer friendly products that are fruitful for the company (Kondo and Hirai et al., 2001, pp. 153--165).
Work Cited
Kondo, Y., Hirai, K., Kawamoto, R. and Obata, F. 2001. A discussion on the resource circulation strategy of the refrigerator. Resources, conservation and recycling, 33 (3), pp. 153--165.
Ghemawat, P. and Hout, T. M. 2006. Haier's US Refrigerator Strategy 2005. Harvard Business School Case, pp. 9--705.
