Taking A Chinese Company Global Case Study Examples

Haier competitive position in china: Since the 1980s the competition in china has been high from Chinese competitors who have specialized in just one or two products. The entry of China into the World Trade Organization in 2001 added pressure on Haier as most of their competitors became domestic brands. This brought tough price wars especially in the refrigeration sector. Foreign market investing in china were growing at an alarming rate taking with them significant portion of the Chinese market share. Haier was still at an advantage competitively as it was much closer to the Chinese consumers and constantly adjusted accordingly with their taste. By 2004, Haier was the number one appliance company in China. It was dominant in the refrigeration and freezer market accounting for 38% of all white goods sales in China. The company was among the leading companies when it came to providing consumers with home appliances. This was especially true for new homeowners. This was an improvement from 2002 where its market share was 27%. It however failed to dominate in particular markets with products such as washing machines and air conditioners. This was mainly because these products did not meet the needs of the market that they were introduced into. It was the only company with leading shares across white goods sector.
The basis of International strategy used by Haier was; first penetrating the tough and developed markets. The tough and developed markets seemed as the hardest to be able to penetrate. This is mainly because such markets had a lot of competition as well as strict business regulation. Once they have established a strong market base in the developed markets, they go after the “easy markets.” The easy markets were markets had less competition and their regulations were less strict. They use this strategy for two main reasons. The first being this developed markets are also market for their largest global competitors and they believe if they prosper in that developed market, they can succeed in any market. The second reason is to challenge themselves to produce the highest quality products and meet the highest standard. As stated earlier the strong and developed markets had high levels of market regulation such as the quality of products introduced. Therefore, introduction of goods into the developed markets would mean that the company would produce quality goods. This is because the requirements of both the customers and retailers are tough and not easily achievable. This strategy worked in their favor as it made it easier for them to enter and succeed in other smaller markets as they had already established themselves in a tough market and had a ready-made reputation.
The challenges facing Haier in the future will mostly be challenges that affect almost all companies when venturing into new markets. The challenges they will face include moving beyond the niche in an already established market. This is technically hard especially when introducing a full line of products and electric appliances. It will be hard to persuade the market to purchase appliances and products on a large scale from a foreign and unfamiliar company. This is mainly because consumers tend to be loyal to their own home companies. When venturing into new markets, all companies must encounter competition. How to deal with your competitor determines if you are going to prosper and establish a strong company or fail before the company can even take off. Hiring and securing human resources is a major challenge. Hiring the right personnel means that the company’s management is next to excellent. The right personnel will also develop a good relationship with the customer and maintain a good public relations record that will keep the customer happy and therefore, increase in the sales. This human resources is also needed in company’s expansion program. This is important as they will need to nurture the talent needed to develop the next generation products. New entrants to the market are another challenge they might face in the future. New entrants pose a threat as they may come up with a new unique product that will increase product completion in the market.