Haier Group: A Chinese Company That Created A Global Brand Essay

Haier multitude (HG) is a wind Chinese international maker of large and small dodges, including refrigerators, freezers, conditioners, dishwashers and laundry harvest-homes to jail cell phones and televisions. HG is non alone cognise around the world for lineament and concept but as an early performer bring outside of the Chinese tradeplace it was able to implement a foodstuff schema to take a elan grocery place piece of land from large manufacturers on their give birth home-front.I.Haier Groups spherical Brand dodgeA.Haier Groups Expansion dodge It Was Time to Expand china united the World Trade Organization (WTO) in December 2001 and became part of the international appliance marketplace. HG had a choice to insist its current position as the leading manufacturer in China or to expand its operations into spherical markets. HG confront stiff competition from domesticated manufactures and multinational companies (MNCs) that were penetrating the Chinese marke t. Although HG maintained a market avail based upon its innovative and rapid market response to customer require, superior after-sales table service and efficient distribution centers, it would be only a matter of time beforehand MNCs acquired similar resources through third-parties and adapted to local anaesthetic market needs (Palepu pp. 7-9).1 HG could face overcapacity within the Chinese market i.e., too some manufactures and not copious market share and lose the luck to support its world(prenominal) e working classateness to inhibit market share overseas. If HG acquit had kept the status quo, it may never put one over another(prenominal) opportunity to wasting disease realises generated from its domestic sales to go head-to-head with large manufactures and develop its possess snitch.As early as 1997, HG had developed a formal world-wide expansion schema (Id. at 10). It fabricate products for MNCs overseas and entered into joint ventures (JVs) to explore f oreign markets (Id.). HG had acquired access to the latest engineering from the U.S. and Europe and was able to leverage its familiarity to manufacturer a better product at a spicyer profit per unit. Itscompetitive advantage was two-fold (1) product specialism and (2) response speed (Id. at 15). HG was successful in China, because it focused on organizing itself to understand what customers want and to satisfy those needs as quickly as possible. It to a fault was able to participate brand spick-and-span products or features that could be added to existing products to butt on customers needs.While most Chinese manufacturers marketed and interchange products under an original equipment manufacturer (OEM) leaf node brand, HG was willing to endure the primitively costs of developing its own brand (Id. at 10). HG adopted an expansion strategy to first build its market share in developed markets and because go after acclivitous markets. It opined that many Chinese manufacturers would first export to conspiracy East Asia where they had no strong overleap competitors HG would instead focus on the difficult and larger markets of the U.S. and Europe (Id. at 11). If HG could succeed in these markets it would excite raised its competitive edge and could advantageously thrive in emerging markets (Id.). This logic makes sense since, because if the HG brand was astray accepted in the U.S. and Europe, it would become astray accepted as a high quality product in emerging markets.With the support and encouragement of the Chinese government, HG sought the benefits of existence an early-mover and manufactured corner products in developed markets neglected by large manufacturers. HG focused on compact refrigerators for college students and offices and wine coolers (Id. at 11-12). When others began to imitate, HG was equipped to add bran-new features, such as mini-fridges that doubled as a computer desk (Id. at 12). HG did not now compete with the large manufa ctures in the U.S. and European markets because it had to bridge the trust disturbance and shed the low-quality reputation attached to Chinese manufactured goods. After establishing the quality of the street corner products, HG was able to gain the trouble of major retail chains and introduce standard products to the U.S.HG learned from the mistakes make by MNCs in China and entered into new markets by hiring the right people with companionship of local markets. HG developed JVs on five different continents, thus gap the risk, and its strategy allowing HG to leverage familiarity from its local partners. It gained competitive advantage by product differentiation and response speed. HGs large competitors were inflexible, subdued base and did not focus on the minuscule details of the customers needs. Customers felt as if HGs products were local brands rather than trade Chinese brands.Haier Group Faced Risks with Global ExpansionHGs stopping point to globalize in developed ma rkets face risks if MNCs quickly learned from their mistakes in the Chinese market and started eating into HGs domestic market share, depriving HG of the wage necessary to expand globally. If MNCs did not underrating HG, they could start out tracked movement and competed directly against the niches that HG sought to fulfill before introducing its standard products to major retailers. HGs critical vulnerability was the Chinese reputation of manufacturing cheap quality goods, its harsh labor conditions and environmental practices. HG faced the risks that U.S. and European markets would reject out-of-hand the HG brand in spite of its innovation and high quality. China was rose-colored to have HG lead the way in global expansion another early-moving Chinese manufacturer with lower quality standards and poor market strategy could have resulted in failure and further setbacks for the Chinese governments going out policy.II.ConclusionIf HG chose to remain in its domestic market or sn itch its products under an OEM clientbrand, it may have never been afforded an opportunity to develop its own global brand. MNCs invested millions into factories and distribution in China in hopes to prevent HG from development its profits in the domestic market to support its advancement overseas (Id. at 15). HGs market strategy capitalized on MNCs failures in China and its intimacy of western technology. It was too risky for HG not to make its move into the global community. HG exploited MNCs slow response to customer needs, inattention to baby details and inflexibility to become a leading player in the global market. The risk of not expanding globally when faced with MNC competition in China outweighed the risks of being complacent with its domestic market share.