OPPapers.com

Haier Scm

Prepared by Lindsay Hunt April 29, 2005

Haier Group Company
MarketBuster Summary The Haier Group was formerly known as Qindao Refrigerator Plant. It climbed from the verge of bankruptcy in the early 1980s to establish itself as a world-renowned brand and is now the fourth largest maker of white goods (appliances that were traditionally covered with white enamel—dishwashers, dryers, washing machines, etc). Currently it is China’s largest appliance maker. Its products include refrigerators, freezers, air conditioners, dishwashers, microwaves, televisions, vacuums, cell phones, and computers.1 The Story There have been three key stages in Haier’s development as a company. 1. Developing a domestic quality reputation: After Haier was incorporated in 1984, it began to develop a reputation for its refrigerators. The company used a Total Quality Management system and rigorous standards to develop a strong brand name in China. The implementation of these new quality standards helped Haier to turn a profit only a year after facing the possibility of bankruptcy. 2. Diversification: Haier then began to diversify its business and expand its product offerings. It had already developed a brand name for its refrigerators in China and it looked for other products where it could transfer this brand name. Other appliances such as freezers, dishwashers, and microwaves were the first expansions because they were most closely associated with refrigerators. 3. Global Expansion: Haier realized that to continue to grow, it needed to expand globally. It sought out opportunities to transfer its brand name and quality reputation to both developed and developing countries. 2 MarketBusting Moves China’s eBusiness There were significant external barriers that Haier had to overcome as it developed an ebusiness strategy. China is a difficult environment for e-business because it lacks a technical infrastructure. In addition, consumers don’t readily accept the internet as an acceptable way to...