Myths and Realities of Innovative China the Case of Haier Company – Internationalization Strategies

Myths and Realities of Innovative China the Case of Haier Company - Internationalization StrategiesIn 1991, Haier started to diversify. Haier also started to produce air-conditioners and freezers besides refrigerators. Haier took three years to establish repute in these two industries. In 1991, the sales and profits of Haier were RMB 724 million and RMB 31.2 million respectively. Whereas in 1994, Haier’s sales and profits had grown to RMB 2.56 billion and to RMB 200 million respectively. Subsequently, Haier developed washing machines, microwave ovens and water heaters. In 1997, Haier entered into the production of black household appliances. Table 1 summarizes the processes of Haier’s diversification over the time. With the idea of “customers as the foundation of growth”, Haier furnishes a one-stop star aid to its clients. In a joint review directed by the China Consumer Association and the China Enterprise Research Centre of Tsinghua University on China’s domesticated sturdy items for 2003 and 2004, eight of Haier’s feature classifications were ranked No. 1 for client fulfillment and for the most part fulfillment. Notwithstanding excellent home apparatuses, Haier is additionally centered on offering greatest-of-breed aid answers to its clients. Haier’s aid framework runs all through the preparation method from item plan, preparation, assembling, to pre-deal, under deals and following deals fix. Inasmuch as 2002, Haier has efficaciously secured an arrangement of over 5,000 household pro aid suppliers to transport auspicious redid utility.
Haier is the first Chinese firm to buy a fridge production line in the European Household apparatus segment. It made the first European acquisition in 2001 by getting refrigerator manufacturing plant in Italy. The reason for this acquisition is to enhance range and production capacity. Haier has several abroad modern points of production and sales in the United States, Pakistan and Jordan. In particular, it has 30 abroad plants and 58,800 deals executors worldwide. It sends out its items to more than 130 nations in Europe, Asia, Middle East and North America. The predominant production plant of Haier was in Yugoslavia under a joint venture with a neighborhood community. Haier is transforming coolers, freezers, clothes washers, dishwashers, microwave broilers and modest machines for the European business. In Asia, it has engaged in the business sectors of Indonesia, Philippine, Malaysia, United Arab Emirates, Algeria, Bangladesh and Iran through joint ventures. Table 2 below shows the foreign operations of Haier internationally. Haier has devised a few guidelines for its globalization policy. Under this guideline, one-third of its features are both handled and sold in its home nation and the other on one-third of the items are handled in home nation but sold abroad, and rest of the items are both handled and sold abroad. In worldwide extension procedure, Haier’s method is to move from challenge to simplicity i.e. dropping in additional propelled business sectors first. It is vital to drop in the more progressed businesses first with a specific end goal, which is to increase more brand recognition.
In the European Union, Haier entered in the German business sector first. Germany is recognized as a troublesome business sector to enter in. Scrutinize systems possess a foremost place in the development and innovative advancements of any immovable. In this respect Haier has engaged in accommodating scrutinize systems with acclaimed unfamiliar firms. The proposed helpful systems furnish Haier qualified information about global slants in innovation improvement. Haier’s worldwide mechanics cooperation compass Tokyo, Los Angeles, Montreal, Lyons, Seoul, Sydney and Amsterdam. The accommodating associates of Haier incorporate Toshiba, Mitsubishi, ESS, Philips, Metz and Lucent.

Table 1. The Stages of Haier’s Diversification

Stage Period DiversificationArea Procedure
1 1984-Dec 1991 Refrigerators Imported refrigerator technology from Liebherr Company of Germany.
2 Dec. 1991- Jul.1995 FreezersAir-conditioners Acquired Qingdao Freezer General Plant and Qingdao Air-conditioner Plant.
3 July.1995-Aug.1995 Washing machines Microwave ovens Water Heaters Acquired Red Star Electric Appliance Factory and established a joint venture with Laiyang of Shandong Household Appliance General Plant.
4 Sept. 1997 Black household Appliances Established a joint venture with West Lake of Hangzhou Electric Group.
5 1998 Knowledge sectors Formed technology cooperation with many external organizations

Table 2. Foreign Operations of Haier

North America Europe South Asia ASEAN Middle East Africa
USA Germany India Thailand Jordan Tunisia
Italy Pakistan Indonesia Nigeria
Holland Bangladesh Philippines Egypt
Denmark S ri Lanka Malaysia Algeria
Romania South Africa