Beruflich Dokumente
Kultur Dokumente
Sania Elgalaly
GUC MBA 2011
1- Current Situation
A. Current Performance 2001 to 2004
Organized into 6 Divisions:
Annual growth rate 78% Top 100 Most recognized Worldwide Brand Name 20 Year Old Company from China Brand value in 2004 is $ 7.4b 18 Design Centers 10 Industrial Parks 30 Overseas factories and manufacturing bases 58,800 Sales offices 96 Product Group Categories To include :
Refrigerators, Washing Machines, Air Conditioners, Cell phones, TV s, .
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2004 : Global Sales $12 Billion 4th in Global Sales revenue for White goods 21% Market Share China overall Appliances 34% Market Share China Major Home appliances 14% Market Share China small electronic appliances
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Haier strives to create innovative and affordable quality products, to deliver sincere, delightful and caring services, in order to satisfy different customers
Main goal to continuously increase the volume of products sold in the United States and to modify the companys products to meet American demand.
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Expanded the amount of units in order to achieve the 10% market share in U.S. refrigerator sales in 2005
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Strategies
CORPORATE DIRECTIONAL STRATEGY: Global growth strategy through horizontal growth and concentric (related) diversification Three Stage Growth Plan Brand Name Strategy 7 years built strong brand name in Refrigerator products through Total Quality control System Haier product became known for quality and innovation
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Going Multinational Strategy First move into Southeast Asia Second expand into United States in 1990 s European entrance in 2001 Japan expansion in 2002 2005 Haier has 62 distributors and 30,000 retail outlets worldwide Eventual Goal To be listed among Fortune 500 Successful Companies
Strategies
BUSINESS
STRATEGY:
Policies
Expand Brand Recognition Offer Niche products while expanding diverse product line Maintain strict cost control to keep product prices competitive Continue quick development programs and fast production updates Maintain strong distribution network and supply chain relationships
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Policies
After sale service is very essential to gain customer trust ( A & E Factory Service). Cost reduction is essential to gain competitive advantage. Manage the costs of manufacturing many different product models by periodically changed the modules of components Fast in developing new products
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2. Corporate Governance
A. Board of Directors
Name Zhang Ruimin Yang Mianmian Chai Yongsen Cui Shaohua Song Chunguang Liang Haishan Cao Chunhua Title Chairman and Chief Executive Officer President and Director Executive Vice President and Executive Director Vice President and Executive Director Vice President, Sales Director of Pegasus Qingdao, Deputy General Manager of Pegasus Qingdao and Executive Director Vice President and Executive Director Vice President, General Manager of Washing Machine Division and Executive Director Age 61 65 44 49 43 40 38
Economic
Lower production costs in China (O) United States market is the largest in the world (O) Growing Economy, U.S. simulated peoples consumption of durable goods including home appliances and consumer electronics. (O)
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Political-Legal
High cost of competitors duties by manufacturing overseas and selling in the U.S. (T) New regulations on the usage of harmful materials in production in China. (T).
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Entrants: Low
Stakeholders: Medium
Buyers: High
Rivalry High
Supplier: Low
substitutes: High
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EXTERNAL ENVIROMENT
EFAS
Key External Factors Weight Rating Weighted Score
0.54 0.80 0.02 0.06 0.09
Opportunities
Growing Economy in US Technological innovation in digital technology Lower-income young people and college student are attracted by low prices. Middle-aged and older people having high brand loyalty but high price sensitive Power of other stakeholders 0.18 0.20 0.03 0.06 0.09 3 4 1 1 1
Threats
Competition in U.S. market Lower response rate for stocking certain products and overstocking Increased cost of import duties High initial investment to Manu . products with more features than competitors TOTAL 0.2 0.07 0.07 O.1 1.00 5 4 3 4 1 o.28 0.21 o.4 3.69
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Internal Environment
1. Corporate Structure
Started out in 1984 as a government owned enterprise. Haier focused on organizational restructuring and management decentralizing with application of advanced information and network systems in order to fulfillment, market chain performance, logistics, capital operation, aftersales service, product inventory and operational cost reduction. (S) In 2004 was organized into Haier China, Europe, America, Middle East, Spain and New Zealand Divisions. In 1999 established a Design Center in Boston, a marketing center in New York, and a Manufacturing facility in S.C.
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Internal Environment
2. Corporate Culture Haier had a strongly motivated technician team, which was able to increase the companys product competitiveness by applying more features and style designs on its existing products. (S) Reputation at home (China) for quality, innovation, and customer service. (S) The main goal of the company was to continuously increase the volume of products sold in the U.S & modify products to meet U.S. demands
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Corporate Resources
1. Marketing
Haiers strengths were its relatively low prices and the unique designs and appearance of its electronics products. (S) Low brand loyalty in us market 35% (s) Introduced its Two Brothers logo into the U.S. market to boost its brand image. (W)
Promoted mostly by outdoor advertisement, airports, magazines, heavily in trade publications, and on the internet. Outdated website. (S) Little TV advertising, company sponsored sports teams and low brand awareness. (W)
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2. Finance 85% of company orders came from top 10 Chain stores in U.S. and Europe (S) Average annual growth rate of 78% from 1984-2001. (S) Ranked 4th in major appliance sales worldwide at the end of 2004. (S) 3. R&D Sluggish new technology development (W) Needs to develop technology for smart appliances (W) Haiers consumer electronics products has no competitive advantages either in technology advances or in product quality, except for their relatively lower prices. (W)
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4. Operations Reached a strategic cooperation agreement with COSCO in 2004, to help explore business opportunities worldwide. (S) Strong distribution network and good relations with both chain and individual stores. (S) Lack of U.S. distribution centers and limited exhibition space of standard products compared to major competitors. (W) Labor costs in China were much lower than in America. (S) Available land to expand in U.S (S)
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IFAS Table Internal Factors Weight Strengths Promotion by outdoor advertisement, airports, magazines, trade publications 0.1 and internet. 85% of company orders came from top 10 Chain stores in U.S. 0.1 and Europe Average annual growth rate of 0.05 78% from 1984-2001 Ranked 4th in major appliance 0.1 sales worldwide 2004 Agreement with COSCO in 2004 0.1 Strong Distribution Network and good relations with 0.1 chain and individual stores Weaknesses Two Brothers Logo TV Advertising Sluggish new technology development Needs to develop "Smart appliance" technology Lack of U.S. Distrubution centers Total
Comments
3 3 2 3
0.3 0.15 0.2 to help the company explore business opportunities 0.3 worldwide
0.2
1 1 2 1 1 23
0.05 practically unknown or unheard of in the U.S. 0.1 plans to launch more aggressive TV Campaigns could weaken its competitiveness when facing even 0.2 more serious competition in the future 0.1 address the "smart kitchen" concept development could enable the company to capture and respond to 0.1 trends in local markets and increase competitiveness 2.1
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2. Weaknesses TV Advertising Sluggish new technology development Need to develop smart appliance technology 3. Opportunities Introduction of products to U.S. market at lower cost International Partnerships 4. Threats Competition in U.S. market Lower response rate for stocking certain products and overstocking High initial investment to manufacturer products with more features than competitors
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TWOS
SW
Strengths S1: Promotions by outside advertisements . S2: 85% of orders came from top 10 chain stores in U.S. and Europe S3: Ranked 4th in major appliance sales in 2004 S4: Agreement with Cosco in 2004 S5: Strong distribution network .
Weaknesses W1: Poor TV Advertising W2: Sluggish new technology development W3: Need to develop smart appliance technology
OT
Opportunities: O1: Growing economy in the U.S. O2:Technological innovation O3:Young people and low prices. Threats T1: Competition in U.S. market T2: Lower response rate for stocking certain products and overstocking T3: High initial investment to manufacturer products with more features than competitors
S6: Strong innovative design team S6,O2 Develop new features products. O1,S2,S3 Market penetration to increase market share. O1,W1Need more advertising campaigns to improve the brand image. W2,W3,O2 more investment in R & D product and basic. W1,T1 Need more advertising campaigns to improve the brand image. W2,T1 more investment in R & D product and basic
S1,S2,T1 Maintain the good relationship with the major retail chains. S3,S4,S5T2 Get better spaces floor in the super retail chains. S6,T3 Increase the entry barriers and improve competitiveness by adding more innovative products.
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SFAS
SFAS
Strategic Factors Weight 0.05 0.08 0.05 0.07 Rating 4 3 2 3 Weighted Score 0.2 0.24 0.1 0.21 X X S h t o r X
Duration I n t e r m e d i a t e L o n g
S1 Promotions by outdoor advertisements S2 85% of orders came from top 10 Chain stores in U.S. and Europe S3 Ranked 4th in major appliance sales worldwide in 2004 S4 Agreement with COSTCO in 2004
Helped explore business opportunities worldwide Plans to launch more aggressive TV Campaigns Could weaken its competiveness when facing more serious competition in the future Address the "Smart Kitchen" concept development Could enable the company to capture and respond to trends in local markets and increase competitiveness Focus on the worlds largest market to be a truly global company
0.1
0.1
0.1 0.1
2 1
0.2 0.1
X X
0.05
0.05
0.1
o.4
o.1
0.4
0.1 0.05
5 4
0.05 0.2
X X
Several competitors with a larger market share in U.S. including Whirlpool which had 33.4% of the Market Share in large appliances. Longer shipping time due to product manufactured overseas Advertising, higher local manpower rates, and higher R&D costs
T3 High initial investment to manu. products with more features than competitors
0.05
0.2
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A. Strategic Alternatives
1. Growth Strategy: Horizontal Growth Strategy. Target niche markets in the U.S. by developing a wider range of products and services to satisfy their needs. Pros: Enables the company to more quickly capture and respond to local trends and increase competitiveness. Cons: Aggressive competition
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A. Strategic Alternatives
2- Differentiation Strategy: Develop new features for the consumers of electronics and home appliances through differentiation and differentiation focus
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Recommended Strategy
Recommend alternative # 2 :the differentiation Strategy. Which will enable the company to quickly capture and respond to market trends. Improve the brand image by both attarctive features and high quality of the products. Increase the companys competitiveness.
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Recommended Strategy
This should be depending on : Good financial capabilities. Strong innovative designing system. Implementing cost control by using OEC. (Overall every control and Clear).
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Implementation
A. Success in US is done by gaining more brand recognition. B. R&D need to be improved as does increase distributions centers to more efficiently supply chain and individual retailers.
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Thank You
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