BUSN11082 – INFLUENCING ORGANISATIONAL STRATEGY

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BUSN11082 – INFLUENCING ORGANISATIONAL STRATEGY

Question 1: What are the main features of Haier’s Internationalisation strategy since the 1990s

Haier Group Corporation is a China-based multinational home appliances company along with a consumer electronics-based company and this company has its headquarters in Qingdao (Haier.com, 2022). This question of the assignment is associated with an analysis of the main features that have been included in Haier’s International strategy since the 1990s. Every multinational company has its internationalization strategy which helps every organization in case of expanding respect to the global market. It has been observed that Hairs haphazardly started internationalization, In between 1992 and 1997, it has been observed that the company entered several overseas markets. In the south-eastern region of Asia specifically in ” Indonesia, the Philippines, and Malaysia ” Haier was expanding with the help of joint venturing with the local companies and the main objective of the company was to increase the sales of refrigerators along with air conditioners with the help of Joint venturing (Case Study, p.651).

RESEARCH ESSAY

However, Haier has used a different strategy in the case of expanding to the US, Haier was initially supplying compact refrigerators in the mode of imported brands and the sale was under a retail brand present in the country which is known as Walmart. Compact refrigerators which were produced by the company were followed by Wine coolers, and sales of this product were established in the country in large chains (Case Study, p.651). In 1997 this company established business in Germany, the Netherlands as well as Italy. This company has started an export strategy for selling this product in these countries under the brand name Haier (Case Study, p.651). Haier has received significant or high sales in Germany and the brand Liebherr was the sales agent for this company in Germany.

The leaders associated with the organization have provided just that the company is not exporting to every country to make a high exporting profit since the cost of the raw materials is less in China. However, the main goal of the company is based on global expansion and this is the reason the company expands to other countries, especially by the method of joint venturing. Hairs involve a unique international strategy that includes a “locally designed, locally made, locally sold” approach. However, this approach includes certain steps which are followed by the company for expansion. The first step associated with this kind of approach includes Seeding. In this procedure, the product is established in the international market with the collaboration of other companies and sales agents. The next step is associated with rooting, and this procedure includes building market share along with the establishment of a plant concerning manufacturing in the global market (Case Study, p.651). The last step associated with this model includes harvesting and this step includes the establishment of a research and development team in the country along with conducting a wide range of activities which further help in acquiring the foreign market.

Women Empowerment

Question 2: How does Haier’s internationalization strategy differ from the pattern of international development typical of Western enterprises

In the previous question, the international strategy of the Chinese home appliance company is mentioned. The name of the company is Haier, and based on the previous part, it can be concluded that the company has achieved global expansion in several countries the world with the help of Joint venturing. This question of the assignment is associated with creating a difference that is associated with Haier’s internationalization strategy with Western enterprises, and this difference creation is based on expansion policies adopted by European countries for increased selling of the product in the global market. It has been observed in the case of Western companies that these companies use economy-of-scale techniques for globalization. This Economy of scale technique is relevant in the case of producing a huge volume of standardized products which are to be sold in the international market for example which is followed in the case of Merlion as well as in the case of the Indesit of Italy.

However, it can be concluded that the organization is producing as well as carrying up plans that are relevant in case of a joint venture which is required for collaboration of operation with local companies and this joint venturing factor has helped the organization to expand the Asian countries as well as middle east countries. Western enterprises do not follow the procedure of branding themselves in foreign countries with the help of suitable implications. However, Haier is a company that uses global expansion in a careful procedure of branding itself in case of any foreign land (Case Study, p.652). This scenario has been observed in the case of the US, Haier has supplied a refrigerator along with a compact cooler to the US market with the collaboration of “Welbilt Appliances”, this brand was considered as the importer brand. After the successful implication of the product in the US market, the company has created the chance to expand the organization and increase the sales of wine coolers in the US market. The company has generated 19.8 million US dollars in recent times while operating in the US, and thus it can be concluded expansion of Haier’s is successful in the US (Statista.com, 2022). Unlike the Western countries, it can be concluded that Haier uses the strategy of conglomerates in the case of international strategy (Researchgate.net, 2022).

Preparation Stage of Successful Change

Question 3:

In the previous question, it has been mentioned regarding the analysis of Haier’s international strategy with comparison against the western enterprises and this part of this assignment is associated with an analysis of the successfulness of Haier’s international strategy. This is a home appliances China-based multinational company, and this company has a success factor regarding joint venturing ability with all the companies in their domestic country where the company wants to expand. Referring to the joint venture capability of this company it has been observed that the company can expand in Asian countries such as India and Pakistan. In India, this company has joint ventures with “Fedder Lloyd Corporation” and in Pakistan, this company has joint ventures with Ruba Group. This joint venture is considered the success of the organization since this joint venture helps the company in global expansion as well as generates more revenue. As mentioned in the previous part, it can be observed that the company has followed the procedure of importing in the US and it has been observed that approximately 19 million US dollars in revenue are generated by the company.

BUSN11082 – INFLUENCING ORGANISATIONAL STRATEGY

Figure 1: Revenue generation by Haier

(Source: Statista.com, 2022)

The above graph explains the revenue generated by the Haier company and based on the graph it can be concluded that the revenue generated by the company in 2021 is 72 million Yuan. The value highlights the success rate of the organization and this is because of expanding the business to other parts of the world. It can be observed from the graph the maximum sales of the organization are of refrigerators and other cooling equipment.

BUSN11082 – INFLUENCING ORGANISATIONAL STRATEGY

Figure 2: Revenue generation and employees table of Haier

(Source: Studypool.com, 2022)

The above table explains the improvement of the company from 2010 to 2017, and it has been observed that in this period, the company has successfully expanded in different countries with the help of joint ventures and it is due to expansion policies the company has generated 20,709 million dollars and the employees used by the company in 2017 is 15,240. Haier’s success rate has been evaluated under the leadership of Zhang Ruimin, and at the beginning of 2015, this company became a major home appliances supplier worldwide. Due to the expansion strategy, this company was 9% ahead of LG, Electrolux, and Samsung, along with Whirlpool (Case study, p.653). It has been observed that Haier’s sales were extremely good in the home market, and this company was on the leaderboard in the Chinese market. About 36% of the Chinese market is occupied by this brand and 46% of the washing machine share is occupied by the Chinese market. However, outside China, the successful expansion is less for the company. In the case of the US market, this company has successfully generated a huge amount of revenue however this company has failed to expand properly in the European market (Case study, p.653).

HI6006 Competitive Strategy Individual

Question 4:

4.1 By other Chinese enterprises

In the previous part, all other successes of the company mentioned along with globalization or internationalization strategies used by the Haier company are mentioned with compared to western enterprises that are the companies which are in the European region, and this part of the report is associated with a comparison of Haier’s principal and management strategies with other Chinese companies. The main principle of Haier is to expand to other parts of the world and to achieve this kind of principle the company has expanded to all parts of the world with the method of joint venturing. Joint venturing is used by this company in collaborating with all other domestic organizations which helps in the reduction of operational costs for the company as well as generating high revenue. Whereas most of the companies in the Chinese market are tentative in direct selling the product in other parts of the world. The most common strategy used by these companies is to sell products via an online e-commerce platform which is in all parts of the globe.

The major challenge which is faced by Chinese organizations due to online e-commerce selling is that the companies get huge amounts of competition since online platforms such as Alibaba promote all types of products from all the companies to huge amount of competition the companies are unable to generate huge amounts of revenue from the organizations. Leaders present in Haier have identified the problem of direct selling in E-commerce platforms to all parts of the world. This is the reason the company has proposed the method of a joint venture in case of expanding to other parts of the world. The leader of this organization follows “transformational leadership” (langstone.edu, 2022). Leaders following this kind of leadership carry out innovation strategies for the organization with the help of employees and management present in the organization. All other Chinese organizations also have different kinds of techniques associated with management however, this management technique is different from Haier.

Performance management of the employees is relevant in the case of every organization since employees are the key pillars of every organization. In the case of the management approach, incentive measures are introduced by the company for the employees, and it has been observed after the introduction of the incentive structure, the performance of the employees has vaulted and the sales of the organization have readily increased. This kind of technique is not introduced in the Chinese market and this is the main type of comparison between the companies of China and Haier (Case Study, p.648). Another technique which is used by the organization is the company compares the performance of the employees every month and this helps the employees to perform more effectively in the organization. This also helps the employees with self-evaluation. However, other Chinese organizations do not use this kind of techniques of performance management technique, and this is the reason Haier has successfully expanded its business to several other parts of the world.     

EXPLAIN WHY BURBERRY PLC. INCLUDES THIS INFORMATION WITHIN ITS ANNUAL REPORT

4.2 By Western enterprises

In the previous part, all kinds of information regarding the comparison of management and principles are mentioned between Haier and other Chinese companies and this part of the assignment is associated with information regarding the comparison of Haier with a Western enterprise. Western enterprise includes those companies that are in Europe. As it is mentioned earlier, the principle of the company Haier includes joint venturing in moving to several parts of the world. Joint ventures have specific benefits over costs for operations, and losses for any operations are handled collaboratively. However, the company associated with Western countries uses the principle for production is “Economy of scale”. In this procedure, large-scale products are produced by the company which are required to be sold in the international market. This type of principle used by the companies may affect the reputation of the company since the brand is itself involved in the case of expansion. The cost of the operation is also high and there’s a chance of loss in the company if the mass production is not selected by the people.

As mentioned in the previous part, incentive is the structure followed in Haier to motivate people; thus, there is a print of transactional leadership. In the case of this leadership style, two types of elements are proposed to the employees one is rewarded other one is a punishment which is partially appropriate for creating motivation among the employees so that the employees work properly in the organisation. However, organizations in western areas of the world use proper methods for motivating employees since they think motivation is the most significant factor for employees in working. Two types of feedback are given to the employees one is positive, and another one is negative so that the employees present in the organisation can be self-motivated for improvement in the organisation.

Assignment 2b: Essay Outline Assignment

Question 5:

  • Steps to mitigate the problem of competitors

The major concern of the company is that this company receives tough competition from competitors, the main competitor of the company is Whirlpool. Thus, it is highly recommended that the company generate several steps of expansion and competitive advantage to generate more revenue from Whirlpool (Euromonitor.com, 2022). The company must reduce the pricing of all the products generated by the company since the company has acquired the market with suitable lower prices of the product in the US as well as in Japan.

  • Solve the problems of conflict between the partners in joint venturing

In the previous part, it has been already explained that the company follows expansion strategies in other parts of the world with the help of joint ventures. This company has expanded in India with the venture of Lloyd and this company has expanded in Pakistan, collaborating with Ruba. Thus, this company faces a huge number of problems in collaborating with other companies in the form of joint ventures. This problem occurs due to mistrust among the collaborators that this company is recommended to collaborate with verified companies who have a good track record of collaborating in case of a joint venture.

  • Measures for performing outside China

As mentioned in the case study, it has been observed that the company has suitable strategies that have a huge success rate in China. Approximately 36% of the market share for the company is held by the Chinese market. It has been observed that the sales of the company are also high in countries such as the US. However, in the case of European countries such as Germany and Italy, the sales of the company are low. Thus, it is recommended for the company to increase sales through suitable expansion and production techniques used by the company.

  • Development of the IOF ecosystem

In the recent world, healthy diets are necessary for every individual, and this is a major problem which has been faced by every person present in the world. In case of deep frying of any ingredients, the smoke is not able to move out of the kitchen which is harmful to every individual (Haier.com, 2022). To help solve these kinds of problems, the company has developed the system Smart Kitchen, and it is recommended that the company promote the Smart Kitchen techniques or IOF ecosystem techniques.

  • Strategy to return to business after COVID-19

Due to the COVID-19 pandemic, every organization in the world has lost its way of expanding and initiating business on the global platform. Due to COVID-19, the company mentioned in this part has faced several kinds of problems. Therefore, it is recommended that the organization set up a new business strategy so that the problem can be solved while operating in pandemic situations (Haier.com, 2022).

Assignment Week #12 – Jazz

Reference list

Euromonitor.com, 2022, Haier Encounters New Challenges, Available at: https://www.euromonitor.com/article/haier-encounters-new-challenges [Accessed on: 02/08/2022]

Haier.com, 2022, About Company, Available at: https://www.haier.com/ [Accessed on: 02/08/2022]

Haier.com, 2022, Haier Smart Home Iof Ecosystem Targets Three Major Issues, Available at: https://www.haier.com/global/haier-ecosystem/list/20201021_149589.shtml [Accessed on: 02/08/2022]

Haier.com, 2022, How Haier Mobilises Without Organisations In The Fight Against Covid-19 And In Returning To Business, Available at: https://www.haier.com/global/csr/social-assistance/20200921_148581.shtml [Accessed on: 02/08/2022]

Langstone.edu, 2022, Transformational Leadership, Available at: https://www.langston.edu/sites/default/files/basic-content-files/TransformationalLeadership.pdf [Accessed on: 02/08/2022]

Masterclass.com, 2022, Maslow Model Of Needs, Available at: https://www.masterclass.com/articles/a-guide-to-the-5-levels-of-maslows-hierarchy-of-needs#:~:text=Maslow’s%20hierarchy%20of%20needs%20is,%2C%20and%20self%2Dactualization%20needs. [Accessed on: 02/08/2022]

Researchgate.net, 2022, Internationalization And Technological Catching Up Of Emerging Multinationals: A Case Study Of China’s Haier Group, Available at: https://www.researchgate.net/publication/4790388_Internationalization_and_Technological_Catching_Up_of_Emerging_Multinationals_A_Case_Study_of_China’s_Haier_Group [Accessed on: 02/08/2022]

Statista.com, 2022, Major Appliance Manufacturing Revenue In The U.S. 2010-2022, Available at: https://www.statista.com/forecasts/884971/major-appliance-manufacturing-revenue-in-the-us

Statista.com, 2022, Revenue Of Haier Smart Home Co., Ltd. From 2010 To 2021, by product,  Available at: https://www.statista.com/statistics/233396/revenue-of-qingdao-haier/#:~:text=Haier%20Smart%20Homes%20refrigerator%20segment,to%20over%2054%20billion%20yuan. [Accessed on: 02/08/2022]

Studypool.com, 2022, Nyitow Challenge Case Haier Internationalization Analysis, Available at: https://www.studypool.com/discuss/33199141/the-international-challenge-case-analysis [Accessed on: 02/08/2022]

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