Case Stu

dyCASE STUDY Case 1 Haier in India shewing presence in cud trade beyond China 1. Why did Haier draw in India? What did it plan to achieve in this new(a) securities perseverance? At First, Haier started as a small icebox factor iny in China. Zhang Ruimin put great violence on product quality, so he neer tolerated any faulty refrigerators. By creating products under the encourage of quality a contendeness, Haier became the worlds biggest appliance foodstuffer by retail volume. In 1990s, Haier marched into world-wide commercialises and utilize internationalization dodging.Haier polish off a great parkway to break the bias that made-in-China products are of low quality. As Haier achieved achiever in the US and Europe by creating high quality flaw image, it widened its scope more(prenominal) and more. At the m of 1980s, India was non a erect target market for Haier to approach because the Indian governance was acting very defensive to international companies. hitherto in 1991, as India experienced payment crisis, the solid ground had to liberalize and open up the market to foreign investments. As China encouraged companies to go oversea by subsidizing by policy banks loans, Haier decided to precede the Indian market.China chose Indian market as a target because India had the worlds second approximately populated economy and was experiencing rapid economic result. The produce rate was alike to the 1 seen when Haier first achieved success in china. also, Haier could expect several advantages from Indian market much(prenominal) as rising disposable income, an expanding middle class, and a relatively low entry roadblock in the white good market. Banerjee, Haier Indias president, find that as the participation was already gaining power as a major player in spheric market, assume strategy and direction would give Haier gigantic opportunities in the expanding market of India.Banerjee made specific targets for the order to garne r 20% of Indias white goods market in five years and to become one of the top three industries in s even out years. Also he wanted to build an integrated manufacturing facility. The undercoat of entry to Indian market was sort of attractive. Indias white goods market, where Haier wanted to penetrate and achieve in top rank, was a emergence piece of pie. From the satisfyings offered in the case, EXHIBIT 3, the home appliance sector was growing among 11% and 14% annually and Consumer Electronics sector was growing from 11% to even 30% in 2003.Economic growth brought increase of household income and middle-class. This is a positive bit for Haier because there would be more double-income and nuclear families which meat more demand for house appliances. As Haier was already a orbicular brand, it tried to expand its market more widely. As a result, India seemed to be satisfactory because its gross population was huge, and India was a developing state where more people would dem and appliance as time goes by. Haier regarded India as a chance to fix disposable income for electronics purchases.With prospicience of the high market demand, Haier had plans for new plants, new action lines, capacity expansions, and even Greenfield investments. 2. appraise Haiers entry strategy in India. What was and was non working? Why? Although many Chinese companies spot to first enter developing countries and then afterwards more certain countries, Haier approached in an opposite way. So at the time when Haier entered Indian market, the community already had experience in high-end markets in the US and Europe.Because US and Europe market is mature market and argument is more fierce, Haier would exact already cognise rough strategies to appeal customers. Although Haier had experience and sources to attract customers, the entry strategies utilize in India were non all successful. Their production expectation turned out to be too hasty. On the separate hand, im age setting strategy was kinda successful because their global branding strategy made Indian people believe Haier as a high quality brand, non many conditioned Haier as a Chinese brand.The toll strategy that Haier first adopted was a grant price strategy, which seemed to be appropriate when considering other giant brands such as LG or Samsung were adopting low pricing strategies. It could be a way to set the cost high than major brands if entering keep company thinks price would non be a competitive factor in the market. One entry strategy that Haier and other company werent successful at first was the anticipation of high market demand in 2004. As Indian market was a growing market, companies expect the demand would rise significantly.As a result, they increased the production capacity. However, they were over-reacting to the market trend. Market demand could not beget up the production amount, so the refrigerator industry should have been overstocked. As an entry strateg y, Haier adopted a global branding strategy in 2004. Before, Haier normally had an image as an export-based company, just now Zhang wanted to bring astir(predicate) a name brand in the waiter market so that they could create an image as a global brand. In fact, Haier wanted to bedim its Made in China image which implicates cut-rate and low-quality products.This branding exercise worked quite well, because people perceived the company as a Germany or the US brand. It seems that market positioning strategy adopted by Haier when entering the Indian market was quite tactical. Korean giants such as LG and Samsung took low pricing strategy, and Haier could have felt burdened to lower the price even lower than them. It is because if quality of Haiers appliances turns out to be similar to those companies, and the price is similar or high than them, not many customers would challenge to buy Haiers.Nonetheless, Haier was reassured because they already had experiences in Europe and the US market, and was quite well known as a global brand. As a result, instead of participating in a price war with other giant companies, Haier took premium price strategy in India. Haier quite an decided to emphasize their quality in the market, which seemed to be the strategy of fighting in a range war The premium price strategy could be seen as both a success factor and failure factor. Overall, Haier succeeded to implant an image of global and premium brand in the Indian market.The perception of customers nearly Haier was homogeneous to what the company wanted their customers to have about them. However, image does not always make the company become successful. Haier showed quite disappointing revenue growth until 2009, which demonstrates that after all the company might not have won in the value war. perhaps the premium price strategy was not an option but an unavoidable plan, considering that giant brands were located rigidly in the market already. 3. Discuss Haiers topic al anaesthetic anestheticisation principle exemplar in India and other markets. Were they diverse? If so, why?As the EXHIBIT 1 in the given material shows, Haier adopted different strategy models through timeline. In the early confront of the company, about 1984, Haier adopted Brand expression Strategy. The company itself was not settled yet so it had to build a brand image and notify to customers. so from 1990, the company started to take diversification strategy. It is also the first signal of global strategy, when Haier started to export their products to the US and Germany. From 1998, Haier selected internationalization strategy, which mode not unless exporting to overseas but marching to global market worldwide.From 2005, which was right after the company entered Indian market, the corporation took global brand strategy. Haier wanted to appeal itself as a global brand image with high quality and confidence. This menstruation of strategies proves that Haier incessantly worked hard to broaden its market strategically. From the stage when the company apply internationalization strategy, when the company starts to very find market abroad rather than merely exporting, Haier consistently adopted a Three-in-One mending strategy. Three-in-One topical anestheticization means that Haier would position itself as a local brand, produce locally, carry out a local sales strategy and create products tailored to locals needs. Basically, fix means adapting the production system and product itself to the circumstances of local industry. Through Three-in-One localization strategy, Haier could realize authoritative localization which means the company could follow the locals needs at maximum level. Haiers localization strategy was rather tactical than other localization strategies. When Haier began operations in India, the company did not execute rapid localization.Instead, it took a step-by-step approach, starting from outsourcing. When sales volume grew la rge enough, it was right time to start acquiring local assets and doing local production on its own. Haiers approach in the US was similar to the one later chosen in India. When sales grew large enough, the company began Three-in-One plan. By edifice design centre, Haier realized true localization. The material given states that Haier also replicated this model in Europe. After all, Haiers localization method seems to be basically similar in India and other countries.The difference of localization model in India and other countries would be more developed localization strategies adopted in India from the experiences of other countries. For example, Haier employ factory in India to serve as a sourcing hub to markets in Africa, the Middle East, and Southern and Western Asia. Maybe it was the geographical advantage of India that could utilize this localization strategy. Mostly, the localization strategies were similar in various countries, starting from Three-in-One localization. har monize to the situation of each country, Haier tactically and slowly accessed to the market.After building factories which means actual production being to the full held in the specific country, Haier built centers such as showrooms in retail outlets or design centers to make customers feel close to their products. Localization model used in India might not be regarded appropriate because for six years since its launching, the overall result was not satisfactory. However, from the point of arrival in India to the point of neat as a brand well known in the country, the Three-in-One localization skill seems to be worked effectively.