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Assignment 1

INSTRUCTIONS:

Work in pairsDeadline: Week 7 - 29 Oct 12 (Monday)

Read the following case and answer ALL questions.

Haier on a Differentiation Drive

Consumer electronics maker Haier plans to make bigger impact in the local

consumer electronic products market this year with a new range of home appliances

from LED TVs to blenders.

 According to the company’s Asia-Pacific president Philip Carmichael, Malaysia is

increasingly becoming a key market for Haier’s business in the Asia-Pacific after 10

years in the country. “Our focus now is to gain people’s trust on the Haier brand, and we

plan to achieve this by providing products that meet international standards and reliable

customer service,” he said at Haier’s product showcase in Petaling Jaya recently.

Carmichael said by producing products that are of international standards and with good

after-sales service would change people’s perception on China-based companies.

“Many people have negative perception of China-based companies, but Haier is totally

a different company,” he said. 

Haier recently is ranked the No. 1 home appliances company by business

intelligence firm Euromonitor International. “Clearly, the focus on product innovation

and quality has resulted in the recognition as we evolved into a global brand serving

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more than 100 million customers worldwide,” said Carmichael. Commenting on how

Haier differs itself from other companies, he said one of its business models as a global

company is to design products based on certain niche market demand. “For instance,

when we found that rats are a major problem for our customers in China, we designed

home appliances that are rat-proof. For American families, we offer 500 cubic liter

refrigerators that include a pull out drawer big enough to store a turkey. Meanwhile, in

Europe our Italian style three door refrigerator won the German Red Dot Design award

for its stylish design and environmentally features and in Pakistan we designed a super

large washing machine that can wash 32 robes at once,” explained Carmichael.

“For Malaysian market,” Carmichael said “Haier targets to increase its sales by

50 per cent this year (2010) from 10 per cent in 2009. Besides having new and

innovative products, Haier also plans to capitalise our service centres to the fullest.

This is to show that our customers can rely on our products as well as the services

provided. Haier now has 75 service centres throughout Malaysia and the company

pledges on a 24-hour product service turnaround. Besides that, Carmichael said Haier

will also concentrate on expansion this year to make its products and after-sales

services more accessible to customers.

 Among the new products showcased by Haier include LED and LCD TVs with

Mo-Card technology, three-door refrigerators with smart message display, energy

saving air-conditioners, washing machines that use double drive technology as well as a

number of other home appliances like blenders and wine refrigerators.

Source: NST, Monday 22 March 2010

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QUESTIONS

a. What are Haier’s vision and mission?

[20 marks]

b.  According to Haier’s president, many people have negative perceptions on

China-based companies but Haier is able to be ranked No. 1 in home appliances

recently. In your opinion, what are the success factors of Haier’s management?

Explain.

[15 marks]

c. 

Write down THREE (3)  strategic objectives of Haier in Malaysia in order to

achieve 50 per cent growth in sales.

[15 marks]

d. Describe the strategies that Haier employed in global global and becoming

number one in the home appliances industry.

[20 marks]

e. Identify and explain THREE (3) strategic weapons Haier have applied in order to

penetrate international market and sustaining competitive advantage.

[15 marks]

f. Identify and explain THREE (3) strategy elements that are well-suited for Haier, a

company in a matured (stability) industry of electrical appliances.

[15 marks]