Strategic Audit of Haier Group. Case 24 Strategic Management MGMT 436 Group 5 . Current Situation (Jw Hayes). Current Performance 2001 to 2004. Organized into 6 Divisions: Haier China Haier Europe Haier America Haier Middle East Haier Spain Haier New Zealand.
Strategic Audit of Haier Group
Strategic Management MGMT 436
Current Situation (Jw Hayes)
Organized into 6 Divisions:
Haier Middle East
Haier New Zealand
(L., and Hunger 24-2)
Top 100 Most recognized Worldwide Brand Name
20 Year Old Company from China
Produce Home Electrical Appliances
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
(L., and Hunger 24-1)
2004 Global Sales $12 Billion
4th in Global Sales revenue for White goods in 2004
21% Market Share China overall Appliances
34% Market Share China Major Home appliances
14% Market Share China small electronic appliances
(L., and Hunger 24-16)
("Haier: about us," 2011)
(L., and Hunger 24-1-26)
Three Stage Growth Plan
L., and Hunger 24-23-24)
L., and Hunger 24-23-24
2. Corporate Governance
Board of Directors
OTHER BOARD MEMBERS ON BOARD MEMBERS
Bloomberg, Initials. (2011, May 10). Industrial conglomerates. Retrieved from http://investing.businessweek.com/research/stocks/private/board.asp?privcapId=29621318
Haier: about us. (2011, May 10). Retrieved from http://www.haiereurope.com/en/haier-mission
L., Thomas, and David Hunger. Strategic Management and Business Policy: Achieving Sustainability.
Pearson College Div, 2009. 24-1-24-26. Print.
III. External Environment (EFAS table) (John Lerch)
B. Societal Environment
C. Task Environment
III. EFAS Table(John Lerch)
IV. Internal Environment (John Taylor)
C. Corporate Resources
a. Introduced its Two Brothers logo into the U.S. market to boost its brand image. (W)
b. Promoted mostly by outdoor advertisement, airports, magazines, heavily in trade publications, and on the internet. Outdated website. (S)
c. Little TV advertising, company sponsored sports teams and low brand awareness. (W)
a. 85% of company orders came from top 10 Chain stores in U.S. and Europe (S)
b. Average annual growth rate of 78% from 1984-2001. (S)
c. Ranked 4th in major appliance sales worldwide
at the end of 2004. (S)
V. Analysis of Strategic Factors(John Lerch)
V. Analysis of Strategic Factors (John Taylor)
B. Review of Current Mission and Objectives
1. Needs to build brand recognition and enhance its brand image.
2. Expand U.S. facilities to allow for in country manufacturing of company products.
3. Introduce a wider range of products into the U.S. market.
V. SFAS Table(John Lerch)
VI. Strategic Alternatives and Recommended Strategy(Shavera)
A. Strategic Alternatives1. Stability Strategy: Pause/Proceed with caution.a. Pros: Enables the company to focus on new market
strategies, and consider focusing on its core products.b. Cons: Possible loss of market share.
2. 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.
a. Pros: Enables the company to more quickly capture and respond to local trends and increase competitiveness
(Wheelen & Hunger, 2010).b. Cons: Aggressive competition
3. Retrenchment Strategy: Sell Out/Divestment Strategy.a. Pros: Allows the company to exit out of markets like the personal computers that are struggling and unprofitable.b. Cons: Loss of market share and a decrease in profits.
B. Recommended StrategyRecommend alternative # 2 which is the Horizontal Growth Strategy. Haier Company needs to focus on niche markets in the U.S. to satisfy those customers’ wants and needs. The concentration should not be on diversification, but rather building a strong brand name and image in the U.S.
Wheelen, T & Hunger, J. (2010). Strategic Management and Business Policy. 12th Ed. Prentice Hall.
A. Competition for Haier is all over the place. Finding something like a new hit product that will make them stick out over all the rest will benefit the company highly. However they need to be careful to spend their money in the right areas and make sure it doesn’t go to waste ending in a overall bankrupt.
B. Haier needs to improve its stocking abilities by using technology to their advantage. They seem to lack in keeping popular items on hand and ready to ship. Using technology will help them keep up with what sells out the quickest in various locations.
VIII. Evaluation and Control
With Programs in place The Haier Group seems to have there evaluation and control in place. The Haier group has had three growth stages Brand Name Strategy, Diversified Development Strategy, and Going Multinational Strategy
2. To better on the already ever improving Haier Group CEO Zhang Ruimin combined traditional Chinese culture and Western industrial experience. Which this in turn meant the Implementation of OEC (Overall Every Control and Clear) market- chain system. To help aid this Strategic Business Units were also put in place to help encourage employee enthusiasm and competitiveness.
3. There have been many different plans and strategies have been put in place to keep the management and overall company structure ahead of the competition. Lack of technological advancements or even sluggish technology is the only thing holding the company. With the philosophy of the management to already quickly identify problems, search for the cause of the problem and find a solution one by one. There should be no reason for this company having any problems finding ways to evaluate and control.