Introduction to Strategic Management of Haier
Today, all over the world people are more concerned with the utilization of appliances in their homes and offices. Appliances may vary from home appliances, kitchen appliances to electronic appliances. In general, most of the time people use electronic appliances in their daily lives. The assignment is based upon the strategic management of HAIER. The selected organization is the fastest growing provider of appliances all over the world. The company has held the largest worldwide shares in market regarding appliances from the year 2011.
It is very significant for the appliance selling organizations to think about the strategic management of the business for a smooth running of business. The assignment is divided into two parts. The first part is concerned with the strategic analysis of HAIER. The second part is concerned with other strategies like growth strategies, branding strategies, social and ethical strategies and relationship strategies. Moreover, the company HAIER sells products like refrigerator, air conditioner, washing machine and so on. During summer time, people prefers to stay in an air conditioned room and use fridge and that is why it is important for organizations like HAIER to take care of the demands of the customers. Therefore, the appliance company must make strategies and marketing plans to perform a good marketing to their potential customers.
Mission and Vision of HAIER
Like every appliance companies, HAIER also has mission and vision. The mission and vision of HAIER are described below
The mission of HAIER is to create a value for their potential customers with the aid of development of leading service centers. The leading service centers should focus on the sector of main steel end-user. The sectors are automotive, industry as well as household appliances. Secondly, the mission of HAIER is to compete on the on the international markets(Cravens and Piercy, 2013). As a result, the particular mission will help HAIER to get a privilege on partnerships with proactive structured approach. Moreover, the Chinese appliance company is aimed at increasing the reciprocal advantage of assimilation in business with the clients.
The vision of HAIER is to confirm their position among the Chinese competitors and all competitors from the world. The main plan of HAIER is to create a popular position by means of partnership. Consequently, this particular plan will help the company to enhance their range of products offered(Ansoff, 2014). It will also help them to develop and consolidate the business relations. Besides that, the particular strategy will help them to innovate their products along with the process technologies. At second, other vision of the company is to expand and develop their international marketing as well as extend their service coverage and flexibility of production to their customers.
Strategies of HAIER
From the research, it has been found that HAIER is fighting hard to create a popular position in the market of United States. The company should follow market entry strategies for making a mark in the United States and all over the world. The organization can follow export mode and foreign direct investment for their market entry strategies(Hitt, Ireland and Hoskisson, 2017). Based on export mode, HAIER can use direct mode. Direct mode is a market entry mode where exporting of goods and products is done to the buyers directly. On the other hand, the organization can also implement indirect export mode for exporting their products by means of independent organization in manufacture’s nation. Generally, the indirect export mode is applicable for the business firms without experiences in exporting process. In most of the cases, exporting is used as the primary step for entering in the foreign market.
Concerning about the foreign direct investment, HAIER can make investments in manufacturing as well as service facilities in United States of America with apurpose to engage actively in managing them. HAIER can get benefits by implementing foreign direct investment as it can reduce the cost of sales by avoiding the cost of tariff and transport.
Competitive Analysis of HAIER
The competitive analysis of HAIER can be determined by identifying the competitors of the particular organization. The competitors of HAIER are LG electronics, Videocon, Hitachi and GE General Electric. These competitors pose a serious threat to HAIER. These competitors rise wages in China market and it puts a pressure on the pricing of HAIER. Therefore, the organization should make an appropriate pricing strategy so as to attract customers to the company. Moreover, possible reduction in most important appliances spending in China specifically in the premium division where the organization is present through its leader and casarte brands. In strategic planning of HAIER, competitive analysis play a major role in the business.
It allows the strategic planners of HAIER to improve and develop matrixes for spotting unwarranted gaps in the market(Werther, 2001). Moreover, the competitive analysis helps in developing innovative products. HAIER can determine what innovative features should be added and what not. Besides that, competitive analysis helps an organization to reveal broad trends in the marketplace. A competitive analysis on the other hand is useful for HAIER to determine the strength, weakness, threats and opportunities of the company. During processing a competitive analysis, the business firm will be able to determine the needs and wants of their potential customers. It is significant for every appliance selling organizations to know the demands of the customers.
It is very important for each and every companies to implement a market segmentation process for the segmentation of customers. It means HAIER needs to identify which place is suitable for their marketing and what type of customers are suitable for their product. Also, market segmentation is done by four segmentation method such as demographic, psychographic, behavioral and geographical segmentation. The segmentation process is very long and it can be utilized for both the consumer and business consumer. It is necessary for HAIER to use behavioral segmentation for identifying the buying behavior of the consumers. Behavioral segmentation will help HAIER to determine the demands of the customers. Demographic segmentation will helps HAIER to determine the age, gender, social class, marital status, income, religion of individual(HOWELL, 2011).
The particular segmentation undertakes that consumers with similar demographic profiles will exhibit similar patterns of buying. In the meanwhile, the organization can utilize psychographic segmentation for the determination of people’s lifestyle, their interest as well as their activities. Moreover, psychographic segmentation is useful for determining the opinion of the customers to define a market segment. At last, geographic segmentation is also very useful for organizations like HAIER to divide people based on their geographic location. The customers of HAIER may have different requirements based on their geographic location.
Targeting and Positioning
The selection of a targeting strategy is the accompanying step from finishing segmentation. Targeting just watches the individual area where segmentation pieces the aggregate market. Targeting then makes plans to get customers inside that segment. On a very basic level, targeting is a subsection of segmentation. Besides that, the target market must be critical. In any case, from inside the separated market, HAIER have to find the hugest targets.Regard is animmense term and along these lines any market that is separated passes on a massive regard. Meanwhile, the preferences of customers elites the targeting framework. It same point can be uncovered when you endeavor to develop a cabin.
Target market helps HAIER to play out a gap analysis. In gap analysis, the organization endeavor to find gaps in the present market circumstance and they then realize plans and methodology to get customers who fall inside that gap. The targeting arrangement of HAIER needs to consolidate events and shows in the subject of gaining ground toward natural invitingness where by far most of my target customers will be. So to make a targeting framework, HAIER require incredible market information do that the company can coordinate their own specific gap analysis. The strategy of positioning can be considered and made in a variety of ways(Jackson, 2007). It can be acquired from the challenge properties, application, contention, the sorts of customers included, or the traits of the product class.
Each one of these qualities address a substitute approach in making arranging frameworks, in spite of the way that each one of them have the typical focus of reckoning a positive image in the minds of the clients or gathering of spectators. Another arranging system is to interface the product with its customers or a class of customers. Making of home and office mechanical assemblies have exhibited organizer namesfor the development of an outline image. For this circumstance the longing is that the model or character will affect the image of the product by reflecting the qualities and image of the model or personality conferred as a product customer.
Market Trends and Structures
The market trends and structures of HAIER depends on four factors such as customer focus, empowerment of employees, reduction of cost and adaptability. The marketing trends and organization structure of a business helps a firm to retain the employees and keep the customer satisfied. Moreover, HAIER increasingly focus their operational structure on making an outcome that their customers finds valuable(Spence, 2011). Besides that, the organizational structures helps HAIER to identify the characteristics and features that meet the demands of the customer and challenge their company for satisfying those requirements. On the other hand, a marketing structure is significant for an organization to make a market segmentation of target customers. The trend concerning about the empowerment of employees is supported by evidence that the organizations that provide the employees more responsibility and a corresponding authority to make decisions accomplishing higher job satisfaction and performance of employees.
Growth Strategies of HAIER
Every organization wants to grow up their business. It is necessary for every companies or organization. The companies have to upsurge the level of their profit level and sales level. There are some process for every organization to grow up their business. The head of the organization needs to concentrate upon the financial condition and they needs to maintain their competition level. According to these, they also should maintain the government rules and regulations(Antoniou and Ansoff, 2004). Along with these, there are few collective growth strategies such as product expansion, market expansion, market penetration, diversification and attainment.
Product expansion is an important part to increase a business of HAIER which is a Chinese appliance company. The company have to make new products with excellent features for their customer so that they come to buy the new products. It helps the chines company HAIER to develop their profits and sales. According to these, the organization HAIER also should develop their old products. These are important because new products with outstanding features are attract them and they also demand these with reasonable price. Therefore, the organization should make their plan based on their consumers demand. Nowadays, technology development is needed because the chines company HAIER make best and new products through technology development.
For the organization HAIER, they needs to sell their old and new products in different markets. Through this method, consumers get to know the information or features about their products(Antoniou and Ansoff, 2004). It also can expand the organization’s sells and profit. According to these, this process also helpful for the chines company HAIER to reach the level where they compete with other organizations or companies. For the market expansion, they catch new customers for their new and developed products.
HAIER can enter in the market of US by means of export mode can divided into two parts such as direct export mode and indirect export mode. It is recommended for HAIER to implement direct export mode at first.
Foreign direct investment (FDI)
Foreign direct investment is a part of market penetration. The foreign investors help HAIER through financial support as investment for the business expansion process in US.
Diversification means to divert new products of an organization into new markets. According to research, diversification growth plan is very risky. Therefore, HAIER needs to make a proper idea to use the diversification strategy for growing up their business. Along with these, before using the strategy an organization have to research about the new market and also about the needs of the customers(McGee, 2014).
Branding of HAIER
Customers wants branded products. Therefore, every organization have to maintain their product quality in front of the consumers. It increases the product value to the customers.
- Retail brand - Service experience and product combination are assembled by the retail brand.
- Service brand - Culture, experience and knowledge are the main reasons for building up the service brand.
- Product brand - Product brand is mainly based on the experience of the organization.
There are 3 kinds of brands which discussed in below.
Position and Differentiate of the Brand
An organization have to attract their customer through their products. Infect, by this process, the chimes company HAIER can increase the number of consumers. On the other side, the organization HAIER should create a perfect plan for making the logo of the company and also the colors what is suitable for the logo(McGee, 2014). These also attract the customers. Through these, an association make its own in the market. Along with these, it also can compete with its competitors.
Build and Expose the Brand
The organization HAIER have to maintain the quality of their product to build up their business in the United State. Through their god quality products they can gain their position in the market. On the other side, they should develop their products. After doing these, they should advertise their products for exposing their brand through campaign, using banner, social media and blog etc.
Personalize the Brand
The organization have to identify the special part which can attract the customers to their product. Therefore, they can show it in front of the people. According to this, they also should concentrate on the demands of the consumers because it also make a perfect relationship between them. Therefore, by this process the organization HAIER can build up their business in the market.
Review the Brand: The brand of HAIER can be reviewed by taking feedback from their potential customers(Spence, 2011). For that, the organization needs to strengthen their relationship with the customers and gain customers loyalty and trust. In simple words, a consumer can provide a review of a product from HAIER.
Customer Relationship Strategies
It is very significant for HAIER to implement a CRM or Customer Relationship Management strategy for strengthening the relationship among the company and the potential customers. Initially, customer service department of HAIER must respond to each and every phone calls of customer and provide a solution to their issues regarding their utilization of product. Moreover, HAIER must stay proactive. If the organization do not present their customers with new and innovative ideas to aid them better manage their business, then the rivals of HAIER will beat them in the competition market. The Chinese company needs to offer innovative suggestion to their customers constantly for retaining the business of customers(HOWELL, 2011).
If the organization plans to strengthen the relationship between the customers and the company, then the customer service department of that company needs to pick up the phone and call at least once a weak for discussing about the satisfaction of customers with the business firm. The employees should jot down the improvements which would be told by the customer. It should be done to meet their demands.
Additionally, the organization must provide the customers with extra customer service for gaining customer loyalty and trust. HAIER should reach to their customers with free promotional products from time to time such as room fresheners which should be a free product with every air condition machines they purchase. Aside from, HAIER should organize special events for the customers like parties, golf outings, as well as family picnic that will allow the customer to feel respected.
Social and Ethical Strategies of HAIER
Whatever company or organization it is, the prime target of the company is to attract as much as customers are possible, for that the management of the company would have to be very much concerned about the business strategies of the organization. Each and every sector company should be run by the management with some certain and specific strategies. Same goes for the social aspect of the company and the ethical factors of the company. Thus it is the responsibility of the management of the company to maintain both the mentioned factors with proper care and strategies.
Social factor is one of the most important factors for any company. this part falls in the category of the business environment of the company. The society of the place in which the management of the organization is running the company is the most important factor for the organization itself. The society of the place includes the inhabitants, their needs and preferences, their culture and background. Thus when it comes to the social aspect of the company, the management of the company has to look after all the mentioned factors also. Thus if the management of the company fails to prepare good and better strategies for the betterment of the company, they would never be able to get success in their business. In this report, the mentioned company, HAIER being one of the most renowned electronics company in the world it is quite clear that the management of the company has been able to get accustomed it the society of the environment of the business by following some certain and specific strategies.
The ethical factor of the company is another important point that the management of the company should always be aware of for the improvement of the business of the organization. in cases of diverse workplaces, the ethical issues are very common to occur. In an organization, especially in a large scale multinational organization like the mentioned company HAIER, there are many employees who belong from different culture, language, religion and background. Thus the mentality and the psychology of the employees are also different from each other. This phenomenon most of the times leads the workplace into a disturbed workplace, as the employees of the company indulges themselves in some internal conflicts and clashes.
As a result, the company or the business of the company is severely harmed. To stop this kind of issues, it is the responsibility of the management of the company to implement appropriate strategies such as building a nice communication with the employees of the company. this will help the management of the company to get more involved with the employees of the company. if the employees of the company can work together and maintain a nice and pleasant workplace in the organization, it would be easier for the management of the company to run the business with success and prosperity.
Innovation of HAIER
As mentioned earlier in the above passages, that the mentioned company, HAIER is one of the most successful and established electronics company in china which has its branches almost all over the world. For a large scale company like this, it is really important to develop the organizational factor for the consistency of the success of the company. if the management of the company do not develop the internal and the external skills of the company the management would not be able to run their business and would not be able to compete with other rival organizations.
Each and every organization is trying to innovate their business by adding some selling points, pleasing the customers and by satisfying the employees of the company. if the management of the company wants to remain successful in the electronics market, they would have to do the same thing which is to develop or improve all the internal and external factors of the company such as the employee performance of the company, the production procedure, communication with the customers of the company and many others. The first thing that the management of the company must do is t provide good quality products to the customers of the company. This will surely satisfy the needs of the customers.
Low price strategy is also a very useful strategy for any company. If the management of the company can provide good quality products in low price, the customers of the company would be really pleased which is beneficial for the betterment of the company or the organization. Similarly the management of the company would also have to be more concerned about the basic needs and the requirements of the employees of the company. If the employees of the company are satisfied with the management and the facilities provided by the management of the company, all the other aspects of the company will be benefited such as the working environment of the company and the production procedure of the company. Thus as per as some of the previous surveys conducted on the HAIER company, it is quite confirm that the mentioned company is very impressive with their innovation techniques.
The Concept of Value in HAIER
Each and every sector of the company has a definite value that the management of the company should be aware of. In this for, for HAIER Company, the management of the company as well as the employees of the company give value to the sectors of the company such as the employee performance of the company, the production procedure of the company, the customer satisfaction of the company, internal working environment of the company and many others. the management of the company is brilliantly working on the mentioned topics which is the prime reason behind the success of the company
A strategic management is required by every international companies. The manager of HAIER needs to depend on the skillful utilization of organizational control systems that consists of behavioral, output and clan control for executing the strategies effectively. Apart from strategic management, the manager of HAIER also needs to look after the legal form of business. The decision regarding legal procedures of an organization is an important decision with implications for the organizational structure of HAIER. The above mentioned strategies will help HAIER to gain competitive advantage and customer’s trust and loyalty. Customers are the main income of a business and therefore customer service should be provided well so as to meet their demands.