Case Study

6-2 Case Study Analysis: Haier: A Global Chinese Firm Leverages “Distance”

Over the past 30 years, the Haier Group, China’s leading appliance manufacturer, rose from the ashes of an obsolete Shangdong factory to become the world’s leading major appliances brand in 2012. With 2012 earnings reaching $25.8 billion, Haier was unique among emerging market firms: Instead of relying just on exports based on low production cost, it established overseas factories integrating “localized R&D, localized manufacturing and localized marketing” to continuously create demand in overseas customers, thus establishing Haier’s international brand name. CEO Zhang Ruimin has set Haier’s sights on additional market penetration in both developed and emerging markets, but must address intensifying competition at home as well.

Researching Haier’s global operations and strategic ventures over the past several years, answer the following:

1. Characterize Haier and its industry.
2. Discuss Haier’s entry timing, location selection, and modes of entry in light of the module’s concepts and vocabulary.
3. Was Haier able to leverage differences between its home and foreign institutional environments?
4. What are the strategic imperatives for action for Haier to successfully balance its international expansion with its need to deepen its home country competitiveness?

Suggested Resources:
Haier 2012 Annual Report and company website

Library Databases:

• Company information: OneSource and MarketLine
• Industry information: Net Advantage and MarketLine
•  Allowed to use only the market line and the company website as resources.