Haier in India: Building presence in a mass market beyond China Harvard Case Solution & Analysis

Haier in India: Building presence in a mass market beyond China Case Solution

Introduction

There is a strong negative perception of the Chinese products in the eyes of many people therefore,Haier adopted those set of values that are entirely different from the Chinese culture of rapid economic growth. With the rapid growth, the company decided to diversify its product into other home electronics and expand its production capacity by installing new machineries and moving into other markets. However, during the 19th century, India was not allowing to enter the foreign investors to operate in the country. Haier got the chance to enter the Indian market where the Korean manufacturers and the local manufacturers were competing against each other after the “Go Green” policy in India.

Haier adopted a three in one localization strategy to enter in any new market with which the company first made its manufacturing unit then sales headquarter unit and lastly, the design center in any new market. The same strategy has been applied by Haier after launching it in India which has not only ensured the greater market share for the company but also the overall return for the company. After the leadership of Mr. T. K. Banerjee for about three years, the company did not earn as much as expected. The new president, Mr. Eric Braganza, came in the year 2009 and he focused on the marketing and selling aspects of the company which helped in regaining the market share and increasing the profitability of the company in India.

Problem statement

Almost all the companies facenumerous issues while adopting the expansion strategy. One aspect of this issue is due to the cultural difference in the two countries. The policies that are adopted by Mr. Eric Braganza in solving the issues and whether they will work for the future of Haier or not will be discussed in this report.

Expansion of Haier in India

In 1980, India was strictly not allowing the foreign investors to invest by holding strict protectionist protocols against the foreign investment particularly against the consumer goods. Later in the year 1991 when India was in typical balance of payment crisis, the policies were changed that opened the market for the investment and remove the restrictions. Haier took this advantage and launched itself in the year 2004, however the place was already crowded with the market leaders for the consumer products, which include Korean as well as the local manufacturers.

Indian consumer durable industry

Looking at the Indian consumer durable industry, it comprises of the following types of consumer durable goods.

Among them the most promising products which generate more revenues for India are Television, Refrigerator and Fans.

Competitors in the Indian Consumer durable industry

INTERNATIONAL BRANDS

The international brands that are already present in the market are:

  • LG (the Korean company that plays a leader role in the Home Appliance market in India)
  • SAMSUNGand WHIRLPOOL (hold the second position in the market)

LOCAL BRANDS

There are some local brands in India that are playing an active role in the consumer durable industry which are:

  • VIDEOCON
  • GODREJ
  • ONIDA

Haier expansion strategy

Overall, if we try to look at the history of Haier strategies in building its brand as the world’s topmost brand, the focus of the company can be seen:

1984 – BRAND BUILDING STRATEGY

It is the year when Mr. Zhang joined the company and the company was in a distress due to the huge amount of debt. With the uncompromising nature of Mr. Zhang, the prime focus was on the quality of the product due to which he ordered the workers to destroy the defective pieces of refrigerator present in the inventory. This uncompromising nature of Mr. Zhang has helped the company in building the brand of the company which resulted in future growth..................

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