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Haier Case Essay

811 words - 4 pages

1. What unique resources and competencies contributed to Haier's success in China? Which of these resources and competencies enabled Haier to expand globally?
The most crucial unique resource and non-location bound firm specific advantage was the CEO’s, Zhang Ruimin’s ability in getting workers to understand that Haier’s commitment to quality was unlike anything seen at other Chinese companies.
Tacit know how deriving from his management skills, as well as explicit (or upstream) knowledge from “observing, digesting and imitating” operations and production of well established German companies, and importing foreign technology and design from Japan and Italy made it possible for Haier to ...view middle of the document...

Out of the above-mentioned resources, Zheng’s management skills, in line with his aspiration to provide quality and innovation while being responsive to the market, is what enabled Haier to expand globally and strive to establish the same reputation overseas.

2. How did Haier augment its unique resources in the various foreign locations?
Besides the initial direct exports, Haier invested in technical alliances in the form of joint ventures with multinational brands. This way, the firm capitalized on local knowledge of the market and best practices in the distribution channels of the local partners. They employed local managers who had been (in some cases) previously working for competitors and were all experts in the market for household goods. In India for example, where the main challenge was to find the top distribution channels, Haier relied on a former Whirlpool executive to help them establish the whole market from choosing factory, through suggesting modifications on the product, to developing the distribution channels.
In a later phase, Haier initiated foreign direct investments, building research and development parks and factories even in the USA where wages could be 4 fold of the Chinese wages. Employing local work force increased Haier’s resources as local people know the local market and they have the local thinking to satisfy the needs of customers. Based on their feedback, product differentiation was made possible...

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