Haier Company

 Triggers
Perceptive management
The Director Zhang Ruimin launched the internationalisation strategy by exporting
very creatively. With a method call “first difficult, then easy”. In 1992 Haier first
entered into the developed economies by directly exporting to Europe, Japan and
US markets, to obtain prestige and to establish their brand, with good supply and
marketing channels, learn advanced technology and management experience. When
the developed countries and regions have accumulated a good reputation, it is easy
to accept Haier products in the second and third-tier markets such as South Asia,
Asean and Central Africa.
 Motivations
- Proactive motives:
Managerial urge:
The Director Zhang Ruimin had an internationalization mindset that marked the
early stage of Haier's development. His strategic vision has remodelled Haier to
become the world’s largest appliance maker (Harvard Business Review, 2018).
Before embarking on expansion into international markets Zhang recognised the
need to first develop Haier’s capabilities and resources in his home country.
For that reason, Haier imported advanced technology in refrigeration from Germany
and spent seven years building up a strong brand name in refrigerator production
through a well-planned quality control system. Then in 1986, it sold products to
Liebherr, as a way of entering the German market, reaching US$3 million.
Foreign market opportunities
At that time, many countries in Europe and America were in the period of large-
scale adjustment of industrial structure and elimination of sunset industry, which
provided favorable conditions for Haier to find development space. At the same
time, they are the markets with the largest market capacity and the longest
consumption power.
Haier built their permanent market place through market entry or expansion to
defend or improve its market share. Haier’s exporting or other entry modes were all
focused on building a world-famous brand. They clearly declared that: “exporting to
build a brand, not to earn foreign currency”.
-Reactive motives
Competitive pressures
 Domestic electronic appliance market became more competitive, and therefore, less
profitable and foreign brands began flooding into China. For that reason, Haier was
under pressure to seek new markets and customers around the world. The best
defensive strategy for Haier would be to have a presence in its competitors’ home
markets.
So, On April 30, 1999, Haier set up a production plant in South Carolina in the
United States, and initially formed a "trinity" American Haier with its design
department in Los Angeles, its Marketing Department in New York and its
production department in South Carolina.

 Barriers
Lack of productive capacity to dedicate to foreign markets: Since Haier was a state-
owned organization, they struggled to achieve performance, profitability or quality
levels that were required for a global market.
Adaptation to foreign markets: Haier were experts on the local market, but they
didn’t have any experience or knowledge of the global market; entering an existing
overseas market is already a disadvantage, especially because they set themselves
close to sophisticated competitors to push themselves.
Complexity of shipping services to overseas buyers: This is a general market risk
that Haier had to deal with since their production is located in China, but they´re
entering their products into Europe and Amercia, then they’ll assume higher costs
that may not make the internationalization profitable enough.