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Table of contents
1. Key elements of Haier’s success ....................................................................................... 3
2. Difficulties. ......................................................................................................................... 4
3. Haier’s brand strategy. ....................................................................................................... 5
4. Suggestions ....................................................................................................................... 5
Reference list ............................................................................................................................ 7

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1. Key elements of Haier’s success
Big vision and ambition: Haier has the goal of becoming a "world-class brand". They
started to build from just one product in the beginning, the refrigerator, and then the company
expanded, developed, and gradually diversified its product lines of household appliances
including 96 different product types. Currently, Haier's 4 main product lines include refrigerators,
freezers, air-conditioners, and washing machines.
Building an excellent operating facility focusing on product quality. Haier applies the
OEC (Overall Every Control and Clear) method to effectively control daily operations from all
stages of the production process. All operations comply with the 3-0 strategy (No quality
defects, zero service gap, zero operating costs) referring to the company’s commitment to
producing high-quality goods.
Focusing on building its brand: Haier only accepts high-quality products, and they are
willing to destroy defective products produced by the company to protect its branding in front of
its competitors and sell to customers. Building their brand can differentiate Haier from
competitors and position them in customers’ minds.
Innovation is company culture: continuously developing and absorbing knowledge and
innovating products to meet each requirement of local customer groups is the core condition
that any business needs to achieve to win the market share. Haier has developed its
competitive advantages and sustainable growth through technology, products, management,
services, ideas, and employees.
Flexibility in the expansion strategy in each stage: Initially, Haier focused on developing
and leading in the domestic market. After that, Haier began to cooperate with foreign brands,
especially Germany, to learn technology and become their partners. Penetrating new markets
through export activities, then when they achieve a certain growth in new markets, Haier takes
advantage of inherent advantages in the domestic market in terms of supply of components
and raw materials, materials, combined with advanced technology from developed countries
and strives to become the market leader.

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 Haier Group: Strategy phases, 1984–present
Cooperation and partnership to overcome disadvantages when entering new markets
is a strategic approach that leverages the strengths of established entities. For example, Haier
cooperates with Cosco to supply and distribute its products, and partnership with very well-
known e-commerce platforms such as eBay, Amazon, and AJ Madison for Sales. Promote its
products through outlet stores and Internet sellers and cooperate with A&E factory service to
provide warranty and services.
2. Difficulties.
To stay in business, Haier had to learn how to overcome several obstacles it faced when it first
entered the US market.
The diversity of customer needs is one of the major difficulties when Haier enters the US
market. American people are accustomed to using high-standard products according to product
quality, functionality, and design. At that time, major competitors such as Electrolux, GE,
Whirlpool, and Maytag accounted for 95% of the market share. Therefore, Haier is aware their’
s disadvantage so it chose to participate in the niche market such as mini refrigerators where
there were not too many competitors in the beginning.
Lack of advantage in several factors such as production technology, higher production, and
labor costs are much higher compared to when they operate in China. Other resources are
limited such as services, marketing, and supply chain capabilities, and do not have famous
brands in the market. Therefore, Haier invests heavily in marketing to communicate the value
of its products to customers, promotion programs, and placements.
The distribution network was quite limited at first time, if Haier wanted to approach

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customers, its products needed to be sold in major retail outlets such as Walmart, Cosco, etc.
The political environment such as “The Trade war between the US and China” currently
impacts the business operations of Haier in the US market. For example, the cost of importing
material from China is higher and overall affects the profit margin. The supply chain
management of Haier might be disruptive and delay the time to produce and deliver to
customers. Trade War also influence consumer’s perceptions and they may refer to
domestically produced goods over Haier’s goods.
3. Haier’s brand strategy.
There are several reasons why Haier chose the Brand strategy when expanding to the new
market.
The first reason that Haier engaged in the new market is that it was already leading in China’s
appliance market, and they knew that it was less profitable due to market maturity. Through
expanding to the new market, Haier finds the opportunity to grow. Haier chose to expand into
the US and Europe, very tempting and competitive, which are markets with high demand for
White goods product lines and consumers willing to pay for premium products, potentially
leading to profit.
The second reason is Haier knows that by selling its branded products it will achieve high-
profit margins instead of developing the company to become a supplier for other companies
like many Chinese companies doing. Haier believes that once they have built brand recognition
in developed countries, it is much easier for them to expand into another market in developing
countries such as Middle East, Southeast Asia and its products is easier to be accepted by
customers in that country.
The third reason is Haier implements a globalization strategy and understands that to sell
directly to high-standard customers, they must be an international brand, and this can only be
through building a global brand so that they can compete with big key players in the market.
Only when more customers are aware of its products, they can gain market share.
4. Suggestions
In the White Goods Industry, there is no big advantage that can create new entries.
Therefore, even though Haier became a global brand, it still can be replaced by another in the
future. To maintain a competitive advantage and have sustainable development, Haier
continues to pursue Innovation for its future growth in new markets. Because
Until now, Haier has chosen to grow through diversification by providing more and more
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features to different customers. However, in the long run, this might not become a competitive
advantage for Haier. Focusing on building a core technology that cannot easily be replaced
by other competitors should be considered for Haier’s strategy. Even though Haier entered the
developed country, it still struggles to win the market share in these countries. And the storm of
technology is increasing faster than ever making customers have high expectations and
innovation by adding features is not effective in the long – term while it is not difficult for other
companies to do it if they have the big resources to use. Developing its core technology to its
products might stop the entries entering this industry in both existing and new markets.
These days, consumers care more about the value of products which means not only about
the technical part or how convenient and good features. They care about the environment and
expect to choose eco-friendly products. To meet customer demands, continuing to research
and develop the supply chain for eco-materials might be considered in their development
strategy.

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 Reference list

Dai, L. and Yin, H. (2023). Win-Win Value-Added Statement and IoT-Based Business Model
Innovation: The Case of Haier.
Lu, Y., Mockler, R.J. and Gartenfeld, M., (2024) HAIER GROUP: THE HOUSEHOLD
APPLIANCES AND CONSUMER ELECTRONICS SEGMENTS OF THE DURABLE
GOODS INDUSTRY.
Zhang, K.H. ed., (2006). China is the world factory. Routledge.

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