Higher and HigherYou may not be familiar with the Haier Group (sounds like “higher”), but if you’ve ever shopped for a refrigerator, microwave, wine cellar, or air conditioner at Wal-Mart, Bed Bath & Beyond, Lowe’s, Home Depot, or Target, you’ve undoubtedly seen, if not purchased, the company’s products. And Haier’s name surfaced in the U.S. business news headlines in late 2005, when it made a bid to purchase domestic appliance maker Maytag. Today, Haier exports its products to more than 160 countries and regions, and its annual revenues are over $12 billion.

Haier Group is China’s largest home-appliance maker and CEO Zhang Ruimin has ambitious goals for his company. Whereas the United States had General Electric, Germany has Mercedes-Benz, and Japan has Sony, China has yet to produce a comparable global competitor. Zhang is hoping to change that. Haier enjoys enviable prestige in China (a survey of “young fashionable” Chinese ranked Haier as the country’s third most popular brand behind Shanghai Volkswagen and Motorola, with Coca-Cola fourth), but Zhang isn’t satisfied. He wants to gain worldwide recognition, build the company into China’s first truly global brand, and be listed on the Fortune Global 500. But accomplishing those goals may mean losing the “Chinese-ness.” In an online survey conducted in 2005 by Interbrand, 79 percent of the respondents believed that a “made in China” label hurts Chinese brands, with the biggest challenge to Chinese companies being to change the impression on Chinese products as cheap, poor value, poor quality and unreliable.

The Haier Group started as the Qingdao Refrigerator Plant. When Zhang took charge of the government and controlled company in 1984, his first action as CEO was to take a hammer and smash 76 refrigerators because of their poor quality. Why? To drive home the point that product quality was going to improve. At that time, the company had only one product and 800 workers. Today, the company has over 50,000 employees in various locations making some 15,000 different products in over 96 categories ringing from air conditioners to mobile phones to vacuum cleaners and more. It has manufacturing facilities in 13 countries including the United States and throughout Europe, the Middle East, Africa and South Asia. In addition to its manufacturing facilities, Haier has 18 research and development and design centers around the world. On average, Haier innovates 1.3 new products per day. Continuous innovation is the soul of Haier’s corporate culture. And the company’s products are now known around the world for quality and innovation.

In Zhang’s push to make the brand global, Haier began sponsoring an Australian basketball team now known as the Melbourne Haier Tigers. It also recently signed a sponsorship deal with the West Tigers Rugby league team in Australia, and has become the marketing partner of the NBA in the United States. And in its biggest strategic coup of all, the Haier Group has been selected as the official home-appliances sponsor of the Beijing 2008 Olympic Games. This type of exposure is likely to go a long way toward Zhang’s strategic goal of becoming a truly global brand.

Discussion Question

1. What competitive advantage(s) do you think the Haier Group has? What competitive strategy does the company appear to be following? Explain your choices.

2. What corporate strategic goals does Zhang have for Haier? Do the company’s strategies appear to be helping it reach these goals?

3. How might a SWOT analysis be useful to Zhang Ruimin?

4. Describe the culture at the Haier group. Why do you think this type of culture might be important to such a company?

5. Describe why it would be important for new recruits to learn the organizational culture and how might new employees ‘learn’ the haier group culture?

6. What global attitude and perspective do you think would most support and promote the Haier group in its quest to become a truly global brand? Explain.