Resources and Capabilities of the Company - Coursework Example

? Higher & Higher Table of Contents What resources and capabilities does the Haier Group appear to have? Are any of these capabilities distinctive?Explain. What will it take to make its capabilities distinctive? 3 2.What strengths and weaknesses does the Haier Group appear to have? How could it prevent its strengths from becoming weaknesses? 4 Strengths 4 Weaknesses 4 Preventing strengths from becoming weaknesses 5 3.What approach to internal analysis would you suggest that CEO Zhang Ruimin use in assessing his organization's strengths and weaknesses? Why? 5 4. Do you think of Zhang’s goals for his company? What must the company do to exploit its resources and capabilities in order to reach these goals? 6 Reference 8 1. What resources and capabilities does the Haier Group appear to have? Are any of these capabilities distinctive? Explain. What will it take to make its capabilities distinctive? One of the most prominent capabilities developed by the company is its diverse variety of products in the home appliance market inclusive of consumer electronic products, air conditioners, computers, mobile phones, washing machines, microwave ovens, televisions, refrigerators etc. This wide diversity of products allows the company to capture a considerably large portion of the market including households and large corporate also (Hunt, p.2-5). Sound technology used by the company clearly distinguishes it from its competitors. In many nations, such as India the company was able to acquire large proportions of the market using technological and innovative changes in its products and product lines in order to cater to the changing needs and requirements of customers (Hunt, p.2-5). Strong innovation initiatives are one aspect which distinguishes the company for its competitors. The company has always strived to add value to its products and product lines with the purpose of serving the niche markets in a better way compared to its competitors. This is particularly helped the company in attaining the faith and loyalty of customers as one of the most trusted brand names and superior deliverer of quality products in the global market (Hunt, p.2-5). One of the most distinctive capabilities of the company has been cater to individual needs of the nations where it had operated. Its strategies have been different for different countries, like India, China etc. For example, although its e-business strategies were not really welcome in China because of its lack of technical knowhow and infrastructure and consumers remain reluctant to use the internet as a common medium for doing business, the company has been successful in penetrating into the Chinese market by successfully implementing an e-business strategy that was particularly customised for the Chinese market (Roger, p.651). 2. What strengths and weaknesses does the Haier Group appear to have? How could it prevent its strengths from becoming weaknesses? Strengths One of the main strengths of the company is its wide range of innovative products which has successfully made its entry into the global economy. For example, one of its most prominent and innovative products was the frog shaped television console which could be doubled like a night light and which would automatically ask questions on maths problems to the kids before they switched it off. Some of the other innovative products included compact refrigerators, office refrigerators and wine coolers. The company has also successfully shown radical improvement in its product qualities driven by the initiative of its CEO Ruimin. Clear vision, strict discipline coupled with requisite efforts from the part of the CEO has acted as an active strength for the company in expanding its size across the international market and beat some of the major competitor players in the market like Whirlpool, General Electric, Electrolux and LG Electronics (Alon, p.62). Weaknesses The Chinese brands have inherently carried the name of low end and low quality of products. This image has spread worldwide which consistently acts as a barrier for Haier to establish itself as a high quality product brand. Transforming the image carried for so long is hard for the company and involves a great deal of intense efforts from the part of the management of the company. There has been the entry of a number of home appliance manufacturers in the Chinese market which had forced the Haier Group Company to undertake international expansionary strategies. The Chinese market has got saturated with home appliance product companies and this has intensified competition in the country accounting for one of the main weaknesses for the same (Hollensen, 2009, p.51). Preventing strengths from becoming weaknesses Rapid global expansion might disallow the company from gaining competitive advantage in any particular segment of the market which could consequently prevent it from attaining the top position among competitors. Thus it is crucial that the company concentrates on particular market segments and broaden its entry in the same segment itself. Additionally strict discipline displayed in its tall hierarchical organizational structure might not be appropriate in nations other than China and might go against its favour. Some nations like USA favour flatter hierarchies and friendlier working atmosphere. This means that the company must seek to contently upgrade and adapt its structures according to the places where it operates and adopt the local cultures and practices. 3. What approach to internal analysis would you suggest that CEO Zhang Ruimin use in assessing his organization's strengths and weaknesses? Why? Haier has the internal strength of enjoying a well known brand name and also having a high reputation of producing reliable quality of products and high rated customer services. It pursues on the service policy that the customer is always right and strives to create ‘good impression’ on them. This is way it seeks to achieve high reputation and high customer satisfaction. Additionally its internal strengths lay in its product innovation and management practices. At the end of 2009, the company had earned the reputation of being ‘innovation driven’ and had applied for 9738 patents holding the topmost position among all Chinese enterprises. Another internal strength of the company lies in its ability undertake extensive product diversification strategies and to expand its brand name beyond washing machines, refrigerators, air conditioners and various other items in the product line. One of the internal weaknesses of the company lay in its lack of core competencies in the international market. It lacks behind some of the major giants in the category like Whirlpool in terms of capital, management and technology. The company also faces difficulty in exchanging data and electronic information with its distributors and suppliers consequently leaving its purchasing powers and distribution costs quite high. One of the other crucial internal weaknesses of the corporation is its inability to implement effective global marketing promotional and advertising strategies. Its selling proposition tends to be changing continuously and this creates lack of distinctive advertising appeal towards the global target customers (Chan, p.4). 4. Do you think of Zhang’s goals for his company? What must the company do to exploit its resources and capabilities in order to reach these goals? The main goal of Haier must be to enhance and improve its brand image in order to increase international expansion in the global markets. This can be done by transforming its global reputation of being a low quality product deliverer. The main capability that it must use to its advantage is to use its power of innovation and diversification strategies in the international markets. Innovation has been one of the main strengths of the company which has popularised its products considerably in the local markets as well global markets (Chan, p.4). Its strategies must be innovation driven so as to attract new customer bases and stay ahead of competitors. Innovation must not only reflect through the technologies it uses but also through the product diversity it uses to penetrate and spread across the markets. It is seen that there has been a flouring interest and opportunity for ‘green’ electrical appliances which are energy efficient and environment friendly as well (Chan, p.4). There has been an increase in home appliance products used in households in China which have been the major cause for high carbon dioxide output and have been increasingly contaminating the air. This has been the major cause of concern for the Chinese government. The phenomenon could be used for the company’s advantage for the creation of such products which limits carbon dioxide emissions and is more eco-friendly. It would be wise of the company to develop as many green products as possible in order to maintain sustainability in its development (Chan, p.4). It is seen that increasing globalization, there has been mutual interdependence in business operations among competitors in the market. As there has been a gradual penetration of major giant companies in the Chinese market for electronic products, it is difficult for the company to develop and maintain sustainability. It is thus recommended that Haier must enter into mergers and joint development strategies and partner itself with other businesses in order to strengthen its position in the global market. Reference Alon, I. Chinese economic transition and international marketing strategy. Greenwood Publishing Group. (2003). Hunt, L. The Story. 2005. Haier Group Company. January 28, 2012. < http://ritamcgrath.com/ee/images/uploads/Haier_Report.pdf>. Hollensen, S. Global Marketing, 4/E. Pearson Education India. (2009). Chan, X. Internal Analysis. 2011. A SWOT Study of the Development Strategy of Haier Group as One of the Most Successful Chinese Enterprises. International Journal of Business and Social Science. Vol. 2 No. 11 [Special Issue - June 2011]. January 31, 2012. < http://www.ijbssnet.com/journals/Vol._2_No._11_%5BSpecial_Issue-June_2011%5D/21.pdf>. Roger, K. Strategic marketing problems. Pearson Education India. (2010). Read More