Haier Strategy Analysis - Research Paper Example

The company approaches the corporate-level strategy by establishing subsidiaries in different locations. Presently, the company has subsidiaries in 13 countries with eight being design centers and ten information centers. Analysis of Haier’s strategies using the BCG matrix indicates that, the developed regions falls under “stars” as seen in their high proceeds and market share. An example of a developed country that fits such a description is the US whose rewards would be a “cash cow” if the market share were kept.

Cows are the developing countries, for example, Kenya that has a high market share based on the technologically perceptive persons; however, the income is low meaning that Haier has to reduce investments. Dogs are the emerging economies where the need for electrical items is still low especially in regions where distribution is hindered by distance and distribution costs. Haier is yet to access such markets as seen in war torn regions such as Sudan and Afghanistan. Question marks in the strategy are regions with high growth and reduced market share.

Indeed, Haier accesses such markets through its extended subsidiaries as evident in Philippines; however, such markets are unviable meaning that it would be appropriate to sell the commodities and close shop. Based on Porter’s analysis, Haier’s strength include a huge market, reputation of the brand and innovation. Internal weaknesses are notable in ineffective marketing and advertising, the human management ineffectiveness, lack of core technology and inadequate competition in the high-end market.

External threats include economic downturn, growing competition and strong rivals, increasing prices and the constantly changing customer needs. External opportunities for the company include a global economic integration, potential for increased domestic sales and the development of green products. Analysis of Key success factor for Haier (what is essential for Haier in order to be successful) There are different factors that Haier should consider in ensuring success as a major firm in the market (Kynge, 1999).

Some of the customer concerns regarding electronics are some of the success factors necessary to Haier. Quality should be one of the considerations for Haier as it designs its products. An electronics customer needs their acquired items to be long lasting, serve the purpose successfully and efficiently. Haier in the local content has been known for having quality products, but in the global concept, it faces well-established companies associated with a certain standard of quality. The first step necessary for Haier is promoting a standard, which the market expects from it.

Issuing guarantees and service clinics could be one of the methods of setting up the platform for enhancing consumer quality. Budget is another concern for customers on a global scale. Most shoppers of electronics consider products within a given price range (Darwar & Frost, 1999). Some of the companies in the sector have succeeded due to the implementation of low and competitive prices based on the market. Functionality is a huge factor to consider in a competitive market. Today’s customer usually shops while considering the benefits.

By meeting the preliminary function and introducing several other functions at a price that is lesser than the fee of a device, the organization can capture the market (Gupta &