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Midea Electronics - Essay Example

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Midea is one of the key players among the home appliance manufacturers in

China, with manufacturing facilities at Shunde, Guangdong, the southern Chinese

province bordering Hong Kong.
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Midea Electronics
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Download file to see previous pages Midea attained RMB8 billion revenue for

fiscal year 1999 and has set a sales objective of RMB38.6 billion by year 2005.

Although Midea has a leading position in air conditioner exports from China and

shown a continuous growth in domestic and international market yet with globalization

and rapidly changing business scenario, Midea is facing a number of challenges both in

domestic and international market. As for major appliances manufacturers are concerned,

Asia, and in particular China seems to be with the most potential growth market and

hence they are aggressively investing in Chinese domestic market. Almost all major

appliances manufacturers are present in the Chinese market either by setting their

manufacturing facilities or by establishing the off shore base centers. Compared to these

major players, Midea lacks its presence in international market with its brand name and it

has to solely rely on its importers brand name. It does not have a well defined global

marketing strategy and a more geographical diversified presence with better marketing

skills and dedicated international sales and distribution networks.

Also major international players like LG (with 74% revenue from international

market), Samsung Electronic (66%), Mitsubishi (51% by 2001), Fedders (50%), Carrier

(48%) and Sharp and Whirlpool (each with 46%) have immense financial resources with

latest technology and state-of-the-art innovation research centers while Midea only

generates 10% of its revenue from international market and has limited financial

resources, with traditional technology.

Also major international players like LG (with 74% revenue from international
market), Samsung Electronic (66%), Mitsubishi (51% by 2001), Fedders (50%), Carrier
(48%) and Sharp and Whirlpool (each with 46%) have immense financial resources with
latest technology and state-of-the-art innovation research centers while Midea only
generates 10% of its revenue from international market and has limited financial
resources, with traditional technology. Moreover the scenario will become more intensive
and competitive with the China's imminent entry into World Trade organization (WTO).
These are really major concerns to Midea's management team.
As in changing global business scenario, any competition can not be viewed as
solely domestic and every organization have to defend its position and have to play a
double edge knife role to compete both at domestic and global level. For long term
business viewpoint Midea too has to play the same role. Being a major domestic player it
has to defend its position in Chinese market and also has to show its presence in the
international arena. To achieve this Midea has to review its international business
strategy and to go for both branding and private label options.

In coming sections we will analyze the Midea's strengths and weaknesses relative
to domestic and international competitors. Also an assessment of relative attractiveness
of domestic and international markets for air conditioners is presented. Finally an
international business strategy is recommended to enter and capture market share.

Media Group: An Overview

Midea was established in April 1968, in Shunde, Guangdong, the southern
Chinese province bordering Hong ...Download file to see next pagesRead More
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