Since its founding in 1984, Haier has adhered to the unique win-win management model of “Integrating Order and Personnel” during each of its disruptive innovations and radical changes, releasing the vigor and creativity of people in a real sense.
Committed to self-renewal, Haier has gone through stages of brand building strategy, diversification strategy, internationalization strategy, global branding strategy and networking strategy. In the era of the Internet of Things, Haier continues to be a front runner in the industry by creating lifestyle-based ecological brands with its “smart home” approach.
Different Development Stages of Haier
The Stage of Brand Building Strategy
In 1985 when the reform and opening up was initially launched, there was a huge market demand for refrigerators. Many manufacturers then only paid attention to the quantity rather than the quality. Haier was the first to set the business goal of supplying “zero defect” products. Mr. Zhang Ruimin, the founder of Haier, “smashed defective refrigerators”, which became a hit topic of the time, and the event was filmed as The CEO. A few years later, the refrigerator industry was challenged by overcapacity, but Haier products were still well received by the market despite a price rise. In four years, Haier won the National Quality Award (the highest award) as well as the honor of the Top Ten Well-known Trademarks in China. Haier changed the traditional concept of quality in people’s mind and improved employees’ professional level of quality management, thus creating the first famous Chinese brand in the refrigerator industry with excellent quality.
The Stage of Diversification Strategy
In 1991, by the opportunity brought by the “Southern Tour Speeches” of Comrade Deng Xiaoping, Haier embarked on the road of diversified operation. Amidst doubts from the public opinion and industry, Haier merged 18 loss-making home appliance companies, expanding its refrigerator-based product line to a diversified array of products, including washing machines, air conditioners, water heaters and other home appliances. By the time when many other home appliance companies began their diversified operations, Haier had taken the lead for ten years, which established Haier’s leadership position in Chinese home appliance industry.
Haier's diversified management does not rely on investment in capital and technology but is revitalized by the roots of Haier culture and management concepts. Use intangible assets to revitalize tangible assets and activate “shock fish” with Haier culture. This history has also become a world-class classic business case selected for the Harvard case library.
The Stage of Internationalization Strategy
At the end of 1990s, after China's entry into WTO, many Chinese enterprises were hindered from expanding their markets overseas and turned to OEM. Zhang Ruimin, the founder of Haier, put forward the idea of "creating a brand by exporting", "first difficult, then easy". Haier started overseas business development, invested in the construction of factories, and took the lead in the developed countries to create its own famous brand.
In 1999, Haier set up its first overseas industrial park in the United States. At that time, the huge investment was questioned by the media and public opinion. But from today's point of view, it is a highly forward-looking and far-sighted decision. It is the establishment of American factories that laid the foundation for Haier's stable foothold in the United States market. Later, in order to thank Haier for its great contribution, the local government of the United States named a "Haier Road", which is the only road in the United States named after a Chinese brand. Since then, Haier has gained international fame with its high quality products, and Haier has become the leader of Chinese brands on the world stage.
The Stage of Global Branding Strategy
Since 2005, Haier has entered the stage of global branding strategy and adhered to the development philosophy of “localized design, localized manufacturing and localized marketing”. In 2012, Haier acquired Sanyo Electric’s multiple businesses including washing machines and refrigerators in Japan and Southeast Asia. After that, Haier successfully acquired New Zealand’s high-end home appliance brand Fisher & Paykel. On January 15, 2016, Haier and GE strategically collaborated to integrate GE’s home appliance business, forming a new alliance model for large companies to do business out of prices system. The Wall Street Journal described Haier as creating a “Chinese surprise”.
By 2018, Haier has established 10 R&D bases, 24 industrial parks, 108 manufacturing centers, 66 marketing centers and 143,330 distribution networks around the world. With more than 60,000 employees worldwide, Haier has jumped to be the world’s number one home appliance brand.
The Stage of Networking Strategy
In 2012, Haier proposed a networking strategy. Haier transformed from a traditional home appliance company to an Internet company, turning its traditional business organization into an open ecological platform. The relationship between the company and the upstream and downstream industry chain has changed from one based on zero-sum game to one featuring a benefit-sharing community. The huge business organization of Haier has become nodes in a network platform. The parties in the platform share values and achieve win-win benefits in a self-organizing and self-driven manner. All stakeholders including employees, user and social entrepreneurship teams can participate in the entire process of design and creation, and leverage the resources of Haier platform flexibly and efficiently. Haier broke the organizational structure based on bureaucracy and turned it into a pattern composed of various entrepreneurial teams that are directly responsible for users. In this way, staff members have turned into creators from employees and executors, and a “enterprise pay” system turns into a “user pay” system, which not only stimulates the initiative and leading spirit of employees, but also helps them realize self-worth while creating values for users.
