Haier: pioneering the Chinese export brand

Abstract

China is the focus for many cost leadership strategies. The potential for exporting from China is enormous, as the rapid growth in exports since 1978 has shown. This potential is largely based on the vast supply of cheap but often skilled labour in China. It is frequently argued that China can become the manufacturing base for the rest of the world. However, it is difficult for an enterprise to make a strategy solely on this basis; any competitive advantage based solely on cost can only be temporary.

We work in a mixed economy. You have to have three eyes: one for the market, one on the workers, and one on policy.

Zhang Riumin, CEO of Haier

We have a broad product line with a wide price range. We need lower price models for price-only stores that sell commodity goods. We need higher price models for stores that will display our products and have salespeople on the floor. We promote Haier as a global brand — not Chinese or American, but global.

I saw opportunity in the Haier brand. The appliance market is old and has a lot of hang ups like product recalls. Here was a new brand of good products with no baggage and the chance to develop its own Image. I believed in the Haier Brand.

Mike Jemal, president of Haier America

Given China’s vast geography, disparate market, and multiplicity of national and local authorities, Haier has dealt with many of the problems of globalization without leaving home.

Marshall Meyer, Wharton School of Business

We have a dream. China should have world-known brands of her own … letting the people of China hold their heads high in the world.

Poster at Haier’s headquarters