Case analysis: Haier strategy in India
- Haier Strategy in India
- Case analysis
In 2004, Haier opened operations in India with the aim of accessing the country's large market, gain from India rapidly expanding economy and push by Chinese government's push for Chinese companies to become multinationals after China joined the World Trade Organization (WTO) in 2001.
The company's management also realized the despite the company's position as a global leader in electronics' manufacturing with over 25 years' experience and a global presence with marketing surveys touting them is the global leader in electronic appliance sales, they have not managed to make significant inroads into the rapidly expanding Indian economy which despite being Asian and sharing a common border with them practiced a different culture.
In recognition of this scenario, Haier launched in India in 2004 and appointed Banerjee T. K., an Indian National as its president for the country's operations. They adopted the three-in-one strategy that had been successfully adopted in other global markets like America and Europe.
[...] They adopted the three-in-one strategy that had been successfully adopted in other global markets like America and Europe. The first step of the strategy involved exportation with no fixed distributor. The second step introduced a centralized distributor. The third step saw the company set up a manufacturing plant in the country. Their market analysis determined that for Haier to break into the top three home appliances brands in India the company had to adopt a localization strategy and an aggressive marketing campaign. [...]
[...] Determining the sustainability of Haier's growth in India necessitates a market and situational analysis. A situational analysis of Haier's position in India shows that they; had a bad reputation as low quality electronics imitators whose only advantage was low product prices; cultural differences, most of India's population residing in rural areas meant that there was a cultural clash between the Chinese owned company and rural Indian market; high Indian government imposed tariffs on foreign owned business establishments that reduced profit margins, the company had to pay tariffs for all raw material purchases and even exports; and fierce competition from other appliances manufacturers with global presence like Samsung and LG companies. [...]