Dynamics of Strategy - Haier Case Study Essay
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Word count: 3294
Table of contents 1. Summary 3 2. Haier's strategy analysis (Part A) 4 2.1 Haier's strategy overview 4 2.2 Macroenvironment analysis 5 2.3 Industry analysis 6 2.3.1 Key points of the industry analysis 8 2.4 Industry key success factors (KSFs) 9 2.5 Internal analysis 10 2.6 Points on KSFs and internal analysis 14 2.7 Dynamic context 14 2.8 Purpose and stakeholders perspective 15 3. Recommendations (Part B) 17 4. Appendices 20 5. References 23 6. Assignment instructions 25
This report provides an in-depth analysis of the strategic steps taken in Haier India using the B835 module frameworks.
The …show more content…
Although assumption is Haier categorised to be in the "household appliance manufacturing" industry (Investopedia), the industry boundary is blurred; e.g. when new product lines introduced post 2009 are looked at, such as laptops and cameras (evidence: Appendix I). This is the impact of product & process innovation (Unit 2.4). Companies that sell laptops and cameras are categorised under retail, e.g. PC World (Wikipedia); or consumer electronics, e.g. Apple (Wikipedia).
Effect of Five forces on Haier is shown on diagram below:
Key points of the industry analysis
The Korean LG brand being the market leader in 2004, amassing 33% of the washing machine market (evidence Appendix J), the industry is concentrated. Looking at the market share provided in case study Exhibit 7 (screenshot below), the industry is oligopoly (Grant, 2010, p69).
The analysis indicates exit and entry barriers are low, although Haier is impacted from same threat of lack of suitable road infrastructure. The incumbent firms (LG, Samsung, Whirlpool) have advantages of economies of scale (control 59% of washing machine market; 41% of TV by LG & Samsung - Exhibit 7) and