Talking about China's home-made brands going to international market, appliance-maker Haier Group is an pioneer and successful model one cannot miss.
The USA has General Electric; Germany, Mercedes-Benz; Japan, Toyota. Fast-growing China, the 'world's factory', however, has yet to produce a comparable global competitor.
But with more than $7 billion in annual sales and 13 overseas factories, including a South Carolina refrigerator plant and assembly lines in Italy, Pakistan and Iran, Haier is among the Chinese companies best-positioned to bid for global stature.
The sprawling combine makes everything from cell phones and air conditioners to microwave ovens and electric razors. Haier ranks fifth in global appliance sales behind General Electric, Whirlpool, Electrolux and Siemens.
In the USA, Haier sells room air conditioners and laundry machines, as well as a series of "wine coolers," compact refrigerators for aspiring sommeliers that retail from $599 to $3,660.
Handicapped by decades of self-imposed isolation, China was generations behind Western rivals when it initiated economic reforms in 1979. Now, Chinese producers are seeking to leverage their domination of the world's largest market into global advantage. For companies such as Haier, China's World Trade Organization membership, which means increased competition at home from foreign companies, is a further spur to look abroad.
From a near-dead local refrigerator maker in the early 1980s, Haier grew into a conglomerate with more than 30,000 employees and 86 products.
The company's success lies in its unique strategies, which blends that of ancient Chinese philosophers and Western management gurus.
Constant Innovation
Leafing through the chronology of Haier, it is not difficult for us to come to realize that Haier's innovation is, in essence, the constant innovation of concepts.
The innovation of qualitative concept and of market concept directly accelerates the implementation of "name brand strategy". In 1984, the employees' conception was to divide products into grade-1, grade-2 and grade-3 and off-grade products, so long as products could be used, they could be delivered out of the factory and absolutely could be sold out. But Haier warned: "faulty products are waste products", so it wielded an iron hammer to smash all the 76 qualitatively faulty refrigerators, thus further enhancing workers' quality conception.
"There is only slack season thinking, and no slack season market". Haier put forward a new market concept to sales clerks and all the employees.
In 1992, Haier which had devoted all its efforts to making refrigerators for seven years put forward its new viewpoint on expanding its scale: "after lighting up the east, then turn around to light up the west". After making refrigerator, then turn to produce the second and the third product, expanding the scale gradually. Developing in line with this train of thought, Haier, on the basis of refrigerator, freezer and air-conditioner, extended the production of washing machine and other products and marched toward the fields of "black household appliances" and cream-colored home appliances", finally forming the production capacity for 10,800 kinds of products in 69 categories.
Haier has a famous "sloping sphere theory": the position of an enterprise in the market is just like a round ball rolling forward on a slope, to prevent the ball (the enterprise) from sliding down, it is necessary to rely on two forces: one is braking force, to prevent the ball from sliding down the slope, it is necessary to have solid basic management expertise. The other is climbing force, i.e., innovation, continuing to allow the ball to roll up and to grow larger in the process.
As regards exploration of the international market, in 1990 Haier raised the slogan "creating new brands through exportation" and "taking up difficult things first and then the easy ones". Since 1998, this international strategic concept of Haier has helped accelerate the pace of Haier's entry into the European and American markets.
In the face of the general trend of international economic integration, Haier began the research on the "market chain", this represents another important management innovation of Haier.
The Group's leader Zhang Ruimin said Haier has properly made use of the resources that always put the enterprise in an advantageous position, adding that "just liking mountaineering, the higher position you reach, the larger is the danger. In this industry, the faster its development, you feel the less things you know. I will not retreat just because of the big risk, I don't think one can succeed in anything, I think one should, first, actively make progress; second, one should be cautious."
"Always trembling with fear, always treading as if on ice (be very careful)". That is Zhang Ruimin. That is Haier which is constantly growing in strength.
