Studies on Enlightenment of China: Haier Group's Transnational Operations to Chinese Enterprise

By Wang, Yunfeng; Sun, Jing | Studies in Sociology of Science, June 1, 2012 | Go to article overview

Studies on Enlightenment of China: Haier Group's Transnational Operations to Chinese Enterprise


Wang, Yunfeng, Sun, Jing, Studies in Sociology of Science


1. HAIER GROUP INTRODUCTION

Haier is the world's fourth largest white goods manufacturers and is also the official home appliances sponsor of the Beijing 2008 Olympic Games. As of 2007, the Haier Group has established a total of 64 trading companies (19 located overseas), 29 manufacturing plants (24 overseas), 8 design centers (5 overseas) and 16 industrial parks (4 overseas). Consistent with Haier's position as a global brand, the company employs over 50,000 people around the world. In addition, Haier boasts a 58,800-strong sales network which last year accounted for a global turnover of 118 billion RMB (16.2 billion USD). Guided by the branding strategy of CEO Ruimin Zhang, Haier has advanced through the 'brand building,' 'diversification', and 'internationalization' stages, and since 2005 has embarked on the fourth stage: "Global Branding." Haier has enjoyed a growing international reputation over the past 24 years. 19 of the companies products, including refrigerators, air conditioners, washing machines, televisions, water heaters, personal computers, mobile phones, and kitchen appliances have been rated as "Top Brands" in China, and China's General Administration of Quality Supervision, Inspection and Quarantine has named Haier refrigerators and washing machines as among China's "Top Global Brands." In 2006, for the fourth consecutive year, Haier was ranked first in terms of overall leadership among mainland Chinese companies in the Wall Street Journal Asia's annual survey of Asia's 200 Most Admired Companies(YANG, 2004). In March 2008, the Financial Times once again added Haier to its list of Top 10 Chinese Global Brand Names with survey respondents ranking Haier number one in terms of product quality, trust, innovation, management, and branding. In May 2008, Haier ranked 13th on Forbes' Reputation Institute Global 200 list. As of June 2008, the company has been awarded 8333 patents, with 1996 for Haier design team inventions. In 2007 alone Haier obtained 875 patents; 502 were invention patents. Haier has participated in the institution and modification of nine international standards, as well as 152 national and 425 industry standards, with three international standards set to launch in the near future. Of all the Chinese household appliance companies, Haier by far leads the way in the creation of international, national, and industry standards. Haier management models such as "OEC," "market chain," and "Integration of Individuals and Goals" have been case studies at Harvard Business School, the University of Southern California; IMD in Lausanne, Switzerland; INSEAD in France, and Kobe University. Haier's "market chain" management model has been included in the European Union's case study library (LI & CAO, 1996).

2. THE NECESSARY OF HAIER TRANSNATIONAL OPERATIONS

2.1 China Joins World Trade Organization, the Enterprise Transnational Operations into Development Necessity

After China joins World Trade Organization, opening step to the outside world will speed further up, along with trade protectionism massive reductions and national treatment implementation, on the one hand, the foreign commodity and the service will be easier to push in the domestic market, on the other hand, the overseas large-scale international enterprise will increase to investment to China, further occupies the domestic market share. This will cause keener competition in the domestic commodity and the service market, causes the Domestic enterprise faced with the more difficult management aspect; it will force the enterprise to implement internationalization developmental strategy positively, participation international economy competition in broader spatial, gain scarce resources and market share (LUO, 2001). Haier develops the transnational operations under the background which the domestic electrical appliances profession rapidly expand, the domestic market competition are day by day intense, the price war occurs in the electrical appliances domain frequently. …

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