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Marketing Strategies For Emerging Markets - Haier Case Study - Shivani Khare - 21020037 - MBA 2021

Haier began globalizing in the early 1990s by focusing first on developed markets like the US and Europe. This allowed them to meet high quality standards before expanding to other markets. Haier hired experienced managers from major brands and utilized design centers to customize products for customers worldwide. While an expensive strategy, entering developed markets first helped Haier avoid high failure rates when competing in overcrowded emerging markets without established quality standards. Haier's "Three Thirds" strategy aims to maintain control of the Chinese market while using OEM exports and localized production in developed countries to become a leading global high-end brand.

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126 views3 pages

Marketing Strategies For Emerging Markets - Haier Case Study - Shivani Khare - 21020037 - MBA 2021

Haier began globalizing in the early 1990s by focusing first on developed markets like the US and Europe. This allowed them to meet high quality standards before expanding to other markets. Haier hired experienced managers from major brands and utilized design centers to customize products for customers worldwide. While an expensive strategy, entering developed markets first helped Haier avoid high failure rates when competing in overcrowded emerging markets without established quality standards. Haier's "Three Thirds" strategy aims to maintain control of the Chinese market while using OEM exports and localized production in developed countries to become a leading global high-end brand.

Uploaded by

shivani khare
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Marketing Strategies for Emerging Markets

Case Study:
Haier – Taking a Chinese Company Global

Submitted by-
Shivani Khare
21020037
MBA 2021
 Was Haier’s strategy to globalize into developed markets early on a
good strategy?
Ans:  Haier began to recognize in the early 1990s that in order to keep growing, it would
have to take its operations outside, into both developed and developing nations.
 The US and European markets came first because Haier wanted to concentrate on the
challenging markets with difficult requirements so that they could maintain the highest
levels of quality.
 Haier gathers experienced professionals who have previously worked for leading
companies. When entering into a developing market, top brands usually hire a local who
has never worked for a major brand.
 By paying attention to details and utilising their eight design centres, Haier was also able
to quickly alter their designs to meet the needs of every worldwide customer.

 Emerging market companies must be particularly careful with their strategy, since the
failure rate will be very high if they attempt to compete in an already overcrowded market
without having the same high standards of quality as Europe and the US. However,
employing top managers could be expensive.

 Can Haier build on its success in Niche products to become a dominant


global brand in high-end white goods?

Ans:  Yes Haier can successfully defend against Chinese and multinational challengers in
china, due to their experience and huge market share in China.
 They also have a good portfolio of different products in which they are the segment
leaders.
 Because of the experience and well-developed distribution channels of Haier.
 Able to meet differentiated customer needs– Introduction of customers demand specific
models like tiny washing machines, potato washing features.
 Excellent after sales service
 Efficient distribution system - Just in time (JIT) purchasing, raw material delivery &
product distribution.

 Logistics cost – High Scale and volume, with common logistics company for all product
lines helped them to reduce the cost.

 Less staffing cost compared to multi-national companies


 Is Haier’s “Three thirds” strategy a viable or wise approach?

Ans:  In 1997, Haier had announced their “Three thirds” global strategy.
 First, they need to keep the Chinese market under control as they go global because
global competitors are coming.

 Then, the OEM or brand export to overseas market is an efficient way to utilize the
advantage of cost or labour. However, they need to become a dominant brand in developed
markets in high-end products first.

 Finally, producing in developed countries brings a high cost of labour factor that can be
overridden if the production is focused on the high-end manufacturing.

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