Areas to improve in Haier management system, how it can be done and its benefit to the organization.
Haier Management: Lower prices
Haier management should improve on expanding its market share in the industry of home appliances in the US. To achieve this, Haier should reduce the prices of its products. Though most US customers expect products from China to be cheaper, Haier maintains its US price level as it has done in China. Haier maintained its price level in the US because it was riding on the notion of high-quality products. Nevertheless, Haier’s ambiguity of its pricing and quality was a problem (Lau & Han, 2012).
Haier can reduce its prices by mitigating its costs by focusing only on profitable products and trim down redundant niche product lines. The company diversification has led to the high cost, and focusing on manufacturing one product line can lower manufacturing costs. The organization can benefit from this move by attracting sophisticated customers who will boost the company’s revenue.
Haeir Management: Mergers and Acquisition (M&A) of renowned brands
Since Haier is stuck in the middle, it can redeem itself through M&A of renowned brands. Currently, Haier has failed in its acquisition initiatives. For instance, Haier withdrew from its acquisition of Maytag, which Whirpool acquired to become one of the renowned appliances makers. Haier also tried to acquire General Electric (GE) but failed (Lau & Han, 2012). General Electric is currently a very successful company and is among the top 20 most profitable US companies. If Haier succeeds in acquiring GE, Haier will save effort and time in increasing its market share in the US and reduce its operation process. M&A will have various benefits to Haier.
For instance, Haier will take over an existing customer base and income cash flow. It will be possible to make sales projections with the already available sales records. Haier will acquire knowledgeable and skillful managers, brand image, and operational know-how. Haier will also offset the massive brand images associated with Chinese firms in the US market. In general, Haier will have increased profits due to the expanded market share.
Shifting from CSR to CSV
Companies have increasingly focused on producing green products due to the elevated issue of global warming and climate change. Green products refer to energy-efficient production and eco-friendly materials that do not have pollutant elements. Haier focuses on public charities in its CSR as is the mission of the Haeir management and undertakes Green Sail, sports, and education (Lau & Han, 2012). However, Haier management should be involved in protecting and sustaining the Earth in what is referred to as creating shared value (CSV) through eco-innovation.
The firm should concentrate on sustainable environmental products and investing in research and development to develop more eco-friendly technologies. The technology will save energy and differentiate products to suit local consumers. Hence, Haier will attract sophisticated consumers in the US and form a global eco-friendly brand image. In the Haier management system, if you want to build confidence in others, you yourself must be confident. Why did I have faith that the factory would prosper? The straightforward answer is that I knew it was just about to install a new production line that would improve quality and efficiency.
Differentiation to consider price-sensitive customers
Haier should introduce a new product in the US market with distinct features to a wide range of consumers sensitive to prices (Lau & Han, 2012). These products will match well with Middle-aged consumers. The company should also consider the old customers who prefer well-known brands and care about the services and warrants of the company’s products but are also price-sensitive, and hence they may try new products. This strategy will be beneficial to Haier because it will increase its brand loyalty.
Lau, A., & Han, J. (2012). Haier: Management Control on a Tactical LeveL. Asia Case Research Centre
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