1. Title:
The analysis and through some information of strategy development plans in China and USA market to explain Haier how to use globalisation strategy development in Brazil.
2. Background:
Haier was established in Qingdao of China in 1984, and it has 29 history of development. Haier adhering to user needs as the center of the innovation system to drive enterprise sustainable and healthy development, and now it has been the largest household electrical appliances manufactures in the world. Moreover, Haier Group’s global turnover of 170 billion yuan in 2013, there are more than 70 thousand employees worldwide in 17 countries, and its users are covering 100 countries and regions of the world. Zhang Ruimin is CEO in Haier Group, and Haier has a process of development which is brand building, diversification and globalization. Haier has 18 productions such as washing machines and air conditioners which are ranked first in China. Lastly, in April 1999, Haier invested 30 million dollars to established the Haier Industrial Park in South Carolina of United States, and the industrial Park was completed and commissioned in 2000. Haier bought midtown Greenwich Bank Building as the north American headquarters in New York in 2002. This is a decided to implement a measure localized Haier brand, represents its commitment to the U.S. market. (Xu, 2010).
Haier is a famous brand in China, and it is the first brand enter the foreign market. Haier has large change from failing company to the top of white goods brand, its process of development bring some important influence to many companies. For example, every company should implement the strategy of famous brand, because many customer think famous brand can give them more high quality productions and service, and the company can get high profits and awareness. Haier strategy is an important role to be used in other company in Chinese market. Now the single unity mode is most popular develop way in many company, and it was used in some universities as Harvard University.
Brazil has 201 million people, its GDP achieve about 22403 billion dollars, and the GDP per person is more than 11 thousanddollars. Brazil is one of the BARICS countries, it is also members of the union of South American nations. It is the 6th largest economy and the strongest countries in South American. So Brazil is the important market, if Haier can enter its market, it will get the whole South American market. (Liu, 2014).
3. Preliminary Review of the Literature:
Research objective is one of the concepts of the literature review that is a significant part for researching globalisation strategy develop about Haier Group in Brazil and getting some important strategy information through strategy development in China and USA . There are three parts which will be described.
3.1. Strategy development in China
China has a widely business market, because there are a large number of population and high consumption level. There are many enterprises which want to develop fast and own widely market in China. Haier made two strategies for developing quickly and adapting China market.
3.1.1. Brand strategy
Haier made brand strategy stage in 1984. Zhang think that brand is intangible assets which can bring premium and produce value-added. Brand refers to the consumer’s perception of produces and product series. (2011: 82). Moreover, brand is also an evaluation, cognition and trust way about products, service and culture in an enterprise. A good brand image can get good awareness and loyalty.
Haier want to build brand in order to improve the brand awareness. Haier just produces one produce which is the refrigerator in 1984, and it wants obtain rich management experiences for owning stable basis and summarize a good management model. In 1984, Haier was management confusion, and no superior products. If it wants to get out of this situation, it must be have a high starting point to infuse hope of survival. The external environment was appearing many refrigerator factories, but there is no brand factory. So Haier decided to introduce the most advanced refrigerator production technology of the world to production of the world-class refrigerator and become a Chinese famous brand. In 1988, Haier obtained the national quality gold medal which is the first refrigerator medal in Chinese history, and the brand strategy was initial success. (2011: 84).
3.1.2. Diversification strategy
Poole defined that diversification is an invest strategy designed to reduce the risk by combining a number of investments, for example, bonds, stocks, and real estate, which are not moving in the same direction. The goal of diversification is to drop the risk about portfolio. Volatility is limited, because the value is not all asset classes or industries or individual companies move up and down at the same time or at the same rate.
Diversification can reduces the potential for upside and downside and allows consistent performance under a wide range of economic conditions.
(2001: 137). A new company always own a single production and service, so its development is very different. However, diversification can be used for developing many products and service. In addition, an enterprise produces many different style production for meeting customer needs and attracting a number of customer.
Kazanas and Rothwell defined that diversification strategy is relatively enterprise specialized management is concerned, its contents include: product diversification, market diversification, the diversification of investment region and the diversification of capital.(2003: Enterprise: always adopts diversification strategy, because it can occupy the market and open up new market, and it can also avoid the risk of single operation.
For example, the diversity of the market refers to the enterprise products in more than one market, it includes the domestic market, international regional markets and the global market.
Haier Group used the diversification strategy from 1992 to 1998, and its character that is one product to multiple product development. If a company want to be stronger, it must win the competition by relying on internationalization, and internationalization must diversify. The home appliance is divided into three categories in the foreign market, and it includes white goods, black appliances and beige appliances. White goods means that the product can replace people housework. Black home appliances can provide entertainment such as TV and acoustics. Beige appliances refers to computer information products. Haier produces the refrigerator about 7 years which is from 1984 to 1991, and then it entered the field of white goods freezer, air conditioners and washing machines. In 1997, Haier entered the black goods appliances and the computer industry. (Liu, 2008).
3.2. Strategy development in USA
Since China’s reform and opening up, its economic rapidly development, the domestic market of the electrical industry gradually formed a glut of buyer’s market pattern. In addition, the foreign products influx the domestic market through various channels, the domestic market shows saturation, and companies competitive was drastic for realizing the value of the product. On the other hand, The United States is a very attractive market, and it is the world economic power. The total population of 292 million, and the GDP of $11.6675 trillion in 2004. American need high quality product, their purchasing power is strong, and they have stronger willingness to buy the product. American huge market potential attracts Haier to enter.
Moreover, China government encourage enterprises to go abroad, and the government also provides a series of preferential policies for export enterprises. (Schultz and Kurian, 1998)
3.2.1. Brand strategy:
Brand strategy is also important way in United States. Haier had the important goal which is creating an internationally competitive international brand in United States. Therefore promote Haier brand is an important task. Same time the brand long-term development strategy and the whole international strategy are crucial. Haier must develop its brand in the United States market, and then it will develop in the developing countries markets.
Haier chose the competitive product which is small refrigerator. It thinks quality is the life of the enterprise, it must provide high quality and low price products to the customer, and then it will own widely market or create well-known trademark. Haier just produce small refrigerator in 1996, and it will be quickly recognized by consumer. Then Haier will enlarge the goal to develop widely market. Now Haier produces different products such as washing machine and flat-screen televisions. Because the small refrigerator was successfully of sale, other products gradually open market in the Untied States. Moreover, Haier stepped up propaganda with a number of new advertising media which includes car commercial and TV, because it want to improve the awareness by customer. (Wang, 2009).
3.3. Globalisation strategy
Rick thinks glabalisation strategy is that also called the global strategy, some multinational companies want to enlarge the market in other countries, they will comparative advantages of different countries and regions, and every parts and function will be dispersed and configuration, efforts to reduce production costs, in order to achieve long-term, stable global competitive advantage, and maximize the global efficiency. (2010).
Globalisation is that a company or organisation plan wants to develop quickly and improve power in the global, and the aim is earning the largest profit and getting the highest reputation. For example, everybody knows Coca cola and BMW are strong globalisation companies.
Haier is the first enter foreign enterprise in China. In 2006, Haier implemented globalisation strategy, and it built local brand for getting large market. Now Haier establish the localisation of design centre, manufacturing base and trading company in the more than 30 countries. America is the first entered countries in the world, Haier used local culture and characteristic to built unique brand features. However, every country has different culture and characteristic, the globalisation strategy is not easy about Haier Group, and it is also long-term develop plan, so it becomes my research target which is how to use globalisation strategy in Brazil.
4. Research Questions and Objectives.
4.1. Research Questions
How to use the Globalisation strategy development in Haier Group in Brazil?
The research question on the following has been developed which relate to the objectives of the present study.
1. What is strategy development in Haier Group in China?
2. What is strategy development in Haier Group in USA?
3. How make a reasonable strategy to develop Haier Group in Brazil?
The purpose of the study is to explain how development Haier Group in Brazil through assess the strategy development in China and USA, and assess the impact of strategy development.
1. To critically evaluate the strategy development in Chinese market.
2. To critically evaluate the strategy development in American market.
3. To explain how development Haier Group in Brazil.
5. Methodology and research methods.
5.1. Research strategy and underpinning philosophy
Stevens thinks thatPhilosophy is theorized, systematic view of the world, it is also generalization and summarization of the natural knowledge, social knowledge, thinking knowledge, and it is the unity of the world outlook and methodology.( 2011: 291). Research philosophy is that some people or company uses philosophy to analysis and research things for easing know. The research will be defined through qualitative and quantitative ways, and positivism and interpretivism will be used in this research philosophy. On the other hand, the basic features of positivism is that will be the task of philosophy attributed to research, the phenomenon theory point of view as a starting point, it refused to grasp the rational sense materials, and it think through conclude to get science law. It deal with the relationship between philosophy and science as the core of its theory and tries to dissolve philosophy in science. The method can help us to rational analysis things, and then accurately prove the true of things.
5.2. Research design
Maxwell thinks that research design is doing a series of action to achieve a certain goal in a large process. First of all, to accord to the design problems to formulate some corresponding solutions, and to accord to the development of the situation and change to develop the new plan in the process of implementing the final plan, or to accord to the development of the situation and change to select the corresponding solution and achieve their goals. (2013: 18).
5.3. Data collection methods
Data collection methods are effectively collect data accurately, In the study of psychology, the data collection methods includes observation method, interview method, questionnaire method, test method, semantic analysis and content analysis. It is a field of psychological research, psychology research is often used these methods in the school, especially the observation method, interview method, questionnaire method, test method and case studies.(Powar, 2004). The dissertation will use observation and online interviews to find some useful information about Haier strategy development methods, and explain the difference and similar of strategy development in China and USA. Primary data is original research data in its original state, without any analysis or processing. These data can provide important information to researchers. For example, workers want to work, they must obtain original information of work, so they can do better. In the research, primary data can be getting through literal data and oral information such as books and works. The research will be used literal data and oral information, because there are many books about research Haier Group information in China, and i can find employees of Haier to collect some significant data. The two ways are so quickly and efficient for knowing Haier Group.
5.4. Data analysis:
Silverman thinks qualitative research method is based on social phenomenon or things with the attribute and contradictions in the movement of change, and it is a way or angle of research thing from the inherent regularity of things. The analysis is from the interview data.(2011: 3). The final step is data analysis, the collect data will be classification and summary, and ensure veracity of research data. In addition, the statistic analysis techniques are used for analysing collected data, and they will be analysis through SPSS software.A summaries of the approach are on the following table:
Data Gathering Activity Details of Sample Method of Data Analysis Which Research Objective This Data Informs.
Primary research which is online interviews Convenience sampling Qualitative analysis To critically evaluate the difference and similar of strategy development in China and USA.
Primary Data To find some information about Haier Group.
To know strategy development way in Haier Group To find some useful information to present finding To ensure the strategy development way in
Haier Group in Brazil..
6. Ethical Considerations
Lo believes that Ethical considerations is ethical principles, and it will be used for solve a difficult problem. Ethics rules are managing some
practices of a profession. It helps the customer and manager to build a good relationship. Ethical considerations can help us to use rules better and
serve customer. (2005: 28). The research ethics permission has been given in writing through the company to undertake this research. I will be
anonymised and cannot identify some information. What’s more, I cannot use employees’ personal information of Haier Group such as name and address in
the research proposal, and some respondents will be told the interview is secret and optional.
7. Planning and any special resources required
Gantt chart can shows some important information about doing the research proposal, and the time will shows some different research ways.
Time NOV DEC JAU FEB MAR APR MAY JUN JUL AUG SEP OCB
Find topic
White proposal
Review secondary data
Whiting draft
Review research proposal
Final research