CST 617 / 618 Case Study (Business Strategy & Multicultural Approach)

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GENERAL INSTRUCTIONS

  • This Business Strategy & Multicultural Approach project must be done individually or groups of two (max).
  • This final case study must be submitted in softcopy only on the assigned due date to gbs@gmail.com
  • Hardcopy submissions will not be accepted

PRESENTATION OF FINAL ASSIGNMENT

  • You must include a title page that lists your name, Student ID and the unit number and title.
  • Number all pages sequentially.
  • Any published material you refer to must be properly referenced (Harvard Referencing) and included in a reference list at the end of your assignment.

FINAL CASE STUDY SUBMISSION DEADLINE

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 Weighing: 80% of total assessment

LATE ASSIGNMENT SUBMISSION POLICY

Any student submitting their assignments 2 days after the designated deadline will be considered as a Late Assignment Submission which will incur a penalty of CHF 100/SAR 380.

The penalty amount will be automatically added to your subsequent month’s Course Fee.

NOTE: The first page of each final case study must include the following declaration:

I certify that this assignment is my own work, based on my personal study and/or research, and that I have acknowledged all material and sources used in the preparation of this final case study whether they be books, articles, reports, lecture notes, any other kind of document, electronic or personal communication.

I also certify that the final case study has not previously been submitted for assessment in any other course or at any other time in this Course, unless by negotiation, and that I have not copied in part or whole or otherwise plagiarised the work of other students and/or persons. I have read the GBS policy on plagiarism and understand its implications.

Final case study that do not include the above declaration will not be marked.

PLAGIARISM

Plagiarism is a form of cheating, by representing someone else’s work as your own or using someone else’s work (another student or author) without acknowledging it with a reference. This is a serious breach of the Academic Regulations and will be dealt with accordingly.

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Plagiarism occurs whenever you do any of the following things without acknowledging the original source:

  • Copy information from any source (including the study guide, books, newspapers, the internet)
  • Use another person’s concepts or ideas
  • Summarize or paraphrase another person’s work.

How do I avoid plagiarism?

To ensure you are not plagiarizing, you must acknowledge with a reference whenever you:

  • use another person’s ideas, opinions or theory
  • include any statistics, graphs or images that have been compiled or created by another person or organization
  • paraphrase another’s written or spoken word

You are required to use the below mentioned referencing system:

The Harvard Referencing System; e.g. ‘Smith (1985) listed five key factors’

FINAL CASE STUDY

The Haier Group: U.S. Expansion

  1. CASE ABSTRACT

The Haier Group was a Chinese major home appliance and consumer electronics manufacturer with goals of becoming the third largest appliance maker in the world and being listed in the Fortune 500.  Haier had been founded in China in 1984 as a government-owned company to produce mainly household refrigerators. Over the past 20 years, the company had used horizontal integration and diversification to achieve significant growth in multiple product categories and geographic regions and by 2004 had become a global organization widely recognized in the world community.  Haier had achieved a  leadership position in China’s home appliance industry

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Haier’s initial stage of internationalization mainly focused on developing countries (first in Southeast Asia) to build volume and acquire international experience before it moved into the United States and then into Europe.  The Haier Group’s strategy has been to take advantage of its core competency in refrigeration and cooling  to make a strong move into the major home appliance industry by broadening its product line.  In 1999, Haier established a design center in Boston, a marketing center in New York, and a manufacturing facility in South Carolina. Its strategy of localizing everything from design and manufacturing to sales and distributions indicated that Haier had a strong long-term commitment in the United States. The main goal of Haier America was to continuously increase its sales in the U.S. and modify the company’s products to meet American demand.  It used its design competency to attack small market niches ignored by the major competitors and low cost advantage to compete in the mass home appliance market on the basis of low price coupled with comparable quality.  Haire America’s line of consumer electronics had no competitive advantage in the market.

Although Haier had a good reputation in major home appliances, the brand was still relatively new in the U.S. and had significant market shares only in refrigerators, freezers, room air conditioners, and wine coolers.  Its sales of consumer electronics were small, but growing.  The company faced a number of long-term decisions in order to build an American presence.  Some of these decisions were (1) how to integrate itself with the locality and build brand recognition, (2) how to create the products that could meet American needs, (3) how to achieve the cost control needed to maintain its price advantage, and (4) how to continuously improve its services to build the trust of local customers. The main problem to be resolved for Haier was how to differentiate itself from General Electric, Whirlpool, Maytag, and Electrolux in major home appliances and from Sony, Panasonic, Philips, and LG in consumer electronics and thus achieve a winning competitive advantage in the U.S. market.

The Haier Group was a Chinese major home appliance and consumer electronics manufacturer with goals of becoming the third largest appliance maker in the world and being listed in the Fortune 500.  Haier had been founded in China in 1984 as a government-owned company to produce mainly household refrigerators. Over the past 20 years, the company had used horizontal integration and diversification to achieve significant growth in multiple product categories and geographic regions and by 2004 had become a global organization widely recognized in the world community.  Haier had achieved a  leadership position in China’s home appliance industry

Haier’s initial stage of internationalization mainly focused on developing countries (first in Southeast Asia) to build volume and acquire international experience before it moved into the United States and then into Europe.  The Haier Group’s strategy has been to take advantage of its core competency in refrigeration and cooling  to make a strong move into the major home appliance industry by broadening its product line.  In 1999, Haier established a design center in Boston, a marketing center in New York, and a manufacturing facility in South Carolina. Its strategy of localizing everything from design and manufacturing to sales and distributions indicated that Haier had a strong long-term commitment in the United States. The main goal of Haier America was to continuously increase its sales in the U.S. and modify the company’s products to meet American demand.  It used its design competency to attack small market niches ignored by the major competitors and low cost advantage to compete in the mass home appliance market on the basis of low price coupled with comparable quality.  Haire America’s line of consumer electronics had no competitive advantage in the market.

Although Haier had a good reputation in major home appliances, the brand was still relatively new in the U.S. and had significant market shares only in refrigerators, freezers, room air conditioners, and wine coolers.  Its sales of consumer electronics were small, but growing.  The company faced a number of long-term decisions in order to build an American presence.  Some of these decisions were (1) how to integrate itself with the locality and build brand recognition, (2) how to create the products that could meet American needs, (3) how to achieve the cost control needed to maintain its price advantage, and (4) how to continuously improve its services to build the trust of local customers. The main problem to be resolved for Haier was how to differentiate itself from General Electric, Whirlpool, Maytag, and Electrolux in major home appliances and from Sony, Panasonic, Philips, and LG in consumer electronics and thus achieve a winning competitive advantage in the U.S. market.

Note: Please refer to the handout for full documentation of this case.

CASE OBJECTIVES

  1. To identify key success factors in two U.S. industries – major home appliances and consumer electronics.
  2. To discuss the international growth strategies that the Haier Group is using to become a global company.
  3. To analyze Haier America’s competitive strategy and competitive position in the U.S.
  4. To identify the impact of the Haier Group’s CEO upon corporate performance.
  5. To use portfolio analysis to analyze Haier America’s two businesses: home appliances and consumer electronics.
  6. To identify Haier America’s core and distinctive competencies.
  7. To evaluate Haier America’s use of manufacturing and marketing strategies to grow sales.
  8. To illustrate the importance of continual product and process design improvements as key to acquiring and maintaining competitive advantage.
  9. To compare the pros and cons of local versus internationally-sourced manufacturing and purchasing.
  10. To discuss the interrelationship between the parent Haier Group and its subsidiary, Haier America.
  11. To illustrate the use of niche marketing to obtain a foothold in a market before expanding into the main market.

 

DISCUSSION QUESTIONS

  1. What are the strengths and weaknesses of the Haier Group? Haier America?
  2. What are the opportunities and threats facing the Haier Group? Haier America?
  3. What are the strategic factors facing Haier America?
  4. Does the Haier Group have any core competencies? If yes, what are they? Which of these are held by Haier America?
  5. Does the Haier Group have a distinctive competency? If yes, what is it? Is it also held by Haier America?
  6. Discuss the role of international expansion for the Haier Group as a growth strategy. Which international entry strategies has Haier used and which are appropriate for continued growth?
  7. Discuss Porter’s industry analysis forces and how each force pertains to Haier America in terms of both major home appliances and consumer electronics. How competitive is each industry?
  8. Evaluate Haier’s position in major home appliances and in consumer electronics in the S.
  9. What was Zhang Ruimin’s philosophy of management? What impact has CEO Ruimin had upon the company?
  10. Explain why Haier has been so successful in entering the S. markets in major home appliances and in consumer electronics.
  11. Can Haier successfully move from being a niche marketer in the S. to being a major competitor like Whirlpool? What does it need to do?  Can it do the same thing in consumer electronics?
  12. Discuss the role of market segmentation in Haier America’s strategic management.
  13. Evaluate Haier’s position within the KSA Market and apply SWOT analysis of the company products in KSA.

Summarization of the Case Study (10 marks)

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Answering Questions from 1 to 13

  1. What are the strengths and weaknesses of the Haier Group? Haier America? (10 marks)
  2. What are the opportunities and threats facing the Haier Group? Haier America? (10 marks)
  3. What are the strategic factors facing Haier America? (10 marks)
  4. Does the Haier Group have any core competencies? If yes, what are they? Which of these are held by Haier America? (10 marks)
  5. Does the Haier Group have a distinctive competency? If yes, what is it? Is it also held by Haier America? (10 marks)
  6. Discuss the role of international expansion for the Haier Group as a growth strategy. Which international entry strategies has Haier used and which are appropriate for continued growth? (10 marks)
  7. Discuss Porter’s industry analysis forces and how each force pertains to Haier America in terms of both major home appliances and consumer electronics. How competitive is each industry? (10 marks)
  8. Evaluate Haier’s position in major home appliances and in consumer electronics in the U.S. (10 marks)
  9. What was Zhang Ruimin’s philosophy of management? What impact has CEO Ruimin had upon the company? (10 marks)
  10. Explain why Haier has been so successful in entering the S. markets in major home appliances and in consumer electronics. (10 marks)
  11. Can Haier successfully move from being a niche marketer in the S. to being a major competitor like Whirlpool? What does it need to do?  Can it do the same thing in consumer electronics? (10 marks)
  12. Discuss the role of market segmentation in Haier America’s strategic management. (10 marks)
  13. Evaluate Haier’s position within the KSA Market and apply SWOT analysis of the company products in KSA. (10 marks)

 

Conclusion and Recommendation (10 marks)

References of your Case Study (5 mark)

Citation:

Last page of your assignment must include the complete list of the references used during the completion of your assignment with all the details.

Format for referencing from print media like books:

FAMILY/SURNAME, Initials. (Publication year in brackets) Book title – italicised or underlined. Series title and volume if applicable. Edition – if not the first. Place of publication: publisher.

Example:

NEVILLE, C. (2010) The Complete Guide to Referencing and Avoiding Plagiarism. 2nd Ed. Maidenhead: Open University Press.

Format for referencing from electronic sources:

Author of website FAMILY/SURNAME, Initials or WEBSITE name if no author is available. (Year – in brackets) Title of website in italics or underlined. Any numbers if necessary or available if website is part of a series. [Online in square brackets] Available from: URL. [Accessed: followed by date in square brackets].

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Example:

BBC NEWS. (2008) Factory gloom worst since 1980. [Online] Available from: http://news.bbc.co.uk/1/hi/business/7681569.st m. [Accessed: 19th June 2012].

Report Format (5 marks)

Grading Rubric

Questions Marks

Allocated

Obtained Marks
1.      Summary of case in one page 10  
  1. What are the strengths and weaknesses of the Haier Group? Haier America?
10  
  1. What are the opportunities and threats facing the Haier Group? Haier America?
10  
  1. What are the strategic factors facing Haier America?
10  
  1. Does the Haier Group have any core competencies? If yes, what are they?  Which of these are held by Haier America?
10  
  1. Does the Haier Group have a distinctive competency? If yes, what is it?  Is it also held by Haier America?
10  
  1. Discuss the role of international expansion for the Haier Group as a growth strategy.  Which international entry strategies has Haier used and which are appropriate for continued growth?
10  
  1. Discuss Porter’s industry analysis forces and how each force pertains to Haier America in terms of both major home appliances and consumer electronics.  How competitive is each industry?
10  
  1. Evaluate Haier’s position in major home appliances and in consumer electronics in the U.S.
10  
  1. What was Zhang Ruimin’s philosophy of management?  What impact has CEO Ruimin had upon the company?
10  
  1. Explain why Haier has been so successful in entering the U.S. markets in major home appliances and in consumer electronics.
10  
  1. Can Haier successfully move from being a niche marketer in the U.S. to being a major competitor like Whirlpool?  What does it need to do?  Can it do the same thing in consumer electronics?
10  
  1. Discuss the role of market segmentation in Haier America’s strategic management. (10 marks)

 

10  
  1. Evaluate Haier’s position within the KSA Market and apply SWOT analysis of the company products in KSA. (10 marks)
10  
Conclusion and Recommendation 10  
Harvard style of References 5  
Report Format

 

5  
Total 160