Haier Hafei Electronics Co. (A)
- Organizational Strategy
The first organizational strategy of Haier Hafei to be realized can be the acquisitions. The company always acquired companies and plants as discussed in the case. For example, they had acquired the Haier Hafei plant from the Hafei municipal government.
Another organizational strategy of Haier is the strategic partnerships. By using the strategic partnerships strategy with the acquisitions strategy, the firm had diversified beyond refrigerators into freezers, washing machines, air conditioners, color televisions, and other household appliances.
Next, Haier's shares had been traded on the Shanghai stock exchange since 1993 which can also be regarded as an organizational strategy.
Then,. Haier uses the strategy of product diversification and expansion into foreign markets. In my opinion, the firm was implementing this organizational strategy to spread the risk.
After that, Haier was in favor of a strategy based on building high quality products and providing reliable service. For the company, competing on price was a losing tactic in the long-term. Thus, while reading the case, we were able to see that Haier's prices were always higher than its competitors. Despite this, the company was still very successful and profitable. So, we can easily say that this strategy had worked.
Following that, brand loyalty was another Haier organizational strategy. Indeed, that was the reason why the company focused so much on producing high quality products and providing reliable service.
Furthermore, the management style of Haier can be included the list of organizational strategies. Concerning this point, one group of managers handled business strategy and day-to-day operations and the other group handled personnel issues and monitored the company from a political point of view. Another component of Haier's management style was the managerial independence that is related with this issue. More importantly, Haier implemented the "5S Japanese management system"
Afterwards, Haier's culture was also a tool in terms of organizational strategy. The corporate culture intended to motivate the employees and set high standards for them to create a more successful business. Personal responsibility, excellence in providing goods and services and paying great attention to customer preferences were the other parts of Haier culture. Haier had even established the Enterprise Culture Center for that strategy and also, when new employees were hired, they were trained about the corporate culture. On the other hand, in my opinion, Haier's culture was not perfect. Because, for example, poor performing workers had to stand on a painted spot to acknowledge and explain their failings to their assembled colleagues. Also, some employees who violated Haier's code and involved in other unwanted activities were announced in the company newsletters and bulletin boards.
Moreover, Haier practiced the Japanese Total Quality Management (TQM) in its early times and developed its own management method better suited to its situation.
Besides, the company used "flexibility" as a part of their organizational strategy. That way, when the problems arose, they were able to solve these problems quickly. So, they minimized their costs and prevented unnecessary waste.
Thereafter, workforce restructuring and specialized training can be discussed as organizational strategies. For example, Haier used specialized training and workforce restructuring for company promotions.
Also, the communication between the managers and the supervisors was strong. As an example, every morning managers and supervisors met 20 minutes before the start of work to discuss work-related issues such as communications, production, current problems and other day-to-day concerns. Thus, the company meetings was another organizational strategy.
Then, the company always tried to keep good relations with its suppliers and implement production planning. In this context, they were very careful about obtaining good quality raw materials.
- International Strategy
One of the international strategies of Haier is its strong distribution system. The case says that Haier's distribution system included a network of 49 dealers in 87 countries
Secondly, the "three-thirds focus" strategy implemented by Zhang Ruimin was another Heier international strategy. According to this strategy, Haier's business was divided equally among sales in the domestic market, exports, and sales generated by overseas manufacturing facilities.
Thirdly, Haier had quality partnerships with some international companies as a part of their international strategy. On this issue, they were receiving new product design, valuable knowledge and skills from there international firms and using them for several years. For example, two of these companies were Matsushita (Japan) and Merloni (Italy). Haier used to observe and digest the new methods and then imitated them for independent design.
Fourthly, the business had technology agreements with a few international firms. For instance, their technology agreement with Liebherr-Haushaltsgerate was an example for that.
Next, Haier pursued and won international certifications for reliability and qulity, including the ISO 9001 and other benchmarks which should be mentioned as another international strategy of the firm.
After that, Haier was also noted to implement the joint venture partnerships strategy. As an example, Haier-Mitsubishi air conditioning joint venture can be indicated related to this issue.