Haier Group is a successful multinational organization that began its business manufacturing refrigerators and later has expanded to areas such as household appliance, IT digital products, communication logistics, home furnishing, as well as real estate, finance, etc. (Haier, 2015). The strength of Haier is that it operates in the global market, as this increases organizational reputation and image. However, it does not mean that everything is perfect in Haier. There are a number of areas which are desired to be improved in the organization in order to achieve desired output. First of all, Haier should increase its brand awareness regularly. Secondly, it needs the changes in management and marketing making them more innovate, dynamic, and strategic. Therefore, this essay intends to analyze the peculiarities of the business of Haier, its strengths and weaknesses and reveal the ways of its improvements.
Transferring to Strategic Management
The early state of affairs of Haier was very miserable. However, Zhang Ruimin managed to overcome all obstacles making the company successful and profitable (Haier, 2015). However, the modern world of business is more severe and demands implementation of innovations and changes. Consequently, strategic management is a must for Haier in the current conditions. The traditional management cannot solve the spontaneous and unpredictable issues. As a result, strategic management will be the basement to build the company which will be more resistant to any obstacles. The dilemma of Haier was that it demonstrated the low performance and productivity that led to many issues. It means that Haier did not control their human resources in a proper way.
Haier’s study shows that it needs the sustainable development and growth that relies on the competitive advantage, creative projects, and strategic management. Additionally, the financial, physical, and human resources determine the sustainable growth of Haier (Lau, Han, & University of Hong Kong, 2007). However, human resources are the most crucial for this organization. As a result, one recommends motivating and encouraging employees to the higher productivity and performance (Ferrel & Hartline, 2010). One can achieve this using the reward system and training programs as the driving forces of motivation. As a result, employees can be the determinants of successful or unsuccessful transferring to strategic management of Haier.
Changes in Marketing Strategy
To improve Haier, one should change marketing strategy. It is obligatory to work on the creation and development of new products and improve already existing ones. Refrigerators are the key products. However, other home appliances should be also provided by the company. The aim of Haier is to develop, move forward and create goods that will be popular with customers. Moreover, it is obligatory for the company to follow an uncompromising quality. As Haier is a global brand, it is necessary to make marketing strategy an international one. High level of services is one of the key objectives. However, it does not mean that Haier is perfect in fulfilling this goal. As a result, one recommends the improvement of the quality aspect to avoid customers’ complaints and lawsuits.
Many world companies specialize in refrigerators and home appliances. Consequently, Haier needs their marketing hook for attracting customers. For example, having the days of reductions for the constant clients or providing gifts.
Haier is one of the brightest examples of successful management, strategic management, financial analysis, organization, and leadership and a good lesson for other companies. Additionally, the development of Haier demonstrates a well-prepared and properly implemented management strategy. Consequently, it is essential to make it more strategic, dynamic, and flexible. Entry strategy for international markets should include direct export, foreign direct investment, and joint venture or technical alliance (Scott, 2011).
Low-skilled and inexperienced employees are not typical for Haier. However, the company demands the development of human resources implementing the training and learning programs. Moreover, new marketing strategy should benefit the development of the distribution channels as this process is very complicated in China. Furthermore, Haier should motivate its employees to reach higher performance goals.
The weakness of the company is that they use cheap labor force. Furthermore, such economy can lead to the negative feedbacks and employees’ loss (Amato & Wilder, 2004). Consequently, Haier should suggest a flexible reward system and available promotion to increase the organizational performance and productivity. Multinational competitors of Haier have no such cheap staff. However, they have fewer problems related to the poor performance comparing with Haier.
Haier develops their production and achieves greater profits with the help of global marketing. As a result, the company should work under diversifying their markets, involving changes and innovations. They should widen the circle of consumers and satisfy customers’ needs. They should take into account geographic diversity. This marketing strategy takes into consideration peculiarities of climate, space and topography that influence the demand for their goods.
Reaching the target market is the key objective of Haier. Relationship marketing is not a less important goal. The company tries to create positive associations with their brands and provoke interest for their products. If they spend money on advertisement, with time, they will double their incomes. Increasing of sales is the next objective of sponsorship. It involves indirect actions as increasing of sales depends on the image of the company, its place on the market, and ability to compete, among many other issues. Haier should be oriented on the international market development. The company should follow a global strategy. Customers should be the priority and that is why, the company should satisfy their personal desires concerning communication.
The Implementation of Management Control Systems
The implementation of management control systems is a must for any company. As to Haier, it is a way of adapting to the internalization strategies. Consequently, the company should use Business Intelligence and Balanced Scorecard systems to record and report progress toward goals. The revenues of Haier come from goods produced and sold abroad, manufactured in China and sold overseas and locally. Such diversity of operations presupposes the application of management control systems. One should do enforcement in Haier according to the legal regulations and requirements. The main policies of the company are finding the appropriate locations, hiring and training of the personnel according to the standards of the organization. Haier managers should do monitoring of performance through the innovative technologies and management information systems.
One recommends using measurement performance systems in the organizations. Measurement performance systems will be an effective implementation in the organizations. They will give a good opportunity for the company to develop and innovate. Measurement performance systems have many advantages. They stimulate the increase of profits. It contains the information about all products and services, their prices, the rate level at the market, information whether customers buy or ignore them. It defines the target market.
Accountability should be done not only for the personal reasons but for fulfilling the legal regulations. Technologies should be applied for all operations and processes to make them more efficient. Studying the market of refrigerators and investigating the current tendencies in this industry in China particularly and in the world are the leading operations. Investigating the company, offering franchise cooperation and its requirements and finding the appropriate location for stores regarding local competition, potential demand and target audience are the leading processes of Haier. The company should use such techniques for marketing audit monitoring as SWOT analysis, Porter’s Five Forces analysis, and management information systems like Business Intelligence. The managers and HR managers should evaluate and control marketing policy in Haier.
Obtaining Optimal Operational Efficiency
Despite high profitability and sales, Haier needs obtaining optimal operational efficiency. One should do it with the help of new locations. Haier should find new markets for increasing the profits and use globalization for defense and support. Haier should employ competent workers who will produce qualitative goods. It means that they need to develop human resource management. The operational efficiency also depends on marketing strategy. Consequently, obtaining optimal operational efficiency should be done simultaneously with the changes of marketing strategy in this company.
As Haier is an experienced player in the market, it can use non-traditional ways of expansion. At first, the organization should focus on difficult markets as they help to reinforce prestige, develop the competitive advantage, provide the success, and become well-known. Later, Haier should deal with the problem of the staff turnover. The workers are not attached to a stable job; they always look for better places, with better salaries and insurance. Another aspect is the prices of the company’s products, which are not very cheap. One may even say that they are expensive. The demand on refrigerators may decrease because of the expensiveness. It is unreasonable to purchase expensive products while there some cheaper substitutes. Consequently, one recommends the improvement of pricing strategy.
The clients constantly complain about the rudeness of workers, low level of services, return policy and expensiveness. Thus, the company should find the ways to solve above-mentioned problems. In their management, Haier has chosen such categories: the dedication to sustainability, the level of customer service, and the variety of products. However, it should not limit its management to these aspects. In order to make Haier successful, one recommends collaboration with other companies, implementation of new products and services, decreasing prices, and increasing quality. The organization should be ready to the collaboration with other companies when it comes to the implementation of new services and goods as this will increase the number of customers.
It is crucial for the company to promote the diverse environment that provides the higher productivity. The company can change the recruitment methods to implement the innovative approach to the hiring process. Low employee satisfaction can also provokes challenges as the company can suffer from decrease of sales and profits. One should motivate the company’s employees to higher productivity through rewards and bonuses. The change management process is a must for Haier that presupposes improvement of marketing and increasing of profits. Employees also can be dissatisfied with the changes in the processes. However, the additional training and learning can change the situation.
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In conclusion, one should say that even such experienced and profitable company as Haier demands changes and improvements. First of all, Haier should transfer to strategic management as it will help to be more successful in the global market. Strategic management will help Haier to achieve more sustainable advantage and become more competitive. Secondly, Haier needs the changes in marketing strategy that should be based on the employees’ and customers’ interests. New marketing strategy should respond to the global aspects and innovation processes. Future development plans should be based on the implementation of a new business strategy. To define an appropriate development plan for Haier, one should conduct the environmental and organizational analysis. The marketing objectives of this company include increasing market penetration and maintaining strong growth. The advantage of Haier is that it is not a new player in the market; therefore, it knows the ways of customer attraction. This new business strategy will presuppose improvement of the product assortment, increasing of customers and becoming more competitive. The implementation of management control system will simplify all operations and help to control them in a proper way.