Haier in 2005
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Case Details:
Case Code : BSTA122
Case Length : 18 Pages
Period : -
Organization : -
Pub Date : 2005
Teaching Note :Not Available
Countries : China
Industry : -
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts
Background Note
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Haier, originally known as Qingdao Refrigerator Plant, was incorporated in 1984. The company initially produced only household refrigerators.
In 1985, the Qingdao Refrigerator General Factory had run into a debt of RMB 1.47 million and was virtually bankrupt. At that time, Haier was inefficient and bureaucratic like many other local Chinese enterprises. While costs had gone out of control, there were serious quality problems.
Zhang began to move the small loss-making company in the right direction. A speech given by Deng Xiaoping in 1992, inspired Zhang, to build the largest household electrical appliances industrial estate with an RMB 80 million (about $9.2 million) loan...
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Zhang's Management Style
Zhang's had been a remarkable success story. His parents were ordinary workers, with little influence or connections in Qingdao. They always encouraged Zhang's desire to change things, to make a difference in the society. They viewed education as a means of advancement. In 1968, Zhang graduated from Qingdao high school. Because of the Cultural Revolution most schools and universities were closed down. Entrepreneurs, shop owners, and millions of innocent people were condemned as "capitalist roaders,"...
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The Turnaround
In 1984, Zhang took control of a loss-making refrigerator firm. He inherited an organization, which lacked discipline. He developed three major strategies over three stages: brand building or recognition, expansion or diversification, and globalization.
Brand Strategy (1984 to 1991)
During this period, the company created and built the Haier-brand and set up a quality-assurance system. In April 1985, Zhang gathered all his employees and destroyed the first poor-quality refrigerator himself with a hammer... |
Excerpts Contd...>>
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