As a company, it is differentiated most by its R&D focus on niche markets. Furthermore, it attempts to achieve its value proposition through producing high quality zero defect products at very low costs, implementing continuous improvement and innovation through internal competition structure; attempting to maintain zero inventories with the use of a pull distribution structure and increasing management of decentralized value chains in emerging markets (Leinwand, Mainardi, & Kleiner, 2016). Figure 1.3 summarizes their value proposition …show more content…
As costs of sales have remained somewhat constant, it appears that this situation is a result of a significant increase in expenses compared to the revenue
a) Market Reach
Qingdao Haier has nine overseas factories covering Europe, America, Asia, Middle East and Africa with sales network that covers over 43,000 entities (Mergent Online, 2016). Additionally, in Europe and America, Haier brand has penetrated into the top 10 retail chains. The strategy in developing countries is to expand the number of home appliance franchised stores. Additionally, the expansion strategies to purchase General Motors and enter into a joint agreement with Alibaba have furthered the extent to which Qingdao Haier has expanded their market reach and made their products readily available to consumers.
b) Brand Recognition
According to the data published by Euromonitor, Haier has been ranked first among global large home appliances brands for seven years. As can be seem in figure 2.1, refrigerators, washing machines, wine cellars, freezers continue to be capture significant part of the market. These products are actually ranked as the most popular worldwide. This has contributed to strengthening the brand and promoting greater recognition among consumers. According to survey data provided by Millward Brown, Haier brand awareness in overseas market has exceeded 60%