Competitive Advantage Within an International Context
The National Environment:
Porter’s National Diamond
•FACTOR CONDITIONS Initially: China’s low labor costs, low resource prices, low transportation
costs. The late 20th century was the reforming and opening–up periods in China which prompted the
RESOURCE
Financial Resource: Net Margin rose from 3.36% in
2010 to 5.62 in 2014.
Human Resource: local experienced executives,
capable employees
Reputation: A Front–runner in terms of innovation and
product–design/ The first domestic corporate who got
ISO9001 quality certification.
Physical Resource
Technology
CAPABILITY
Management Capabilities: high autonomy in
self–managed teams/ Emphasis on talent and
employees’ capabilities
Customer Responsiveness: Established a
computerized service center
R&D and design capabilities: allied with high–tech
manufactures and established its own design and
R&D centers in Italy and German.
Sales and Distribution
POTENTIAL FOR COMPETITIVE
ADVANTAGE
THE INDUSTRY ENVIRONMENT
Key Success Factors
THE NATIONAL ENVIRONMENT
popularization of appliance. More importantly, the CEO Zhang Ruimin’s political ties being one of the
party’s central committee also helped Haier gain independence from municipal interference and
valuable support from central government.
•RELATED AND SUPPORTING INDUSTRIES Bohai Bay (Qingdao as the center) is one of three major
“clusters” of appliances industries in China. With the growth of Haier as a world–class famous brand,
a large number of complete machine manufacturing enterprises and parts manufacturing enterprises
had been established around Haier, and an industrial chain with household appliances as the core has
been rapidly extended and expanded. Qingdao city has been the largest white home appliances
supporting base, plastic processing base and sheet metal processing supporting base in China.
•DIAMOND CONFITIONS Chinese citizens’ preference for the national brands, and pursued
high–quality of refrigerators. Chinese employees’ working traits: hardworking, patient, with certain
labor skills, discipline and learning ability significantly improved.
•STRATEGY STRUCTURE AND RIVALRY With the aggravation of market competition, home
appliances entered the stage of industrial integration in China from 1990s, and the home appliance
