CASE 19
Haier Group: Internationalization Strategy
TEACHING NOTE
■ SYNOPSIS ■
The rise of Haier from a near-bankrupt, state-owned refrigerator factory in Qingdao, China to become the
world’s biggest domestic appliance company (in terms of units sold) is a remarkable tale of entrepreneurial
leadership by CEO Zhang Ruimin. It has also involved a strategy that flouts most of the conventional
■ TEACHING OBJECTIVES ■
Reading and discussing this case allows students to gain expertise in:
Analyzing the strategic logic that underlies a company’s highly unconventional international
development.
■ POSITION IN THE COURSE ■
I use the case in the part of my strategy course that addresses international and global strategies.
■ ASSIGNMENT QUESTIONS ■
What are the main features of Haier’s internationalization strategy since the early 1990s?
How does Haier’s internationalization strategy differ from the pattern of international development
typical of Western enterprises?
How successful has Haier’s international strategy been and why?
■ READING ■
R. M. Grant, Contemporary Strategy Analysis (9th edn.) Wiley, 2016, Chapter 12, “Global strategy and the
Multinational Corporation.”
■ CASE DISCUSSION AND ANALYSIS ■
The main features of Haier’s internationalization strategy
The strategy phases outlined in Figure 1 of the case (p. 646) relate to Haier’s overall corporate development.
If we focus on the international dimension of Haier’s development, we can point to the following elements:
1. Haier’s international expansion followed its turnaround as a domestic company—i.e. after
establishing Haier as a national supplier of refrigerators and washing machines in the Chinese
2. A “multidomestic” rather than a global strategy. In terms of entry modes, Haier’s international
initiatives have been seemingly haphazard: it has used exporting, OEM contracts, joint ventures,
3. Motivated by strategic rather than financial goals: Haier’s strategy has been oriented towards (a)
4. An emphasis in expansion into mature, sophisticated markets—especially Western Europe and the
US (reflecting the strategic goals outlined above).
How Haier’s internationalization strategy differs from that typical of Western enterprises
The “Uppsala Model” (see Chapter 12, p. 314) outlined a systematic, sequential approach to international
development that begins with exporting to nearby countries followed by increasing engagement (including
direct investment to establish production and distribution functions). Haier’s strategy is very different, both
in terms of its opportunistic approach, its range of different entry modes, and its choice to enter advanced
Finally, there is the emphasis on Haier’s localization approach. In terms of Bartlett & Ghoshal’s
categorization of the development patterns of multinational corporations (see Chapter 12, section on
How successful has Haier’s international strategy been and why?
The absence of detailed financial data on Haier makes it very difficult to assess Haier’s performance either
overall or in terms of individual national markets. What is beyond doubt, however, is that Haier’s overall
performance has been outstanding in terms of sales and market share growth and in terms of reputation. In
individual countries, especially the US, it is clear that Haier has done remarkably well in carving out market
share and building a brand presence.
Factors that have contributed to the success of Haier’s international strategy include the following:
For all the opportunism and decentralization of Haier’s international strategy, there have been some
consistent themes, notably Haier’s goal of building an international brand presence, and the use of
the Haier brand for most of its products in most countries. (However, note the introduction of its up-
market Casarte brand.)
management “bench strength” for a strategy that is based on transferring capabilities and
management systems from its home base using expatriate managers.
The features of Haier’s management system and lessons they offer other enterprises
Recognizing, let alone understanding, Haier’s management system is a challenge—the company’s lack of
transparency extends beyond its financial reporting!
The notion that Haier has combined conventional western management principles (derived from
Schumpeter, Peter Drucker, Jack Welch, Jim Collins, and others) with traditional Chinese concepts (from
Confucius, Sun Tzu, etc.) and then used this as a basis for management innovation is appealing. However,
from the limited descriptions that the case offers as to the operational details of Haier’s “market chains” or
Recommendations for Haier’s continuing success
Recommendations from students tend to be diverse; however, the primary question that arises is usually
concerning the need for greater integration among Haier’s separate international subsidiaries. Haier’s
successes have been in individual countries and individual product categories (e.g. small refrigerators in the
SS???). Building on this success is likely to require closer interchange of product ideas and marketing
