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HAIER GROUP: Inspired Living
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| Words: 2035 | Submitted: 18-Oct-2011
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DescriptionHaier group- example of globalisation
HAIER GROUP: Inspired Living
As the world moves towards globalization, a number of domestically operating firms have taken up the challenge of internationalization and globalization by adopting various modes of operation to grow. One of the main concerns is whether to stay within the home country or move abroad. Foreign direct investment and exporting are two ways of internationalization (moving abroad) through methods like joint ventures, mergers and acquisitions while, horizontal integration (outsourcing) and vertical integration are method to internalize (continue operating in the home country). A country exports the product that intensively uses factor in which they are abundant. As globalization has emerged, FDI has grown faster than trade. Foreign investments of multinational firms are important for the growth of the world economy than international trade. FDI have been increasing rapidly compared to international trade. In 1990, foreign subsidiaries of multinational companies were fairly equal to the world exports the two were roughly equal. In 2001, FDI was as twice as high as trade. In this essay, we have considered HAIER, the world’s 4th largest manufacturer in white goods and also one of the top 100 IT companies in China, to explain the different ways in which they have adopted different ways to internationalize to spread the sales and production within the country to reach a top level worldwide.
Haier is a large conglomerate with global revenue that had risen up to RMB 107.5 billion in 2006. Haier is the leader in 9 products in the domestic market and 3rd player of 3 products in the world market of home integration, network appliances, digital and large scale integrated circuits and new materials. They have also being ranked No. 1 for customer satisfaction and overall satisfaction. Along with 240 subsidiary companies and 20 design centers, plants and trade companies, 50,000 workers are employed worldwide. They have obtained more than 7000 patents and 589 software intellectual property rights. Their international framework includes global network of design, procurement, distribution, after-sale services and Production. These achievements indicate the progress made by the company on an international basis.
China mainly followed the ISI strategy where imports and exports were discouraged. This resulted in reduced competition in domestic market. However, by the emergence of globalization, Haier also started venturing into different parts of the globe competing with the companies in outside market in regards with the technology and services. Until 1992, the company was almost bankrupt with huge debts. Later, Mr. Zhang Ruimin was appointed as the new CEO of the Haier Group, when it started making profits with global sales up to 118 billion. The credit of growing success of Haier goes to their CEO Zang Ruimin who has been a key in transforming this small ...
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