Case Analysis of Qingdao Haier I. Factual Summary: • Maytag has a 15 percent U.S market share in the household appliance market, while Haier has a 3 percent U.S. market share. • Haier’s business strategy includes: Becoming a first class brand, becoming the 3 rd largest manufacturing household appliances in the U.S., utilizing a single corporate brand, creating a localized brand name, penetrating difficult markets first, utilizing a limited budget for media advertising. • Maytag’s company profile: Premium mid-price market, respectable, recognizable brand in the U.S., utilizing only 60 percent of their manufacturing capacity, multi-branded, manufactures approximately 75 percent of their products in the U.S., has a retail market eroding since 2001, excellent distribution network. II. Case Problem/Opportunity: The case opportunity and problem is whether Haier should adapt its current global business strategy and initiatives in an effort to reach the company’s goals, which include
Qingdao Haier Ltd is one of the most successful appliance industry companies in China, that strategy is to focus more on specialized in relatively to diversification. In 2005 Qingdao Haier executives face major decision of whether or not to bid on the purchase of Maytag Corporation, the third largest U.S home appliance manufacture.
Qingdao Haier Ltd expansion to global markets strategy is one of the major ways used by different big manufacturing and service companies to overcome competition in home base. Qingdao Haier Ltd expansion was main aiming to overcome completion in appliance industry in China and other part of the world where it was already recognized. This strategy of localizing brand name can also be used to create comfortable setting to customers.
Maytag Corporation Back ground
Maytag Corporation is one of the successful home appliance manufacturers in US. It design manufacture and sells, and services of home and commercial appliances in North America and selected international market.88% of Maytag consolidated market is US and 12% in other countries.
Maytag has a target its market in different level, from medium to high-range of appliance buyers. Maytag does not aim to target low-end segments or to retailer whish can be one of the main reasons why it has not being doing well since 2001.
The financial analysis shows Maytag may not be of great benefit now or even in the near future due to the large debt, deteriorating of sales and revenue as well as high priced stocks.
Qingdao Haier has strong point to give Maytag a benefit of a doughty that, even though everything is not so well, if they enter the US market by acquiring Maytag and using their innovation to modify Maytag product, there have a possibilities of making great business. Maytag has a well established brand name, it has been successful in the past and in it has potential to image again due to a strong Maytag brand reputation...