Haier Group Corporation A Consumer Electronic Company

1. Haier Group Corporation A Consumer Electronic Company By: Wade Klussman and Dakota Williams

2. Haier Group Corporation: What is it? • Produces home appliances and consumer electronics • i.e. Refrigerators, Air Conditioners, Cell Phones, Televisions, etc. • Headquarters • Qingdao, Shandong Province, China

3. History of Haier • Origins can be traced back to 1920s • Refrigerator factory built in Qingdao • In 1940s, factory taken over as SOE • Result of People’s Republic of China being founded • 1984 • Company named as Qingdao Refrigerator Co.

4. History of Haier (cont.) • Liebherr • German refrigerator company • Joint-Venture Contract with Haier • Brought new technologies and management practices to Qingdao Refrigerator Co • Company renamed as Qingdao-Liebherr • Company retained profitability after the pairing of the two companies • ~83% sales growth each year

5. History of Haier (cont.) • Zhang Ruimin • Current CEO of Haier Group • Introduced to company in 1980s • Appointed Managing Director of factory in 1984 • Company was experiencing: • Lack of quality control • Run-down equipment, buildings, etc. • Lack of competent management • Ruimin turned this around

6. History of Haier (cont.) • Expansion beyond refrigerators • Government asked company to take over some failing appliance companies • 1988 - Qingdao Electroplating Company • 1991 - Qingdao Air Conditioner Plant, Qingdao Freezer • 1995 - Qingdao Red Star Electronics Co., LTD.

7. Formation of “Haier Group” • 1991 • As a result of producing more lines of products, adopted new name • Qingdao Haier Group • “Haier” came from the Chinese pronunciation of Liebherr • 1992 • Name finally changed to current • Haier Group

8. Further Expansion of Products • Haier Group bought out Huangshan Electronics Group • Began production of televisions • Sold cell phones and computers by the end of the 1990s

9. Expansion Beyond China • First expansion • 1996 • Factory set up in Indonesia • Next expansion • 1997 • Malaysia and Philippines • Expansion to US • Began with niche markets • Small refrigerators • Transitioned into selling full-sized refrigerators

10. Expansion Beyond China (cont.) • Production sites established in Middle East during early 2000s • Pakistan • Jordan • More factories put in countries in Africa • Tunisia • Algeria • Egypt • Nigeria • South Africa • Opening of site in Italy allowed access to European market

11. 2014 Controversy • Cell phones from Haier Group were found to have pre-installed malware on them • Malware could not be removed by user or by antimalware software • Phished personal information and data from phone

12. Zhang Ruimin, The Philosopher-CEO • Zhang Ruimin has been widely regarded as China’s first Philosopher-CEO, leading Haier to great success through a conceptual organizational structure and a workplace culture that strives for innovation and greatness. • Ruimin was a self study, idolizing historic philosophers such as Lao-Tzu and Sun Tzu, as well as more modern businessmen such as Peter Drucker and former GE executive Jack Welch.

13. Ruimin Continued... • Through Ruimin’s insight, not only is Haier a successful and profitable company, but it seeks to provide services to customers like water safety information and overall quality of life improvements they can make. • Ruimin also constantly updates the company to move with the times, improving the structure of the business by utilizing the latest e-commerce and custom order technology. • A pyramid-like work structure for sales employees promotes an entrepreneurial spirit and an ever improving attitude. • They also contract employees who work outside of the day-to-day operations within the company, allowing for fresh eyes to create new and innovative products. • Despite the company’s success, Ruimin has remained adamant that Haier will never stop improving in all areas and shall continue to provide extensive services to both employees and customers.

14. Ruimin’s Company Culture and Attitude • Ruimin doesn’t believe in taking holidays and at age 68, he doesn’t intend to retire any time soon. • He also allows for open management discussions with employees on Sundays, promoting a business culture of both mentorship and open mindedness. • Many employees within the company idolize Zhang for his open conversations and constant desire for individual improvement.

15. Haier, The Fastest Growing Appliance Manufacturer • In 2016, Haier’s profit was 20.3 Billion RMB with Year-on-Year profit growth at 12.8%. • They purchased GE Appliances in 2016, which did not contribute to these profit figures. • They currently hold 10.3% of the world appliance market, the largest segment of which being deep freezers, controlling 21.5% of that product market.

16. Ordering Products from Haier • Products from Haier can be customized by every customer with different colors and specifications to match individual needs. • Haier makes specific products for different regions all over the world, such as larger washing machines for Pakistani robes, smaller machines for Chinese delicates, and even vegetable washing machines for farmers throughout China. • They also try to create new products in markets outside of their original appliance products. • These products include industrial robots, 3D televisions, and Computers.

17. Future Products and R&D • Haier allows for employees, outside contractors, and even competitors to submit ideas for new products. • They have a product showroom displaying the newest creations as well as future products yet to be sold on the open market. • This showroom has exciting inventions such as no glasses required 3D TVs, brainwave remote controls, and a 65 inch touch screen TV. • Another important product released in the last few years was the Haipad, a tablet that offers eReader support and 3D technology. • New products and ideas also flow into the company through their purchase of other firms, both large and small.

18. Haier Acquisitions • The most noteworthy purchase by Haier is that of General Electric Appliances, which they bought in 2016 for $5.6 billion U.S. • This purchase was primarily to allow Haier to move into the American appliance market, of which they only controlled 1.1%. • They’ve also been known to buy local failing businesses throughout China in order to open new factories and offices to expand their company and provide opportunities to those who would otherwise lose their jobs.

19. The Five Platforms • Haier’s constant improvement and breakthrough is spread out over five different platforms. • White Goods Transformation- From traditional home appliances to network appliances and Home Hub tech. • Investment and Incubation- Providing new products and services as well as finding new niches. • Financial Holdings- Internet transactions and industrial finance, mostly in medical and agriculture. • Real Estate- Haier has been in real estate since 2013 and even has custom designed homes for sale. • Cultural Industry- Protects intellectual property, such as their 10,000 patents. Also covers social media and web-based games.

20. As a World Player • Up until the purchase of GE Appliances, Haier mostly only exported to Europe and other Asian countries. • Their emergence into the U.S. market will also allow for expansion conceivably for the rest of the continents they’ve yet to tap into, such as South America, Australia, and Africa. • They currently employ over 80,000 people and have thousands of offices outside of China.

21. Current Event Summary Haier has emerged as a world leader in appliance manufacturing and innovation. They have grown so much from being a state-owned factory on the verge of failure. Constant improvement, radical new ideas, and a culture of self elevation have given the company the opportunities to cement itself as an industry giant for the decades to come. The End.