Report of the Competitive Advantage of the Haier Group in American Retail Market
Heier Group Company was founded in 1984 in China as an electrical appliance. The Group extended its operations to the Western countries through introduction of innovative products. However, Heier faced several challenges in their expansion efforts especially in venturing into the American market. Nonetheless, the company adopted several competitive advantage strategies in America that have remained to act as a panacea to management effectiveness in the operating environment in the area of refrigerators. Therefore, this report provides ways through which Haier Group in American Retail Market implemented its competitive advantage in order to attain its operational and management effectiveness and effeciency in the operating environmnet. Nevertheless, this strategies for competitive advantage forms the basis for the Group’s continous improvement.
Marketing Strategies
The Group adopted various marketing strategies to ensure that its goal of winning on American consumers is achieved. The strategies implemented by the Group include development of online marketing approaches. This was achieved through use of Group’s website. The website provides various products offered by the company. In respect to refrigerators, all categories are marketed are showcased on this website. This makes it possible for the Group’s products to be marketed to a wider global clientele hence increasing its market niche. This gives it a strong competitive advantage to Haier Group in American Retail Market since all its refrigerators are marketed to a wider market hence increasing its market demand.
Moreover, in terms of marketing of its products, Heier America assumes promotional activities to guarantee sales. The Group employs use promotional activities in different forms. For instance, promotions concerning different types of refrigerators are carried on both print and non print media.
In respect to print, the company carries its promotional activities in newspapers, magazines and in other printed material. In terms of non print promotional activities, websites, televisions and radios are some of the media that are used to carry a vibrant promotional program for the company. The promotional activity is highly prioritized by Heier America as it forms part of its competitive advantage. This has made the Group to surpass other players in the industry.
Product strategies
Today’s online shopping systems have been known to offer batteries of services and goods and just not collectibles. Haier Group in American Retail Market has diversified its products to appeal to the varying consumer demands. As previously highlighted on online marketing, the Group has provided an inclusive list of different refrigerators items under its stock. This gesture has enabled the American based retailer to answer the varying demands of American consumers. Therefore, this forms as a strong competitive advantage that the Group have employed to give it a competitive edge against other players in the market.
Ideally, the Haier Group in American Retail Market has adopted a differentiation strategy for its products. This has been evidenced by the quality and the unique American Heier refrigerators. By choosing to sell Heier refrigerators in the American segments, the retailer was tailoring its operations by determining the wants and dislikes of the American market (Hilb, 2008). This was a good example of the classic differentiation strategy. As such, many American consumers who are quality conscious have diverted their allegiance to the Group; leading to existence of repeat buyers.
Pricing Strategies
Haier Group in American Retail Market has been able to purchase and import its refrigerators from China in bulk; thus benefit from the economies of scale associated with bulk purchases. As a result of the large discounts gained, the chain store has been able to forward competitive prices to its American consumers. This has enabled many classes of consumers in America to afford its refrigerators. For that reason, this has contributed to increase in its market share.
Moreover, Haier Group in American Retail Market also applied pricing strategies in form of manufacturing of different categories of refrigerators. These refrigerators were different in terms of design hence catering for different category of users. For that matter, all categories of users were catered for in design of these products. Consequently, these refrigerators were priced differently according to the design and client category. Therefore, most clintele in the market niche are catered for through these pricing strategies hence forming part of the competitive advantage of the Group.
Distribution strategies
Haier Group in American Retail Market employs several mechanisms in distributing refrigerators. For instance, the group has used the internet as a means of distributing its products to its dispersed markets. To fight the negative perceptions associated with online purchasing, the chain store has a “secured” billing system. As such, its online system has gained consumer acceptance. This makes it possible for customers to transact their businesses with the Group online. For that matter, the operations have turned out to be effective and efficient both to the clients and to the Group itself. This has served as a competitive advantage in the operating environment hence positioning the Group for continuous improvement (Hill & Jones, 2009).
Embrace of Technology
At the time of embracing technological innovations, Haier Group in American Retail Market has experienced stiff competition from other multinational corporations. However, the Group was able to overcome the competition in the retail chain market posed by competitors. For instance, the success of the giant multinational retailer can be linked to how well its management has been to control and maintain the invented data mining technology.
Through efficient managing of data mining technology, Heier America was able to establish and strengthen its customer relationship management (CRM) processes (Hilb, 2008). The Group efficiently utilized the established data mining processes and its supporting technologies to track, enhance and retain customer relationships. This has helped in management since this technology promoted efficiency by forcing all its suppliers to place microchips in product containers, cartons and packaging containers. The company also enforced the use of special sensors at warehouses or store shelves.
All this communication occurred through use of wireless means. By efficiently managing the invented technology, the Group was able to maintain a constant supply of popular and fast moving items in stock leading to it earning high revenues. As a result, the company earned high revenues; it grew larger in sheer size and purchasing power thus enabling it to drive down the prices that it paid to suppliers, passing on those savings to customers in the form of cheap discounted prices for its products. The demand of the market therefore shifted to its stores and its competitors were left wondering on their next retaliatory moves.
Physical elements/pull factors
In addition, deriving from Barone and Roy (2010) study, Haier Group in American Retail Market authorities employed rebranding of its products. This was so when they strategically established themselves as a prime supplier of refrigerators in America. This led to the Group gaining better share in the distribution of refrigerators and other home appliances. A lot of capital were directed towards upgrading its then existing distribution channel. Strong channels of distribution become one of the core pillars of competitive advantage of the company since it was able to outshine other players in the market.
Panned marketing communication
Tellingly, the author established that the Haier Group in American Retail Market management did appoint a steering committee to oversee the Group’s marketing functions. As such, the members of the committee did a commendable marketing task. Some of this included carrying out an aggressive destination marketing campaign in the print and the electric media. The use of the internet forums were maximally used in communicating Heier’s refrigerators brand messages.
Moreover, there has been organization of expos in the area of home appliance. During this expo occasion, the Group gets to showcase its products to the clients in the market. This has been taken as a strong ground for marketing of its products since the Group’s products are showcased against their main competitors (Senk, 2004). For that matter, such events form a basis for competitive advantage. Moreover, this events usually bring many visitors who in return facilitate the spread of Haier Group in American Retail Market. This forms one of the key branding strategies where oral communication and networking strategies are used.
The Existence of Its Key Brand
Haier Group in American Retail Market established the several key brands in their refrigerators differentiation which continues to be highly attractive to many customers across global markets and especially to the regional American market. Clanderon (2009) noted that there is always gain and strong recognition due to its attractive packaging and strong image. This has been the case in relation to refrigerators that are offered by Heier America. For that matter, these key brands have won confidence of clients in the market hence continuing to gain popularity in the operating environment with serves the Group’s interest by serving as a competitive advantage. This increases the consumer market for the product.
Existence of a Wide Market
There are a variety of competitive advantage associated with Heier America is the availability of an expansive market network for Heier to operate in. America’s expansive market incorporates United States and other North American countries such as Canada. However, Heier America serves even South America which makes the market niche to be more expansive. For that matter, this factor acts as a crucial competitive advantage to the Group since its products such as refrigerators gets enough clientele. This is a key competitive advantage since not all products on the market can have such kind of a market empire.
To wind up, for any organization to gain competitive advantage in the operating environment, it is relatively important to have competitive strategic policies in place. However, these policies need to be regularly reviewed with the changing times to ensure that they remain relevant to the operating environment. In conclusion, it can be summed that good competitive policies that have been applied by Heier America have been the contributory factor to management effectiveness that have resulted to continuous improvement in its operations.
References
Barone, M.J. & Roy, T. (2010) Does exclusivity always pay off? Exclusive price promotions and consumer response. Journal of Marketing American Marketing Association, 74, pp. 121-135.
Clanderon, G. (2009) An introduction to organizational behavior. London: Oxford University Press.
Hilb, M. (2008) New corporate governance: successful board management tools. Germany :Springer.
Hill, C. & Jones, G. (2009) Strategic management theory: An integrated approach. USA: Cengage Learning.
Senk, G. (2004) Urban outfitters continuing case study: Marketing a business. USA: Cengage Learning.
Shefrin, H. (2009) Ending the Management Illusion: Preventing Another Financial Crisis. Ivey Business Journal, 32(4), p.432.