Overview of Haier Group
Established in 1984, Haier Group is a world-leading provider of solutions to beautiful life. In the process of innovation and entrepreneurship, Haier always upholds the principle of “prioritizing people’s value”. Mr Zhang Ruimin, chairman of Haier Group Board of Directors and CEO, proposed the Rendanheyi Model, whose contemporary features, universality and social characteristics have achieved trans-industry and trans-culture fusion and duplication.
Focusing on user experience and keeping abreast of the times, Haier started off as a collectively owned, small factory on the verge of bankruptcy before growing into an ecosystem that leads the IoT era and the sole IoT ecosystem brand among the BrandZ Top 100 Most Valuable Global Brands. In 2018, Haier Group generated a global turnover of RMB 266.1 billion, a year-on-year increase of 10%; its global profits and taxes exceeded RMB 33.1 billion, a year-on-year increase of 10%; and its ecosystem revenue reached RMB 15.1 billion, a year-on-year increase of 75%. To date, Haier has successfully incubated four listed companies, two unicorn companies and 12 quasi-unicorn and gazelle companies. Moreover, Haier has established ten major R&D centers, 25 industrial parks and 122 manufacturing centers globally. It owns a number of smart-appliance brands, including Haier, Casarte, Leader, GE Appliances from the U.S., Fisher & Paykel from New Zealand, AQUA from Japan and Candy from Italy, service brands such as RRS, Yingkang Life and COSMOPlat; and cultural and creative brand such as Haier Brothers.
Haier has topped Euromonitor’s World Home Appliance Brands for ten consecutive years. Its subsidiary Haier Smart Home Co., Ltd. is among the Fortune Global 500 Companies, while Haier COSMOPlat tops the industrial-Internet platforms of the Ministry of Industry and Information Technology and is designated by ISO, IEEE and IEC to lead the drafting of international standards for large-scale customization models. In the IoT era, Haier’s ecosystem brand and Rendanheyi Model are leading the world.
In the future, Haier Group will continue to work with its world-class ecosystem partners to build IoT ecosystems in clothing, food, accommodation, travel, health, elderly care, biomedicine and education, tailoring personalized smart life for users from around the globe.
Mr. Zhang Ruimin, one of “The World’s Top 50 Most Influential Management Thinkers” (Fortune), a world-renowned entrepreneur, the founder of Haier Group, the current chairman and CEO of Haier Group.
During his 33 years’ career as an entrepreneur, Zhang Ruimin has been at the helm of the Haier Group with innovative entrepreneurship and forward-looking strategic decisions and turned the company from a small factory on the verge of bankruptcy into a world-renowned business group. In 2017, Haier Group’s global turnover reached 241.9 billion yuan, with a year-on-year increase of 20%, and its global operating profit rose 41%. According to the survey data of the 2017 global large household appliances released by Euromonitor International, a global authoritative market research organization, Haier large household appliances has been ranked first for nine years in a row with a 10.6% brand retail sales share. In 2017, Haier Group was listed on Fortune’s “The Most Admired Chinese Companies” for the 12th time.
In terms of international business management, Zhang Ruimin also enjoys a high reputation. He always adheres to the principal of “the value of people counts most” and has made available new business models and classic cases for global management circle with innovative management philosophies, creating a competitive Haier culture.
In 1998, the case of “Haier Culture Activating Shock Fish” was included into the case library of Harvard Business School, and Zhang Ruimin became the first Chinese entrepreneur to give a speech at Harvard University; the OEC management approach proposed by him is still widely used in business management.
In the Internet era, Zhang Ruimin pioneered the “Integrating Order with Personnel” model that overturns the traditional bureaucracy, and turned Haier Group into a networked organization, where a conglomerate changed into more than 4,000 small and micro enterprises, each hiring 10 to 15 employees. These small and micro enterprises directly respond to the needs of users, all self-driven and self-managed, which gives employees unprecedented autonomy and freedom of resource allocation. Zhang Ruimin insists on the management philosophy that “everyone is their own CEO”, which can revitalize the vigor and creativity of people in a real sense.
The “Integrating Order with Personnel” model has also been successfully applied to many industries such as agriculture, medical industry and media and has also achieved cross-cultural replications in Japan’s Sanyo, New Zealand’s Fisher & Paykel and the US GEA. By using this model, GEA reached the best performance in its past decade, with revenue growth far exceeding other competitors in the industry and its profit realizing a double-digit growth. This also fully demonstrates how universal and social the model can be.
With the practice and in-depth exploration of the “Integrating Order with Personnel” model, Zhang Ruimin has put forward a number of new management concepts and tools such as “user multiplier”, “creator ownership”, “win-win value-added approach”, “life X.0” and “ecological brand”, further enriching his management theory system.
Zhang Ruimin won the high appraisal in the global management circle for his management philosophies and continued practice. Its “Integrating Order and Personnel” model is highly recognized by both international management and business circles, is considered to be an innovation in the third generation business management model after the Ford model and the Toyota model. Gary Hamel, a world-class master of strategy, appraised Zhang Ruimin as a representative of CEOs in the Internet era. Yih-teen Lee, a professor of the IESE Business School in Spain said that Zhang Ruimin is more than an enterprise manager, but a management thinker.
Zhang Ruimin’s business philosophy of “Haier is a sea” steers Haier Group as a global citizen in its efforts to create social value and assume corporate responsibilities, and to make due contributions for society and humanity. Haier will be “stay sincere forever” with love for society and humanity, and the world will go hand in hand with Haier.
According to Zhang Ruimin, there are no successful enterprises, only enterprises of the times, and the so-called success they’ve achieved only means they’re keeping up the pace of the times. Kevin Ashton, the father of the Internet of Things, visited Haier and commented that, despite having studied numerous companies in the world, he had never seen a company like Haier that was so well prepared for embracing the Internet of Things. In the era of the Internet of Things, Haier will build an eco-sphere on a co-creation and win-win basis under the “Integrating Order and Personnel” model, and create an ecological brand based on the Internet of Things to take the lead in activating the Internet of Things across the globe.
In 2017, selected as one of “The World’s Top 50 Management Thinkers”
In 2017, selected as one of “The World’s 50 Greatest Leaders”, Fortune
In 2016, the only Chinese entrepreneur who won the award of “Legendary Leader of the Year”, Yale School of Management
In 2015, won two awards, “The World’s Most Influential Business Thinkers 2015” and “Ideas into Practice”, Thinkers50
In 2015, “Best Practices CEO Award”, Best Practice Institute (BPI)
In 2014, the first winner to the “Fudan Award to Outstanding Contributions to Business Management”, Fudan Management Award Foundation
In 2013, the only invited entrepreneur to give a keynote speech at the 73rd Annual Meeting of the Academy of Management (AOM).
Haier Group acquired / owned SPI 100 percent and changed company name to Haier Electrical Appliances Philippines Inc.
Haier Group acquired / owned SPI 100 percent and changed company name to Haier Electrical Appliances Philippines Inc.
In 2010, “The Most Powerful Business People in China”, Fortune Magazine (Chinese version)
In 2009, “The 40 Most Powerful People in China”, US Business Week
In 2005, “Global 50 Most Respected Business Leaders”, Financial Times
In 2004, “The 25 Most Powerful Business People in Asia”, Fortune Magazine
In 2002, "World’s Greatest Business Leaders”, United Way International
In 1999, “The 30 Most Prestigious Entrepreneurs in the World”, Financial Times
In 1998, the first Chinese entrepreneur to give a speech at Harvard University
With the emergence of new economic patterns like the community economy and sharing economy in the ear of Internet of Things, Haier Group has pioneered and launched an ecological branding strategy.
During the attempts to put the ecological branding strategy into practice, the Haier model of “Integrating Order and Personnel” has once again demonstrated its extraordinary vitality. In the past two years, Haier U+, COSMOPlat, Shunguang and other global platforms have been introduced, and the full-scene customized “Life X.0” concept has been realized in its most impressive way. This will definitely become a new legend in Haier’s history.
Haier U+ Smart Life Platform is an open ecosystem that integrates global resources, including the Internet of Food, Internet of Clothing, Internet of Living, Internet of Entertainment and other IoT ecospheres. It brings unprecedented experience to users in various smart home scenarios, which fulfills users’ vision of an ideal home.
Haier's high-end manufacturing platform COSMOPlat is the only user-centered industrial Internet platform in the world that provides users with high-quality intelligent products. It also represents a community ecology that allows users to be part of the whole product design and manufacturing process. Here, anyone can become a designer and an inventor, and customize their own “Life X.0” with the help of Haier’s global technical resources.
At present, Haier’s ecosystem is supported by a strong community base. Haier has sold more than 210 million intelligent products to its users, and the number of real-time online users has reached 28 million. The number of Shunguang Platform contacts has reached 1.13 million, linking hundreds of millions of user resources. In 2018, Haier saw a robust growth in ecological income, reaching 15.1 billion yuan, with a year-on-year increase of 75%. These achievements have laid a solid foundation for Haier Group to create the No.1 ecological brand in the era of Internet of Things.
In the future, as the No.1 ecological brand in the era of Internet of Things, Haier will work harder to make the model of “Integrating Order and Personnel” a world-class Internet of Things model.
Since its founding in 1984, Haier has adhered to the unique win-win management model of “Integrating Order and Personnel” during each of its disruptive innovations and radical changes, releasing the vigor and creativity of people in a real sense.
Committed to self-renewal, Haier has gone through stages of brand building strategy, diversification strategy, internationalization strategy, global branding strategy and networking strategy. In the era of the Internet of Things, Haier continues to be a front runner in the industry by creating lifestyle-based ecological brands with its “smart home” approach.
Different Development Stages of Haier
In 1985 when the reform and opening up was initially launched, there was a huge market demand for refrigerators. Many manufacturers then only paid attention to the quantity rather than the quality. Haier was the first to set the business goal of supplying “zero defect” products. Mr. Zhang Ruimin, the founder of Haier, “smashed defective refrigerators”, which became a hit topic of the time, and the event was filmed as The CEO. A few years later, the refrigerator industry was challenged by overcapacity, but Haier products were still well received by the market despite a price rise. In four years, Haier won the National Quality Award (the highest award) as well as the honor of the Top Ten Well-known Trademarks in China. Haier changed the traditional concept of quality in people’s mind and improved employees’ professional level of quality management, thus creating the first famous Chinese brand in the refrigerator industry with excellent quality.
In 1991, by the opportunity brought by the “Southern Tour Speeches” of Comrade Deng Xiaoping, Haier embarked on the road of diversified operation. Amidst doubts from the public opinion and industry, Haier merged 18 loss-making home appliance companies, expanding its refrigerator-based product line to a diversified array of products, including washing machines, air conditioners, water heaters and other home appliances. By the time when many other home appliance companies began their diversified operations, Haier had taken the lead for ten years, which established Haier’s leadership position in Chinese home appliance industry.
Haier's diversified management does not rely on investment in capital and technology but is revitalized by the roots of Haier culture and management concepts. Use intangible assets to revitalize tangible assets and activate “shock fish” with Haier culture. This history has also become a world-class classic business case selected for the Harvard case library.
At the end of 1990s, after China's entry into WTO, many Chinese enterprises were hindered from expanding their markets overseas and turned to OEM. Zhang Ruimin, the founder of Haier, put forward the idea of "creating a brand by exporting", "first easy, then difficult". Haier started overseas business development, invested in the construction of factories, and took the lead in the developed countries to create its own famous brand.
In 1999, Haier set up its first overseas industrial park in the United States. At that time, the huge investment was questioned by the media and public opinion. But from today's point of view, it is a highly forward-looking and far-sighted decision. It is the establishment of American factories that laid the foundation for Haier's stable foothold in the United States market. Later, in order to thank Haier for its great contribution, the local government of the United States named a "Haier Road", which is the only road in the United States named after a Chinese brand. Since then, Haier has gained international fame with its high quality products, and Haier has become the leader of Chinese brands on the world stage.
Since 2005, Haier has entered the stage of global branding strategy and adhered to the development philosophy of “localized design, localized manufacturing and localized marketing”. In 2012, Haier acquired Sanyo Electric’s multiple businesses including washing machines and refrigerators in Japan and Southeast Asia. After that, Haier successfully acquired New Zealand’s high-end home appliance brand Fisher & Paykel. On January 15, 2016, Haier and GE strategically collaborated to integrate GE’s home appliance business, forming a new alliance model for large companies to do business out of prices system. The Wall Street Journal described Haier as creating a “Chinese surprise”.
By 2018, Haier has established 10 R&D bases, 24 industrial parks, 108 manufacturing centers, 66 marketing centers and 143,330 distribution networks around the world. With more than 60,000 employees worldwide, Haier has jumped to be the world’s number one home appliance brand.
In 2012, Haier proposed a networking strategy. Haier transformed from a traditional home appliance company to an Internet company, turning its traditional business organization into an open ecological platform. The relationship between the company and the upstream and downstream industry chain has changed from one based on zero-sum game to one featuring a benefit-sharing community. The huge business organization of Haier has become nodes in a network platform. The parties in the platform share values and achieve win-win benefits in a self-organizing and self-driven manner. All stakeholders including employees, user and social entrepreneurship teams can participate in the entire process of design and creation, and leverage the resources of Haier platform flexibly and efficiently. Haier broke the organizational structure based on bureaucracy and turned it into a pattern composed of various entrepreneurial teams that are directly responsible for users. In this way, staff members have turned into creators from employees and executors, and a “enterprise pay” system turns into a “user pay” system, which not only stimulates the initiative and leading spirit of employees, but also helps them realize self-worth while creating values for users.
Led by CEO and Board Chairman Zhang Ruimin, Haier enters Networking Strategy Stage in 2013. Lashed by the impact of the Internet traditional economic models are undertaking dramatic changes. Priority of Haier in the future is producing products to meet the personalized demands of the consumers.
Since 1984 when all the pioneering started Haier Group has gone through four strategic stages, namely the Brand Building, Diversification, Internationalization and Global Brand stages. And in December 2012 Haier Group announced entrance into the fifth development stage: Networking Strategy Stage.
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