SWOT Analysis Strengths: • Haier has a single company which serves the entire group in logistic that could reduce their cost. • They have a good innovation and continue improving in the product design. • Their products focused on the quality, which is better then their competitors in domestic market. • There is a service center that has a good service performance with computerized system in order to tracks the customer response. Weaknesses: • Opportunities: • The opportunities to gain more market share in the international market. • Threats: • Low-quality image of Chinese manufactured products. Competitors have more power to dump the price in case of international market. Five Forces Analysis Threat of new entrants: • It’s difficult to enter to this industry because of large capital requirement. • Firms are not able to offer unique product easily. Degree of competitive rivalry: increase • It will be lack of differentiate products. • There are equally balanced competitors in this industry. • According to many competitors, it leads to high inventory cost. Bargaining power of buyers: Increase • The switching costs are very low because they can buy from many companies.
Bargaining power of Suppliers: Decrease • The suitable substitute product are available. Threat of substitute products: Problem/Key Issue. It is difficult for Haier to gains a large portion of market share in the United States market because their brand is not well known in the that country when compare with GE and Whirlpool, also low-quality image of Chinese manufactured products. Alternative Actions & Evaluations. 1. Innovation of unique product. Haier might diversify into unrelated products which no one has never produced it before, and also can meet customer satisfaction.
It could attracts more customers under the brand of “Haier” Pros • If the demand of their unique product increases, it will lead people to know their brand more. It can link to increase on sale volume on their core product as appliance products like the standard refrigerators, air conditioners, washing machines, and other products. • It is possible to increase their revenue if their unique product can be a famous product in United States. • This can diversify risk into this business when the trends of appliance market decline. The company can have another choices.