A Profile of Haier Group
Founded in 1984, the Haier Group has been dedicated to innovation and creating a world famous brand over the past 26 years. Originally a small collective plant on the verge of bankruptcy, it has now grown into an international group which has more than 70,000 employees around the globe and realizes a turnover of 135.7 billion yuan in 2010. Haier has risen to be the world's No.1 brand of consumer appliances. In addition, it was selected as one of the world's Top 10 innovative companies issued by USA Newsweek's website.
Haier aims to create a world famous brand in the age of the Internet, which features satisfying the personalized needs of users in a short time. What such a business needs is large-scale customization rather than massive production. Taking this opportunity provided by the Internet, Haier addressed this challenge and actively explored and practiced the "Win-win Mode of Individual-Goal Combination". Through "Inverted Triangle" organizational innovation and "End to End" ZZJYT construction, it realized the transformation from "selling products" to "selling services" and fostered differentiated and sustainable competitive advantages.
Trend-leading R&D advantages ---- The Haier's patent applications total over 10,000- ranking first among Chinese home appliance firms. Haier takes the lead to make breakthroughs in international standards. It participated in the drafting of 51 international standards, 27 of which have been issued and implemented. The company boosts the export of the entire industry chain through standard output.
Zero-distance virtual and practical network combination ---- Haier has enormous marketing network advantages in China. In full combination with the Internet, it developed the competitiveness of catering to the demand of consumers in the quickest time via "zero-distance virtual and practical network combination". "Virtual network" refers to the Internet, which forms customer loyalty through online communities; "Practical network" refers to the marketing network, logistic network and service network, which helps realize the quickest delivery. Therefore, a lot of world-noted brands commission Haier to manage part or all of their sales in China. In the meantime, Haier utilizes their channels overseas to sell its products. With resource exchanges, Haier speeds up the pace of entering the world market.
Zero inventory with on demand manufacturing and delivery ---- Giving up the traditional product-oriented development pattern, Haier adopts the user-oriented large-scale customization of "on demand manufacturing and delivery", realizing "zero inventory" and "zero accounts receivable". On the basis on working capital zero loans, Haier's cash conversion cycle reaches minus 10 days.
In future developments, to meet demand in the era of the Internet, Haier will place emphasis on U-Home integration, try to control the say on patent standards, further improve global marketing networks and create more user resources. Meanwhile, the company will integrate worldwide R&D, production and sale resources with the "3 in 1" localized mode so as to create an international brand.
While devoted to its development, Haier actively fulfils its social responsibilities, assisting in the building of 129 hope primary schools and producing the 212-episode children's science cartoon Haier Brothers. Haier was the sole consumer appliance sponsor for the Beijing 2008 Olympic Games.
February 2011

Four Strategic Development Phases of Haier
Brand Building Phase (1984-1991)
In the early days of China's reform and opening, the market was still relatively controlled; a limited supply of goods was insufficient to meet the enormous demand. Economic conditions in the early 1980s were such that to buy a refrigerator required first obtaining a 'refrigerator coupon.' Haier observed that the demand was unrelated to product competitiveness, but was rather a byproduct of a closed system which kept companies from tapping an enormous potential market for high quality consumer goods.
As a result, Haier established the "Brand Building Strategy" and the "Zero Defect" quality standard. In no time, Haier reaped the rewards of these initiatives. In 1988, in only its fourth year of existence, Haier earned the first ever National Gold Medal awarded in China's refrigerator industry.
By the late l980s, times were changing and the market was flooded with refrigerators, forcing many suppliers to cut prices. Despite the glut, Haier's products remained consistently popular and the company was even able to increase prices by 12%.
Features: By only focusing on refrigerators, Haier was able to accumulate valuable business and management experience. This experience allowed the company to build a management model which could be used with future business units.
Achievements: Haier was able to transform itself from a small factory operating at an annual loss of nearly RMB 1,470,000 into the number one refrigerator brand in China.

Diversification Development Phase (1991-1998)
In the 1980s, demand vastly exceeded supply with Chinese firms generally setting sales targets based on production capacity. By the early 1990s, however, the situation had reversed, dealing a significant blow to the strategies of the past decade. Many home appliance manufacturers chose to compete on the basis of price, which provided occasional short-term market gains but reduced their capacity for further innovation and corporate development. For example, by 1998 the average color television manufacturer in China operated in the red, and in 2001 nine publicly listed home appliance companies combined for over RMB 3.545 billon in losses.
Haier observed that marketing was less about beating annual sales quotas and more about winning the hearts of the customers. The reduced demand in the 1990s did not mean the market had reached the limits of its potential, but rather that products were not meeting the expectations of increasingly savvy consumers. The company established its "Diversification Strategy" to expand the Haier brand beyond refrigerators, adding washing machines, air conditioners, and other items to its product line. At the same time, Haier did extensive consumer research, listening to its customers and even regarding complaints as a valuable tool for refining corporate strategy. When the industry followed Haier's example by also focusing on product quality, Haier once again forged ahead of the competition, extending its emphasis on quality to customer service, a move which further bolstered customer loyalty to the Haier brand.
Features: Haier moved from a single-product company to a manufacturer with multiple product lines and expanded its brand to include both brown goods as well as white goods. Internally, the company restructured operations to maximize latent corporate potential, using intangible assets to get the most out of existing tangible assets. By doing so, Haier was able to quickly grow the scope of its business while enhancing the company's overall strength and position.
Achievements: From being a top producer of refrigerators, Haier became the number one home appliance brand in China.
Globalization Phase (1998-2005)
In the 21st century, globalization provided opportunities for Chinese companies to earn foreign exchange by leveraging lower production costs and functioning as an original equipment manufacturer (OEM), for multinational corporations (MNCs). But as China developed economically, rising labor costs meant that China's time as the world's 'factory floor' would soon be coming to an end, and many MNCs shifted their production facilities to countries, such as Vietnam, which offered a cheaper source of labor. Those Chinese manufacturers who continued to rely on cut-rate production to attract business soon found themselves abandoned by their international partners.Haier's view was that in the age of globalization, only those MNCs with their own proprietary intellectual property and strong brand identities would be competitive in the world business arena. Faced with this reality, Haier knew the time was right to go global.
Features: The Haier Group implemented a three-step globalization strategy: 1) enter international mainstream markets; 2) utilize main sales channels to deepen market penetration; 3) establish Haier as an internationally recognized global brand.
Achievements in this phase: A tripartite (design/production/marketing) operational framework was established in six key regional markets: North America, Europe, Middle East/Africa, Asia-Pacific, ASEAN, and South Asia. Utilizing this strategy, Haier now sells products in over 160 countries around the world.
Global Brand Building Strategy Phase (2005-)
With the development of information technology and ever faster global economic integration, the world is flattening. Every minute of every day, there are 1.4 million internet search requests; we live in a global information age. For some companies, over 30% of their innovation comes from outside sources. Companies cannot satisfy consumer requirements on their own; finding a way to integrate the individual talents is the key to future success. Haier believes that no individual, company, or country can survive without the support of a wider community. The new rule for international businesses today is this: Co-operate or Perish. To his end, Haier last year launched a 1000-day information management revolution. This revolution has involved restructuring organizational frameworks, processes, and people. Haier's design centers, manufacturing bases, and trading companies in over 30 countries will come together to share global resources through a single information platform.
Features: Opening the gate, build a garden without fences. In the spirit of "openness, equality, sharing and global operation", Haier is on the way to integrate global resources to satisfy consumers' needs all over the world. The difference between the Globalization Phase and Global Brand Building Phase is as follows: In the Globalization Phase, Haier is still based in China, radiating to the world; while in the Global Brand Building Phase, Haier aims to build a local Haier brand in each geographic area all around the world.
Achievements: By integrating its centers around the world, Haier created a 1+1+N team without borders. Through tapping the global marketplace of ideas, innovations, and human resources, the company has improved its ability to confront challenges and develop timely, effective solutions. Haier programs, like the PC Ordering Department in Macedonia, demonstrate the company's ability to internationalize its business culture and adapt to conditions in a global marketplace.

Haier’s Milestones * May, 2008: Immediately following the Sichuan earthquake, Haier CEO Zhang Ruimin visits the disaster area, personally extending the condolences of the entire Haier corporate family. By June, 2008, the Haier Group has provided a total of 38 million RMB worth of materials and financial aid for the reconstruction of primary schools and homes destroyed by the earthquake. * December, 2007: The commission for the safety of household and similar electrical appliances of the International Electronics Commission (IEC/TC61) announces that the water heater security standard proposed by Haier would be listed as the international standard by the end of 2008. Through July 2008, Haier has participated in the drafting of nine international standards; three of those--related to washing machines and water heaters--are set to become international standards by the end of this year. * May 1, 2007: Haier (Thailand) purchases Sanyo's refrigerator factory in Thailand and established Haier Thailand industrial park. This is Haier's forth industrial park overseas, making Haier the second largest refrigerator manufacturer in Thailand. * January 1, 2007: Haier purchases a local refrigerator manufacturer in India. At present, Haier's Indian factory, which focuses mainly on refrigerators, employs over 300 workers and has an annual production of 350,000 units. * November 26, 2006: The Haier-Ruba Economic Zone is unveiled in Lahore, Pakistan. This is the first of the ten overseas economic and trade cooperation zones established outside China by the PRC Ministry of Commerce. * October 27, 2006: Haier set up the Haier Sanyo Co joint venture with Sanyo in Osaka, Japan. * June 22, 2006: The world's first powder detergent-free drum washing machine is launched by Haier. * April 10, 2006: Haier becomes a strategic partner and the first world home appliance sponsor of the National Basketball Association. By its association with one of the most popular sports leagues in the US, Haier aims to become a household brand in North America. * August 12, 2005: The Beijing Organizing Committee for the Games of the XXIX Olympiad announce that Haier will be a corporate sponsor for the 2008 Olympic Games, making Haier the sole white goods sponsor of the Beijing Olympics. * June 28, 2005: China's Ministry of Information Industry issues China's first national standard for a network home appliance, with Haier taking the lead in the institution of the new standard. Haier adopts the new standard in the development of the company's third generation network home appliances. * March 1, 2005: Haier (Middle East) Industrial Park opens in Jordan. This is the largest home appliance industrial park in the Middle East. The industrial park becomes Haier's operations platform for the Middle East region providing a base for Haier's products to be sold in surrounding countries including Syria, Lebanon, Egypt, and Palestine. * May, 2004: Haier's Freezer Unit passes Social Accountability 8000 (SA8000:2001) Certification, as Haier is recognized internationally for its commitment to corporate social responsibility. The occasion also marks the first such recognition of Haier by the international community. By June 2008, over 10 other units including electronics and home air conditioners will have passed SA8000:2001 * November 28, 2002: Haier New York Life Insurance Co., Ltd is established as a joint venture between Haier and New York Life Insurance Co., Ltd. with registered capital of 581 million RMB. * September 11, 2002: Haier invents the world's first double-drive washing machine, the fourth type of washing machine design after the top-load, front-load, and agitator models. * July 27, 2002: Haier is recognized as the first company in the world to adopt the International Organization for Standardization's ISO10015 training system. * September 19, 2001: Haier launches Patriot I: China's very first large scale integration digital television MPEG-II decoding chip for commercial use. * June 19, 2001: Haier purchases a refrigerator company from Meneghetti Equipment of Italy. This is the first cross-national acquisition by a white goods company from China. With Haier's design, research and development centers in Italy, Holland, Germany and Denmark and its marketing center in Milan, Haier achieves its Three-in-One operational framework in Europe in addition to the United States. * April 10-12, 2001: Haier's second overseas park opens in Pakistan, selling products to India, Afghanistan, the Middle East, and Africa. * April 30, 1999: Haier establishes an industrial park and the company's first overseas factory in South Carolina, USA. With a design center in Los Angeles, a marketing center in New York, and a manufacturing facility in South Carolina, Haier establishes its first international Three-in-One operational framework. In March 2000, the South Carolina facility produces the first US-made Haier refrigerator. * March, 1998: Haier CEO Zhang Ruimin is invited to lecture at Harvard Business School on the concept of "Activate Shocked Fish," a Haier corporate strategy of maximizing a merged company's latent or underutilized potential. Subsequently, the University of Southern California, IMD in Switzerland, INSEAD in France, and Kobe University in Japan conduct research on Haier's OEC management model, market chain management system, and individual-goal combination. Haier's market chain management system is also included in the European Union's case database. * 1997: Haier passes ISO14001 for environmental management becoming the first Chinese home appliance manufacturer to achieve ISO14001 certification. Subsequently, Haier passes QC08000 Hazardous Substances Process Management certification and the European Union's RoHS (Restriction of Hazardous Substances) certification. * September, 1997: Haier's entry into the color television industry marks the company's first foray into the brown goods market. * November 19, 1993: Qingdao Haier (600690) is listed on the Shanghai stock exchange. * September, 1992: Haier achieves ISO9001 accreditation, the first Chinese white goods manufacturer to do so and an indication of Haier's position as a world-class supplier of home appliances. * December 20, 1991: Haier purchases the Qingdao Freezer Factory and the Qingdao Air Conditioner Factory forming a new entity, the Haier Group, and signaling Haier's entry into the Diversification Development Phase. In July 1995, Haier purchases the Qingdao Red Star Appliance Co., Ltd. In 1998 Haier further lowers costs by merging 18 factories in China, including the Shunde Washing Machine Factory (Guangdong), Laiyang Iron Factory (Shandong), Fenghua Refrigerator Factory (Guizhou), and the Hefei Huangshan Television Factory (Anhui). By introducing Haier's management team and corporate culture into these companies, Haier is able to 'activate shocked fish,' helping these struggling firms to maximize their latent potential. Haier expands its business from a single product--refrigerators--to a firm with a diverse product line including washing machines, freezers, air conditioners, televisions, and water heaters. * 1990: Haier products gain UL certification for standards and safety issued by Underwriters Laboratories. They also receive cross recognition and product certification from a number of renowned accreditation agencies including Intertek Foreign Trade Standards, UL, Technischer Uberwachungs Verein in Germany, Japan Electrical Safety & Environment Technology Laboratories, Canadian Standards Association, LGA, Korean Testing Laboratories, China Quality Certification Center, Prufstelle Testing and Certification Institute in Germany, and Laboratoire Central des Industries Electriques (LCIE) in France. * December, 1988: Haier is awarded the National Quality Gold Medal, the first such award in China's refrigerator industry, an achievement made possible through Haier's "Branding Strategy." The award also establishes Haier as the top refrigerator manufacturer in China. * December 26, 1984: Zhang Ruimin is appointed as director of the Qingdao Refrigerator Factory, a collectively-owned factory at the time facing nearly 150,000 RMB in losses. In 1993, the factory is renamed "Haier," with the name coming from the German company, Liebherr International Deutschland GMBH, who permitted Haier to use its technology and allowed the use of its logo during this early stage of Haier's development.

Haier's Global Business Units
Haier is a successful provider of integrated home appliances, meeting the needs of global consumers through continuous innovation. Haier's businesses include the following six units:
I. White Goods
By proposing the idea of "a full set of home appliances plus one-stop service," Haier provides a single source for home appliance manufacturing, design, production, consulting, purchasing, distribution, installation, and upgrading for a full range of innovative products. Haier can provide thousands of comprehensive home appliance solutions to meet the individual needs of consumers.
Refrigerators
Haier is the world's biggest refrigerator manufacturer. Haier's line of refrigeration units includes five series: single-door, double-door, multi-door, six-door and bisectional doors. Haier's high-end refrigerators are trend leaders in international design. The super-silent refrigerator specially designed for the 2008 Beijing Olympic Games uses semiconductors instead of compressors to allow refrigeration with absolutely no sound. Haier's variable temperature refrigerator, designed especially for the North American market, has brought that market into the "variable temperature era."
In 2007, Haier's three-door refrigerator won Germany's IF Design Award. Haier's Italian-style three-door refrigerator has also earned the Red Dot Home Appliance Design Award.
Air-conditioners
Haier manufactures eight series of air conditioners offering thousands of choices to meet the air conditioning needs of global consumers.
Haier's "oxygen-bar" air conditioner can separate nitrogen from oxygen in the air to keep the oxygen concentration at around 30%, thus giving the room a well-ventilated feel even with the air conditioner switched on. An air conditioner specially designed for the 2008 Beijing Olympics automatically filters dust and bacteria.
In 2008, Haier's air conditioner was chosen as one of the "Ten Creative Products Affecting the World" by the World Innovative Economic Research Center, and was the only brand listed from a developing economy.
In the highly competitive US market, Haier air conditioners were rated number one by Consumer Reports magazine, who recommended Haier as a "Best Buy"; the only brand from China so named.

Washing Machines
Haier is the only home appliance manufacturer in the world producing the top-load, front-load, agitator and double-drive washing machines. Haier produces 18 series of washing machines with more than 5000 models.
The double-drive is a new type of washing machine which can realize simultaneous rotations of the impellers and the inner drum, using 50% less water and electricity than other designs. Haier's detergent-free machine is equipped with a diaphragm electrolyzer which electrolyzes running water into low acidic and low alkaline solutions. This low alkaline water replaces detergents to clean dirt and oil stains on the clothes, and the low acidic water is used for sterilization during the rinsing process helping to prevent skin allergies due to chemical residues. The Haier detergent-free washing machine also protects the environment by eliminating the need for environmentally damaging detergents.
Haier's double-impeller washing machine earned the 2007 World Red Dot Design Award. Haier's double drive washing machine is the national standard for China.
Water Heaters
Haier features 12 series of water heaters including electric, solar, and natural gas. Haier's Shockproof Water Heater is a safer alternative to conventional heaters, lowering the effluent voltage of the electric water heater to below 12 V even as it uses a 220 V power supply. Haier's shockproof technology will become an international standard by the end of 2008.
Kitchen Appliances
Haier manufactures four categories of kitchen appliances including dishwashers, ventilation fans, gas stoves, and disinfection cabinets featuring more than 300 different models.
II. Brown Goods (digital and personal product)
Haier's entry into the color television industry in 1997 marked the company's move into the brown goods market. The core of Haier's brown goods unit are television sets, personal computers, and mobile phones as well as digital cameras, and MP3 players. Haier has proposed a home digital solution plan which uses the color television as a display and control center, with the personal computer as a processor, and a smart phone used as the remote control device.
Color TV
Haier's color television unit focuses on digital panel television sets. The company was responsible for producing China's first digital television set; the world's first streaming media television; and the first high-definition network streaming media television.
Haier Color TV has formed a digital technology alliance with Philips and with the German company Mize. It is also cooperating with SARFT (China's State Administration of Radio, Film, and Television) to develop a series of high-end digital panel televisions. Haier's color televisions have been presented to visiting foreign leaders as Chinese national gifts.
Mobile Phone
Haier produces both GSM and CDMA mobile phones and has developed a series of innovative products including the pen phone, the Karaoke mobile phone and the television mobile phone.
Computer
Haier has established strategic alliances with Intel, Microsoft, NVIDIA, Foxoon, and Proview. It founded the Haier/Intel Research and Development Center for Innovative Products as well as a digital high-definition laboratory featuring over 80 different product lines.
VM PC laptop was named as among the "Top three global fashion computers" in 2008 at the International Consumer Electronic Show (CES) in Las Vegas. The Boyue commercial computer, which includes 20 different patents, passed the Mean Time Between Failure (MIBF) test for 120,000 hours of stable operation as certified by the China National Computer Products Quality Supervising Test Center. Haier has won bids to provide computers to the Beijing International Airport, state banks, and government institutions.

According to the global provider of market intelligence IDC's statistics, Haier laptops are the second largest brand in China, with Haier personal computers placed fourth.
III. Client Solution Business
Haier is a provider of integrated solutions including central air conditioning systems, integrated kitchens, intelligent home appliances, supermarket display cabinets, medical freezers, U-Home solutions, and the Mitsubishi-Haier commercial air conditioner.
Haier has designed and supplied systems for both the 2004 Athens Olympic Games and the 2008 Beijing Olympic Games.
Central Air-conditioner
Haier has one of the most complete and high-tech production bases for central air conditioners in China.
At present, Haier features four categories, 10 series, and over 1000 models of commercial air conditioners including home, business, multi-user, and cold water machine systems.
Haier's central air conditioning systems have been used in the Olympic village at the 2004 Athens Games and at 23 venues for the 2008 Beijing Olympics including: The National "Birds Nest" Stadium, Beijing Fengtai Softball Field, Capital Indoor Stadium, Beijing Laoshan Velodrome, Beijing Worker's Stadium, Peking University Gymnasium, Beijing University of Technology Gymnasium, Beijing Shooting Range CTF, Beijing University of Science and Technology Gymnasium, Qingdao Olympic Sailing Center, The Comprehensive Training Building at Beijing Xuanwu Sports School, Beach Volleyball, Beijing Olympic Command Centre, National Indoor Stadium, Archery Venue, Hockey Field, Media Village, Beijing Capital International Airport, Qingdao Liuting International Airport, Tianjin Binhai International Airport, the Sponsors' Reception Centre and the Beijing Shooting Hotel.
Integrated Kitchen
Haier is Asia's largest provider of integrated kitchens and was the first manufacturer of integrated kitchens to pass ISO9001 certification.
In a 2006 survey on integrated kitchens conducted by the State Council's Development Research center, Haier topped all other brands in terms of reputation, actual sales, expected sales, and consumer satisfaction.
Interior Decoration
Haier has provided interior decoration services to the National Stadium and projects in Angola and Doha. Haier's interior decoration has passed the ISO9001 and ISO14001 Environment Control System.
Medical Equipment
Haier is a development and manufacturing base for low-temperature medical equipment. Haier's minus 86 degree centigrade ultra-low temperature refrigerator was awarded the bid for the PRC Ministry of Health's Bird Flu Prevention and Control Project. The blood refrigerator donated to the Indian Ocean Tsunami relief efforts by the Chinese Ministry of Health was exclusively provided by Haier. Haier has also won a bid to provide equipment to the AIDS Prevention Project administered by the Ministry of Health.
Intelligent Home Appliances
Haier engages in the research and development of chips for intelligent appliances, digital frequency conversion, wireless high-definition technology, audio and video decoder, network communications and technologies of UWB, Bluetooth, RF, electric power carrier wave, within an integrated global resource network. In addition, Haier has established joint development laboratories with several multinational corporations to provide innovative solutions including the smart home system, remote medical diagnosis and treatment, online grocery shopping, fault feedback intelligent security systems, and the smart hotel.
Haier owns many proprietary patents and was responsible for drafting the national standards for network home appliances which were then also submitted as international standards.
Haier launched the U-Home product in 2006 and established U-Home Labs to provide the end-user with new products and innovative network services. The U-Home is regarded as the trend for future home appliances.
"U" stands for 'ubiquitous,' which means anytime and anywhere. In other words: If you are at home, U-Home can connect you to the world; when you are in the world, your home travels with you. U-Home integrated refrigerators, air conditioners, washing machines, use the Internet, mobile communication and fixed phone networks to allow customers to communicate with their home appliances anytime anywhere and allow customers to control their home appliances and retrieve information remotely. The Haier U-Home system includes home appliance controls, lighting curtain controls, multimedia entertainment, visual talks, security alarms, environmental monitoring together in the world's first wireless-controlled network home appliance system.
IV. Equipment Components Manufacturing Group
The Equipment Components Manufacturing Group is committed to the research, design, and production of high quality components for home appliances, electronic, telecommunication, and automobile manufacturing covering more than ten sectors including molding, plastic injection, sheet metal pressing, computer boards, electric motors, color armored plates, modified plastics, powders, and printed packaging.
The unit produces a variety of plastic injection molds, metal pressing molds, and adsorption froth molds. The plastic injection mold has a production capability of 1,500 sets annually with a weight up to 40 tons.
Haier molds have been approved by the ISO9001 Quality Management System and the ISO14001 Environment Management System.
Plastic and Metal Plate Production Line
Haier's Plastic and Metal Plate production line is one of China's largest plastic processing bases. Its businesses include product development, precise plastic injection molding and post processing, and precise metal molding.
Haier Plastic and Metal Plate Production Line has been approved by the ISO9001 Quality Management System and ISO 40001.
Material Integration Production Line
Material integration researches product appearance and supplies exterior design plans for products, as well as the manufacturing and sales of color armor plates, modified plastic, plastic powder, plastic plates, condensers, and evaporators.
Electric Control Integration
Haier's electric control integration is divided into two parts: intelligent electronics and electric motors. Its businesses include remote-control units (including color televisions, DVD players, air conditioners, water heaters, remote radio frequency controllers, multifunctional remote controllers and card readers); PCBA (including refrigerators, air conditioners, and washing machines); power supply (including printers, LCD and plasma television sets) and LCD mould sets.
Haier's Electronic Control Integration unit has been approved for ISO90001 certification; 2000 system and ISO140001:2004 system, RoHS, and ESD.
V. Retailing
Haier has established its own home appliance sales channels with Haier branded stores, franchises, and village-level chain stores.
VI. Finance
Haier has tapped into the finance and real estate businesses.

Haier’s Management Philosophy and Model
Haier's global branding process combines the best in eastern and western management thinking to create a foundation for further innovation. Since its founding in 1984, Haier's unique philosophy has merged the business experience of East and West to become an international model of corporate management.
OEC Approach
The "All-around Optimized Management Approach" was Haier's first major initiative in innovative management. First implemented in 1986 and later named the "OEC Approach", this management style entails clear and comprehensive control over all company functions. The purpose of the "OEC Approach" is to achieve each day's plan, evaluate that plan, and improve upon those daily accomplishments 1% better than the day before. The "OEC Approach" has been the cornerstone of Haier's management culture for more than 20 years. In 1993, then vice premiers Zhu Rongji and Li Lanqing, together with then secretary of the CPC Shanghai Municipal Committee Wu Bangguo signed a joint directive to promote Haier's "OEC Approach" nationwide.
The "Ball-on-Slope" Theory
As part of implementing the OEC model, Haier developed the "Ball-on-the-Slope" theory. A company is akin to a ball on a slope. Two forces are needed to move the ball uphill: one to keep the ball from rolling back down the slope (business management) and the other is the force necessary to keep the ball moving upwards (the company's capacity to innovate). These two forces are key to a company's continued success.
The "Activate Shocked Fish" Theory
During Haier's Diversification Development Phase, company management proposed the concept of "Activate Shocked Fish." A 'shocked fish' is a company with good tangible assets but which has been managed poorly and faces bankruptcy. Haier would then purchase these companies and use advanced management techniques to realize and maximize a struggling firm's latent potential and turn a profit. For example, in July 1995, Haier merged with the Hongxing Electronics Company. It took less than three month for Haier management to move Hongxing from the red to the black. Haier also used mergers with struggling companies to carry out capital restructuring. Haier used intangibles such as its corporate culture and management theories to maximize the tangible assets of the merger target. This also allowed Haier to expand the scope of its business quickly while keeping overall costs low. Beginning in the early 1990s, Haier began a decade of expansion, purchasing 18 Chinese companies; 14 of those companies had combined losses of nearly 5.5 million RMB. Haier turned the struggling firms around and by the end of the decade, all 14 companies were profitable. In that same time span, Haier transformed itself from a refrigerator manufacturer to a home appliance giant featuring a diverse product line including refrigerators, freezers, air conditions, televisions, and water heaters.
Market Chain Management
Haier's expansion in both the domestic and international market tested long-standing procedures, organizational models, and human resource strategies. As a result, in 1998 Haier began a process of re-engineering which continues to this day. The objective of the re-engineering drive is to remove barriers between the company and the market, as well as those within the company between different departments, to build an "end-to-end" market chain process that operates smoothly inside and outside of the company, and turn every employee into their own individual strategic business unit (SBU). The end result is that everyone in the company is a master of corporate marketing objectives.
Individual-Goal Combination Management System
Haier's "Individual-Goal Combination" management system means that every employee is an independent and innovative SBU with the goal of achieving primacy in the marketplace. The "Individual-Goal Combination" aims at creating a competitive market target for each SBU. Zhang Ruimin's management innovations have been recognized widely by international management institutions. In 1998, Mr. Zhang was invited by the Harvard Business School (HBS) to deliver a speech on his corporate philosophies. Haier's "Activate Shocked Fish" strategy, whereby a failing company's latent potential is realized and maximized, was used as a case study by HBS. In 2000, Mr. Zhang delivered another speech to IMD in Switzerland. Haier's strategy has also been studied at numerous institutions including the University of Southern California, IMD, INSEAD, Kobe University (Japan). Haier's "Market Chain" management was included in the European Union's case study database. Haier's "Individual-Goal Combination" management sytem is currently assisting companies around the world to better manage their storage and due receivable systems

Haier in the World
Haier believes that the essence of globalization is localization. For Haier, this means a "Three-in-One" operational framework: complete localization of design, manufacture, and marketing. Haier aims to use local financing and employees to become a part of the local community while creating a global brand.
As of this year, Haier as established 61 trading companies (19 outside of China), 8 design centers (5 outside of China), 29 manufacturing facilities (24 outside of China) and 16 industrial parks (4 outside of China). In addition, the company maintains 58,800 sales outlets in over 160 countries. Haier is achieving its goal of building a global brand using the "Three-in-One" localization strategy.
Haier employs more than 50,000 people around the world, and has created 10,000 jobs outside of the PRC.

China
Haier has 12 industrial parks, five manufacturing bases and 42 trading companies in China employing more than 40,000 people. The company's products include home appliances, communications, IT, home systems, finance, and real estate. Haier is the leader in China's white goods market.
According to Zhongyikang, a marketing and consulting agency, Haier was China's largest home appliance manufacturer in 2007, with 25% total market share. The company also captured nearly 30% of the share in the high-end market.
At present, Haier's 19 product lines, including refrigerators, air conditioners, washing machines, television sets, water heaters, computers, mobile phones, and integrated home systems are listed among China's top brands. Haier's refrigerators and washing machines were in the first group of "World Famous Brands" named by the General Administration of Quality Supervision, Inspection, and Quarantine of the People's Republic of China.

Europe
Haier first entered Europe through Germany. The first imported technology used by the company came from Germany and in 1990 Haier exported 20,000 refrigerators to that country marking Haier's introduction into the European market. In addition to the The Haier Group's own trading companies, Haier also has research, design, and development centers in Italy, Holland Germany, and Denmark, as well as manufacturing facilities in Italy and OEM Factories in Romania and Ukraine. More than 96% of the staff at Haier's European operations are local employees.
Haier's products are sold in KESA, Media Market, Carrefour, Expert, and other major European retailers. The main products Haier sells in Europe are refrigerators, freezers, top-load washing machines, home air conditioners, water heaters, microwave ovens, dishwashers, television sets, computers and cell phones. * In March 2001, Haier participated in the Domotechnica International Trade Fair for household appliances held in Cologne, Germany. Haier's stand covered 1000 square meters and featured 58 new products. * On June 19, 2001, The Haier Group acquired the Italian Menigati Refrigerator Company. With the company's design and marketing centers in Milan, Haier achieved its goal of a Three-in-One operational framework in Europe, the second such framework in the world following Haier's success in the United States. * In 2002, Haier entered the Bulgarian market as the first Chinese home appliance company to sell its products in Eastern Europe. In its first year, the company captured 10% of the Bulgarian home appliance market. * In 2002, the largest home appliance magazine in the U.K., ERT reported that Haier products achieved an A+ for energy conservation. Haier's refrigerators were among the first A+-rated energy saving products introduced into the European market. * Six models of Haier refrigerators achieved European A+ standards for energy conservation in 2002. In Germany, the Netherlands, Belgium, and Luxembourg, consumers could receive a rebate of €100 for purchasing a Haier energy-efficient refrigerator. * In May 2003, Haier's products made in Italy debuted at the two largest chain stores in Romania, after which Haier began exporting products to Bulgaria, Malta, Czech Republic, Cyprus, Albania, Ukraine, and Russia. * On March 3, 2004, 5500 Haier laptops and computers arrived in France, making Haier the first Chinese company to export its own brand of computers overseas. Haier is a pioneer among China's PC brands in the international market. * In May 2004, Haier's Double Drive Automatic Washing Machines won the Gold Medal of the Concours Lepine in France, the international invention award. The "Internet-based Air Conditioners," "Oxygen enriching device for air conditioners," and "Keeping Constant Distance from Television Devices" were awarded silver medals. The Haier Group was the only home appliance producer to win a gold medal. * In July 2004, Haier Refrigerators won the German IF Design Award representing the highest achievement in the field of industrial design, out of 2293 other products from 35 countries. * In January 2005, Haier's refrigerators were selected as "best sellers" in the UK by Ethical Consumer. In Germany, Haier's top-load washing machines won a bid for the Cologne and Aachen government's purchasing plans. In Russia, Haier was awarded a contract for its 42-inch plasma televisions by the Moscow Subway Authority. * Haier's super-thin frequency conversion and super-thin high efficiency air conditioners won the German IF Design Award in 2005. * On August 31, 2007, Haier was awarded a €24 million contract to provide 100,000 computers for the Macedonian Ministry of Education, the largest European order ever received by the company. * In March, 2008, Haier's three-door refrigerators and detergent-free washing machines won the German Red Dot Award for their outstanding design.

USA
Haier opened the American Haier Industrial Park in South Carolina on April 30, 1999, marking Haier's entry into the US market. Since then, Haier has established the Haier Holding Company (US), Haier Real Estate Ltd., Haier America Trading Company based in New York, design, research and development center in Los Angeles, New York and South Carolina. More than 95% of Haier's employees in U.S. are local people.
Haier products are currently sold by Best Buy, Wal-Mart, and other top North American retailers. The main products sold in the US market include: refrigerators, freezers, the top-load washer, home air conditioners, commercial air conditioning systems, microwave ovens, dishwashers, televisions, and cell phones.
In order to satisfy the needs of local consumers, Haier has rolled out some innovative products over the years including the Michael Freezer, the Frog Television and the Computer Desk Refrigerators. The Michael Freezer was first proposed by Michael Jemal, cHaierman of the board for Haier America Trading Company. It took the Haier design team less than 17 hours to develop Michael's original proposal into a working prototype freezer. Frog televisions have become popular gifts for all occasions including Christmas, New Years, and Valentine's Day, and Haier's Computer Desk Refrigerators are a huge hit on university campuses throughout the US.
Haier's environmentally-friendly products are subsidized by the US government. Since 2007, US consumers have received rebates of $40 to $100 when they purchase Haier Double Drive washing machines. * In 1999, Haier products earned UL certification (Underwriters Laboratories Inc.) a key step in Haier's plan of international recognition for the company's products. * On April 30, 1999, Haier unveiled the America Haier Industrial Park in South Carolina, marking Haier's entry into the US market. The park covers 46 hectares with an annual production capacity of 500,000 units. Haier chose the United States to build its first industrial park outside of China, and the US was also the site of Haier's first "Three-in-One" operational framework: A design center in Los Angeles, marketing out of New York, as well as the manufacturing facility in South Carolina. * In March 2000, the first Haier refrigerator made in the USA was produced at the Industrial Park in South Carolina. * On April 5, 2001, South Carolina named a road near the Industrial Park "Haier Road" in appreciation for the company's contributions to the state economy. It is the only road in the United States named after a Chinese corporation. * In recognition of the company's contributions to the local economy, the city of Kershaw, SC, home of the Haier America Industrial Park, awarded Haier the "2001 Community Contribution Award." * In 2002, South Carolina Government granted Haier "Job Creating Award" and gave Haier the preferred tax solution on salary to show the support. The project is regarded as a model for trading trigger the investment. * In 2002, South Carolina presented Haier with an award for "Job Creation," giving the company tax incentives as a show of support. The Haier America Industrial Park is now regarded as a model for trade triggering investment. * On March 5, 2002, Haier bought the Greenwich Bank Building in mid-town Manhattan to house the company's North American headquarters: a milestone for the company as it realizes its promise in the US market. * In April 2006, Haier signed a partnership with the National Basketball Association becoming the only global appliance sponsor of the NBA, and showing Haier's determination to become, just like NBA basketball, a part of mainstream American culture. * In June 2007, Haier cooling and purifying air conditioners obtained a US patent. These units can cool on hot summer days and purify the air during the spring and autumn periods. The three major retail giants in the US are all confident about the market outlook for this design and are competing for the rights to sell the air conditioners in 2008.

South Asia
Haier entered the South Asia market in February, 2001. Following the company's ""Three-in-One" localization strategy, Haier established trading companies, manufacturing facilities, and R&D centers in India, Pakistan and Bangladesh, and an OEM manufacture in Sri Lanka. The company expanded from white goods such as refrigerators, air conditioners, washing machines, dishwashers, and microwave ovens, to the brown goods sector, adding televisions, DVD players, and mobile phones to its stable of products, while expanding the company's markets to other South Asian countries including Nepal, and Sri Lanka.
In order to satisfy consumer demands in Pakistan, Haier designed a "gown washing machine." Pakistani weather is famously hot, and Pakistanis prefer to wear soft-textured gowns, with a single family needing to wash at least ten such gowns each day. In response, Haier rolled out the "gown top-load" with a larger wash capacity and impeller. The "gown top-load" was designed specifically for Pakistani families to wash up to 12 gowns in one load with less twisting and abrasion.
Haier also designed a 'wide refrigerator' for local Pakistani consumers. Haier staff responded to Pakistani customer suggestions that the refrigerators sold were too small to accommodate Pakistani households, many of which have several generations--up to 40 people in some cases--living together and sharing one kitchen. At the same time, conventional large volume refrigerators also failed to impress. One Pakistani woman commented, "These refrigerators are larger, but also tall, and I can hardly reach the top shelf." Haier staff researched local conditions and learned from a Pakistani institute that the average height of women there is 1.57 meters, which is shorter than the average Chinese woman, concluding that end-users in Pakistan required large--but not tall----refrigerators. The solution: make the refrigerators wider! The Haier-designed wide refrigerators have since become the most popular foreign brand in the Pakistani refrigerator market. * In April 2001, Haier opened an industrial park in Pakistan. This was the second industrial park outside of China following the Haier America Industrial Park in South Carolina. Products made at the park have been sold in India, Afghanistan, the Middle East, and Africa. That same month, Haier also set up its Bangladesh manufacturing facility. * On May 6, 2002, the first Pakistani-made Haier washing machine rolled off the production line. * In October, 2004, Haier's Pakistan plant passed the ISO9001:2000 International Quality Management System. Haier was the first foreign company to obtain such certification in Pakistan's home appliance industry. This was also the first Haier plant outside of China to receive ISO9001:2000 certification. * On November 26, 2006, Haier opened the Haier Ruba Economic Zone, established under Haier's leadership. PRC President Hu Jintao was present for the official unveiling ceremony held in Lahore, Pakistan. This was not only the first of the ten economic trade cooperation zones established outside China by the PRC Ministry of Commerce. , but also the first China Special Economic Zone established by the Pakistani government. By taking advantages of preferential policies for bilateral investment and trade, including financing, streamlined export and customs procedures, tax breaks on imported equipment, infrastructure, and business services, the zone became a multinational platform for Chinese companies to enter the market in Pakistan and other South Asian nations. * On August 9, 2007, Haier purchased a refrigerator factory in India to establish the company's first manufacturing facility in that country. Haier's factory in India occupies an area of 160,000 square meters with 300 employees producing 350,000 refrigerators each year. The establishment of Haier's factory in India represented a key step in building the company's "Three-in-One" operational framework in India.
Asia-Pacific Region
Haier entered the Asia-Pacific Market in 2001 after earning its reputation in the European and North American markets. Haier has established research, design, and development centers in Osaka, Tokyo, and Seoul. Haier is represented in markets throughout the Pacific Rim including Japan, South Korea, Hong Kong, Australia, and New Zealand, selling mainly refrigerators, freezers, front-load washing machines, household air conditioners, water heaters, microwave ovens, dishwashers, TV sets, computers, mobile phones, and commercial air conditioners. * In September 2002, Haier's products made their debut in the New Zealand market. The October 2003 issue of Consumer ranked Haier washing machines first for overall performance out of the top 30 best-selling washing machines in New Zealand. * In October 2002, Haier's "Whiz Kid" washing machine and the Haier Embedded Wine Cabinet won the G-MARK, the highest honor in the design field awarded in Japan. These two products were designed specifically for Japanese consumers. "Whiz Kid" washing machines are especially popular with single young upwardly mobile Japanese. Haier's Embedded Wine Cabinet follows the Japanese trend for open kitchens. In 2003, Haier designed the "classic refrigerator" especially for single Japanese women. The small front-load washing machines with an automatic drying function—the Haier ‘washing bar'—responded to Japanese consumers' problem with large-capacity washing machines. * In 2003, Haier's "Tank" refrigerator won Japan's G-Mark Design Prize, the first Chinese refrigerator to win this award. * In January 2004, Haier became a sponsor of the Melbourne Tigers basketball team. The team subsequently changed its name to the Melbourne Haier Tigers. All players wore the Haier logo on their uniforms as The Haier Group became the first Chinese company to sponsor a foreign sports team. In April 2004, Andrew Gates, captain of the Melbourne Haier Tigers, signed a contract with the company to become a spokesperson for Haier brand laptops. * In November 2004, Three of Haier's refrigerators were awarded the "Top Energy Saver Award" among 13 refrigerators so named by Australia's state-authorized certification organization and far surpassed Australia's national energy-saving standard. * On October 27, 2006, The Haier Group signed an agreement with Sanyo Company, Ltd. in Osaka to establish the Haier Sanyo Co., Ltd. joint venture.
Asean
Haier entered the ASEAN market in October, 1999. The company now has industrial parks, manufacturing facilities, and trading companies throughout the ASEAN region and Haier products are sold in Thailand, Indonesia, Malaysia, Singapore, and Vietnam. * In April 2007, Haier purchased the Thailand Refrigerator Factory from Sanyo, making Haier the second largest producer of refrigerators in Thailand. Haier has plans to become the top manufacturer of refrigerators in the Thai market by 2010. Haier's production facilities in Thailand not only meet the demands of the Thai market but are also sold throughout the ASEAN countries, the Pacific Rim, and even Australia.
Middle East and Africa
In 1993, Haier began selling refrigerators in the Middle East and African markets. At present, Haier sells refrigerators, freezers, drum and top-load washing machines, air conditioners, microwave ovens, television sets, computers, mobile phones, integrated kitchen appliances, dish washers, water heaters and other products in more than 30 countries in the Middle East, Africa and West Asia, including Saudi Arabia, United Arab Emirates, Jordan, Oman, Yemen, Turkey, Qatar, Bahrain, Egypt, Algeria, Morocco, Kenya, Tanzania, Sudan, Cote d'Ivoire, Gabon, Tunis, Nigeria, South Africa, Mali, Benin, Ghana, Gambia, Mauritius, Mozambique, Angola, and the Congo. Haier has established industrial parks, manufacturing facilities, and trading companies throughout the Middle East and Africa. In order to meet special requirements suggested by Middle East consumers, Haier developed high-capacity washing machines and refrigerators; air conditioners designed to handle tropical conditions; and Arabic-enabled television,. * In May 2001, Haier set up a factory in Nigeria to introduce Haier's technology to that country. Products manufactured at the facility include air conditioners, refrigerators, and freezers. * At the end of 2001, Haier established the Haier Middle East Trading Company and built the Haier Middle East Electrical Appliance Factory. * In January 2002, Haier formed a joint venture in Tunis to produce refrigerators, air conditioners, washing machines, and other white goods. The factory covers an area of 10,000 square meters and has an annual capacity of 300,000 units. * In October 2003, the first television and washing machine produced by Haier Middle East Electrical Appliance Factory came off the line. In December, Haier's Jordanian factory began air conditioner production. Haier was then able took advantage of preferential tariffs among Arab countries to enter new markets previously not open to Haier products. * In May 2004, Saudi Arabia issued new standards for energy efficiency. Haier's high efficiency energy-saving air conditioner was in compliance with the new Saudi Arabian Standards Association (SASO) standard and became the first Chinese air conditioner manufacturer to obtain the SASO Certification following implementation of the new energy efficiency standard. * In January 2005, Haier introduced a freezer which can maintain sub-freezing temperatures for up to 100 hours without electricity into the Nigerian market. * On March 1, 2005, Haier Middle East Industrial Park opened in Amman, the capital of Jordan. The Haier Middle East Industrial Park occupies an area of 140,000 square meters with a production capacity of over 1 million units annually. It is the largest home appliance industrial park in the Middle East. The Haier Middle East Industrial Park will become a part of the company's "Three-in-One" operational framework for the region and the platform for Haier operations in the Middle East.