1、Samsung010620BJ-HaierWhite Goods Competitor Assessment Haier Samsung Electronics China(SEC China)August,2001CONFIDENTIALThis report is solely for the use of client personnel.No part of it may be circulated,quoted,or reproduced for distribution outside the client organization without prior written ap
2、proval from McKinsey&Company.This material was used by McKinsey&Company during an oral presentation;it is not a complete record of the discussion.Samsung010620BJ-Haier1CONTENTS 1.Background informationLocationStarting yearIPO date Number of employeesBrand valueMarket shareSales revenue Equity struct
3、ureEra analysis4.Value chain strategy5.Organization and ownership6.Financial performanceFocus onMarketing,advertising and promotionDistribution(channel and sales force)Organization structureSales Profit 2.Strategy 3.Product/market Corporate strategyKey product offeringsMarket position Key customersV
4、alue propositionGeographic focusPricingSamsung010620BJ-Haier2CONTENTS 1.Background informationLocationStarting yearIPO date Number of employeesBrand valueMarket shareSales revenue Equity structureEra analysis4.Value chain strategy5.Organization and ownership6.Financial performanceFocus onMarketing,a
5、dvertising and promotionDistribution(channel and sales force)Organization structureSales Profit 2.Strategy 3.Product/market Corporate strategyKey product offeringsMarket position Key customersValue propositionGeographic focusPricingSamsung010620BJ-Haier3BACKGROUND INFORMATION Source:Annual report;an
6、alyst reports;web site;Yuegang Information Daily Location:QingdaoStarting year:1984IPO date:Listed refrigerator business in November,1993Brand value(2000):RMB 30 billionMarket share:Refrigerator:31%;Washing machine:29%;Air Conditioner:20%;Microwave:2%Number of employees:30,000Equity structure:Key sh
7、areholdersPercentageHaier GroupHaier Electronic International Co,.Ltd 31.44%17.93%Sales Revenue(2000):RMB 40.6 billionSamsung010620BJ-Haier4HAIERs DEVELOPMENT WENT THROUGH THREE STAGESSource:Haiers website,literature searchBrandingDiversification and expansionGlobalization1984-19911992-19981998-Key
8、initiativeBuilt a strong brand name in refrigerators through a well deve-loped TQC systemDiversified the product portfolio to avoid having all the com-panys eggs in one basket through mer-gers and acquisitionsTo build an international brand name Aspires to become fortune 500Key resultsWon the first
9、prize in the most favorite light industry products refrigerators”5 years in a rowWon the state prize for quality managementPresented with the customer satisfaction cup by Chinas customer satisfaction movement congressAcquired 14 enterprises under the eating dormant fish strategy.Successfully turned
10、these businesses around by leveraging Haiers brand and introducing Haiers OEC managementExpanded product portfolio from 1 product to over 9,000 products in 42 categoriesSold products to over 160 countries and regions and established more than 38,000 sales outlets across the worldSamsung010620BJ-Haie
11、r5Haiers brand value in 2000:RMB 30 billionHAIERs BRAND BECAME TREMENDOUS INTANGIBLE ASSETSource:Literature search,web siteExamples of Haiers successful investment with its brandAcquired Qingdao Red Star Electronic Company and changed its washing machines brand into Haier.With the help of OEC manage
12、ment,quickly turned the company into a profitable business.Haier became the No.1 brand for washing machine the next year and enjoyed the highest market shareAcquired controlling shares of Shunde Washing Machine Factory with Haier brand and quickly turned around the businessTook controlling shares of
13、 Hangzhou Haier Electronic Company with Haier brand and developed Haier series of color TVSamsung010620BJ-Haier6 Source:WebsiteKitchen appliances RefrigeratorFreezerMicrowaveGas range Small appliances Electric ironVacuum cleaner Ventilating appliancesAir conditionerRange hoodAir purifier Cleaning ap
14、pliancesWashing machineElectric water heater HAIER OFFERS BROAD RANGE OF PRODUCTS Haiers key product offerings Mobile handset Telecommunications Brown goods Color TVVCDTelephonePCPDA ITSamsung010620BJ-Haier7HAIER HAS SUCCESSFULLY EXPANDED INTO GLOBAL MARKETSource:Annual reportDevelop global distribu
15、tion network62 distributors and around 38,000 outlets across the worldSet up production facilities overseasSet up plants in Indonesia,Philippines,Malaysia,East Europe,US1999 exportsRefrigerator:568,000 unitsAir conditioner:200,000 unitsWashing machine:190,000 unitsRefrigerator market share in US(200
16、0)124 L:30.1%183-266L:35.88%Samsung010620BJ-Haier8CONTENTS 1.Background informationLocationStarting yearIPO date Number of employeesBrand valueMarket shareSales revenue Equity structureEra analysis4.Value chain strategy5.Organization and ownership6.Financial performanceFocus onMarketing,advertising
17、and promotionDistribution(channel and sales force)Organization structureSales Profit 2.Strategy 3.Product/market Corporate strategyKey product offeringsMarket position Key customersValue propositionGeographic focusPricingSamsung010620BJ-Haier9HAIERs STRATEGIC FOCUS IN 2001 Source:Haiers annual repor
18、t Value war instead of price warFocus on improving technical contents in products Produce individualized productsGlobal competitive advantageArrange all business processes around order flow Build competitive advantage in quality,cost and lead time through OEC management Product development Develop p
19、roducts that are tailored for different countries and regions Improve technology in large capacity refrigerators and network refrigerators Improve production capability for special refrigerators Human resource Provide rigorous trainings to employees and develop them into industry experts and managem
20、ent experts ServiceBuild extensive and exclusive service network to ensure strong reputation of being a service leaderSamsung010620BJ-Haier10CONTENTS 1.Background informationLocationStarting yearIPO date Number of employeesBrand valueMarket shareSales revenue Equity structureEra analysis4.Value chai
21、n strategy5.Organization and ownership6.Financial performanceFocus onMarketing,advertising and promotionDistribution(channel and sales force)Organization structureSales Profit 2.Strategy 3.Product/market Corporate strategyKey product offeringsMarket position Key customersValue propositionGeographic
22、focusPricingSamsung010620BJ-Haier11HAIERSs KEY WHITE GOODS OFFERING Source:Literature searchWhite goods Wide range of typesSide-by-side Refrigerator Washing machine Air conditioner Microwave Product type Double chamberDrum Pulsator WindowSplit Packaged Central airGrill and non-grillMechanic and elec
23、tronicSamsung010620BJ-Haier12HAIER WHITE GOODS MARKET SHARE,2000 Refrigerator Washing machine Air conditioner Percent Source:LIICMicrowave3129210.2Samsung010620BJ-Haier13*Rongsheng and Kelon combined Source:SINO-MR,GfK,LIIC100%=1998Others 1999200037.415.58.72.732.435.713.88.25.95.728.030.912.38.610.
24、08.826.1Samsung Electrolux Meiling Kelon*Haier Siemens 8.69.19.4Haier and Kelon are the leading players.However,their market shares are decreasing Although latecomers to the market,Electrolux and Siemens are quickly building up their positions by focusing on mid-to high-end and high-end markets Comp
25、ared to other MNC players,Samsungs growth in the market is rather slow Millions units,percent Refrigerator market share of major players in major cities4.5-6.215.6270.7101.23.9-6.9-5.0CAGR(98-00)PercentSamsungHaier/Kelon/Meiling Siemens/Electrolux2.63.32.70.7HAIER IS A LEADING PLAYER IN MOST OF WHIT
26、E GOODS MARKETSREFRIGERATOR EXAMPLESamsung010620BJ-Haier14*Kelon and Rongsheng combined Source:SINO-MR,GfK,LIIC100%=North China Others Samsung Electrolux Meiling Kelon*Haier Siemens 2.33.50.5Electrolux and Siemens are doing particularly well in Southwest Apart from Southwest,MNC players are doing be
27、tter in east China and South China,relatively more affluent areas Samsung is relatively strong in East China and South China North East East China Central South South West North West 0.90.71.432.011.68.59.85.31.730.836.616.111.57.65.90.421.926.06.29.79.48.210.130.331.014.36.99.710.53.324.420.411.09.
28、819.218.50.320.833.818.29.68.60.124.15.6Refrigerator market share in major cities by geography,2000Million units,percentSamsungHaier/Kelon/Meiling Siemens/ElectroluxHAIER HAS DEMONSTRATED STRENGTH IN MOST GEOGRAPHIC REGIONSREFRIGERATOR EXAMPLESamsung010620BJ-Haier15*Another Kelons brand Source:SINO-
29、MR,GfK,LIIC100%=4,0002.01.92.024.112.51.217.819.624.80016.012.60.17.74.145.713.828.316.50.18.510.031.51.93.447.39.71.15.98.87.21.318.736.32.03.82.919.326.09.40.429.80.14.34.70.348.10.312.5Rongsheng*0Refrigerator market share in major cities by price band,2000Million units,percentElectroluxKelon/Rong
30、shengSiemensSamsungHAIERS PRODUCTS COVER ALMOST ALL PRICE SEGMENTSREFRIGERATOR EXAMPLESamsung010620BJ-Haier16*Another Kelons brand Source:SINO-MR,GfK,LIIC100%=100LOthers Samsung Electrolux Meiling Kelon*Haier Siemens 0.21.00.7Haier is leading in most markets Electrolux and Siemens have strong positi
31、on in mid-to-large capacity markets Samsung is very strong in small capacity(300L2.60.03Rongsheng*40.47.8036.90.119.851.213.401.49.602.821.424.823.30.59.07.76.51.127.129.89.10.813.75.27.54.229.735.511.70.85.911.010.12.922.123.45.41.17.824.12.61.234.417.28.55.25.013.730.419.90.125.1019.02.61.152.00.2
32、0Refrigerator market share in major cities by product type,2000SamsungHaier/Rongsheng/Kelon Siemens/ElectroluxHAIERS PRODUCTS COVER BROAD RANGE OF TYPESREFRIGERATOR EXAMPLESamsung010620BJ-Haier17CONTENTS 1.Background informationLocationStarting yearIPO date Number of employeesBrand valueMarket share
33、Sales revenue Equity structureEra analysis4.Value chain strategy5.Organization and ownership6.Financial performanceFocus onMarketing,advertising and promotionDistribution(channel and sales force)Organization structureSales Profit 2.Strategy 3.Product/market Corporate strategyKey product offeringsMar
34、ket position Key customersValue propositionGeographic focusPricingSamsung010620BJ-Haier18APART FROM STRONG BRAND,HAIERS KEY STRENGTHS LIE IN STRONG ATTENTION TO R&D,SUCCESSFUL SUPPLY CHAIN AND LOGISTICS MANAGEMENT,WIDE DISTRIBUTION NETWORKS AND QUALITY AFTER-SALES SERVICES Key strengths R&DLeading t
35、echnologies in high efficiency,inverter,energy-saving,environmental protection,etc.Strong R&D resource(R&D spending accounts for 45%of revenue)Quick commercialization of new technologies(75%commercialization rate)Product design reflecting individualization Founded Haier Central Institute of Research
36、 with partners from US,Japan,Germany,etc.Set up 48 R&D entities world wide Set up new product experiment center in each key business unit Build technology alliance with 15 research institutes including Philips,C-Mold and Netscreen Recent development Logistics Sophisticated supply chain management an
37、d highly efficient logistics management Launched“I design my own refrigerator marketing strategy Built ERP,BPP and CRM systems Built Chinas largest and most advanced logistics center in Qingdao Sales and marketing Strong brand recognition Invested RMB 0.5 billion in A&P Distribution Highly efficient
38、 distribution network(42 distribution centers,and over 9,000 sales outlets)Improved delivery time to 8 hours in hub cities,24 hours in surrounding areas,4 days anywhere in the country After-sales service Strong reputation in offering excellent after-sales service Continue promote the concept custome
39、rs are always rightSamsung010620BJ-Haier19HAIER LOGISTICS HAS GAINED RICH EXPERIENCE IN SOPHISTICATED SUPPLY CHAIN MANAGEMENT Source:Literature researchOptimized supply chain managementHaiers operating objectiveZero inventoryZero distanceZero working capitalHaier logistics management model:“one-flow
40、 and three-net”One flow:order information flowThree netGlobal supplier resource networkGlobal customer resource networkIT networkCurrent capabilitiesHaiers order flow6,000 orders/month15,000 sourcing partsSupplier base978 supplier(58%lower than before)20%international suppliers include GE,Emmerson,e
41、tc.Internet usage 100%purchasing orders online20%online paymentPurchasing lead time 3 days comparing with 10 days beforeSamsung010620BJ-Haier20HAIERs DISTRIBUTION CENTER HAS A LARGE GEOGRAPHY COVERAGE IN CHINAHaiers distribution networkHaier logistics center(Qingdao)42 distribu-tion centers1,550 spe
42、cialty stores and 9,000 sales outletsDistribution network in ChinaInternational presence:DG for air-con related products at Hamburger Harbor,Germany,partnering with HHLAShanghaiBeijingWith established network,Haier has promised a competitive time of delivery8 hours within core cities24 hours in adja
43、cent areas of core cities4 days for nationwide distributionTransportation equipment:over 10,000 trucks in China Haiers facilitiesSamsung010620BJ-Haier21HAIER HAS A DISTINCTIVE DISTRIBUTION APPROACH WHICH IS HEAVILY FOCUSING ON DIRECT RETAIL SALES FOR BASE AND HUB CITIES.Source:Field interview;McKins
44、ey analysisSpecialty shoresFirst tier citySecond tier cityThird tier cityHaier shop-in-shopsRetailers in first tier cities Retailers in some large second tier cities Specialty store Haier shop in shops Retailers in second tier cities Specialty store Haier shop in shops Retailers in third tier cities
45、 Specialty storesHaier A/C sales Co.Haier sales branches in small second tier citiesWholesales in some third tier citiesHaier sales center in first tier citiesHaier sales center in some large second tier citiesHaier sales centers in first and second tier citiesHaier sales branches in big third tier
46、citiesEast regionNorth regionWest regionSouth regionSamsung010620BJ-Haier22CONTENTS 1.Background informationLocationStarting yearIPO date Number of employeesBrand valueMarket shareSales revenue Equity structureEra analysis4.Value chain strategy5.Organization and ownership6.Financial performanceFocus
47、 onMarketing,advertising and promotionDistribution(channel and sales force)Organization structureSales Profit 2.Strategy 3.Product/market Corporate strategyKey product offeringsMarket position Key customersValue propositionGeographic focusPricingSamsung010620BJ-Haier23HAIERS ORGANIZATION STRUCTUREBO
48、DCEOPresidentExecutive VPVPVPPromotionProductFunctionOver-seas Prom-otionBusi-NessFlowProm-otionLogis-TicsProm-otionCashFlowProm-otionRefri-geratorBGA/C BGBusi-nessA/CBGFree-zerBGWarshingMachineBGITBGTech-nicalEquip-mentBGImme-diateBUsTech-nologyCenterPlann-ing AndDevel-opmentCenterH/RDevel-opmentCe
49、nterLegalCenterCorpo-rateCultureCenterSecu-rityCenterAmerica BUEast ChinaPurcha-sing BUCash In-flow BUEurope BUMiddle-East BUAsia-Pacific BUEast ChinaEastChinaStorage&Transp-ortation BUCash out-flow BU Accoun-tingBUAsset audix-Ing BURefrig-erator BUA/CBUHefeiBUMitsubi-Shi BUWuhanBUW/MBUHefei W/MShun
50、deHaierElectro-nicsBUHefeiElectro-nicsHaimei BUTourism BUSuper Market BUTelecom BUComputer BUDish washer BUElectric Heating BUMold BUCapital Operation BUBiology BUTest&Measurement BU.OverseasRefriger-ator BUGuizhouHaierSpecialRefriger-ator BUU.S.HaierExperi-mentBUEquip-mentBUEnergyBUSpecialSteelBUSo
