Founded in China, the Haier Group is today the world’s leading brand of major household appliances and is now transforming from a traditional manufacturer to an open entrepreneurship platform (Haier Website, 2017). Conducting a PESTEL Analysis on Haier, we can determine how external forces can act on Haier and affect their business in local and international markets.

Political Factors

Considering the local market, China’s government is always interested in empowering their local business and for that they have some set of rules and regulations for different industries. Industries have to make sure they fulfill the needs of these laws so that they can grow their business. Other than that, in the international markets, Haier has to comply with different laws including import, export laws, tariffs, trade laws, employment laws, copyrights and other laws. All these requirements come with a cost for Haier, but it returns revenues in the long term. At times, if the political position of a certain country is unstable, it affects the business and growth of Haier in that country.

Economic Factors

With Haier’s operations worldwide, it can be affected by the economic conditions of a certain country. For instance, if a country has declining economic growth and going towards inflation, we can foresee that Haier’s sales will be affected because people will not have the power to buy their products. However, if a country has stable economy, Haier will have more opportunities to expand and make more sales. Factors like trade laws, exchange rates and price fluctuations can affect Haier’s business in different countries.

Socio-cultural Factors

If a certain country’s population is hesitant to purchase foreign products (products from China, in Haier’s case), then that will be a huge problem for Haier as they have to introduce acceptability for their products in that country and might also face losses in the start. Many Asian brands are considered cheap and poor quality and this perception can affect their business in some countries. Other factors that can affect Haier’s business include the lifestyles that majority of the population identifies with, the education level, population distribution, and buying habits can affect the sales of Haier in a positive or a negative way.

Technological Factors

Haier’s products are completely associated with technology, and Haier has to always keep on researching and developing their products to keep up with the technology and keep their growing rate high. So if the customers of a certain country are expecting higher technology and convenience at their desired price, Haier should be able to deliver that technology to keep their market safe. Also to keep competing with their competitors, it is important they do not lag behind in terms of technology.

Environmental Factors

With the recent awareness for environment for people, it is important for companies to keep on contributing to the environment as well as change their previous methods so that they are not damaging to the environment so that their brand image is not damaged. So in the international markets, Haier should know the rules for environment protection and comply with them in order to avoid any law suits. Moreover, CSR activities of all kinds can also build up their image and contribute positively towards their business.

Legal Factors

In order to keep their business running smoothly in different countries, Haier has to follow rules and regulations of different countries so that their requirements are fulfilled. These include patents and copyrights as well; this contributes towards the security and future of their business in a certain country.

References

Retrieved October 10, 2017, from http://www.haier.net/en/about_haier/
Management Asia-PacificChina, J. 03 2012 S. ‘Thanks, But No Thanks’ to Made in China? Retrieved October 10, 2017, from http://knowledge.wharton.upenn.edu/article/thanks-but-no-thanks-to-made-in-china-2/

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