Little Swan And Haier's Competitive Strategy Analysis

The absence of clear strategy planning is a serious and common problem in many domestic companies. This makes them blind followers, a perfect example of the sheep herd phenomenon, when dealing with certain aspects of company development and marketing competition. This essay analyses the factual cases of two successful companies in the domestic home appliance industry, emphasizing their competitive strategies. The fast-developing home appliance industry in China has made great progress in recent years. It has many characteristics such as stiff competition, increasing brand concentration, and stronger domestic brands. The washing machine market is a very good example of this. New products and competitive marketing activities continue to develop at a fast pace, resulting in a fast changing and competitive market. In this field which has very close relation with people's daily life, Qingdao Haier Group Company and Wuxi Little Swan Group Company are both active and excellent companies. Not only are their products popular with the customers, but their company culture and management also having their own styles and characteristics. They have many common traits as well as differences in the way they developed and in their strategy thinking. As competitors, they compete fiercely in many home appliance segment markets. Especially in the washing machine market where their competitive power is nearly fifty-fifty and we could see their strategic thinking more clearly. Little Swan is famous for it's stability in operations. It takes differentiation and overall cost leadership as it's competitive strategy, gaining advantage from both of them. As a result, Little Swan supplies customers with high quality products, earning large profits through low operation costs. Haier takes another way. It makes full use of the differentiation strategy. Its competitive advantage is mainly due to the brand differentiation not product differentiation. Because of this, Haier's diversification operations are implemented very successfully. It is difficult to say which strategy is better. It involves many factors such as differences in the companies, competitive situation, company culture and even geographic cultures. Diversification operation is the key point in both companies' strategy management. Haier's big successes in the refrigerator, washing machine, air conditioner fields and Little Swan's concentric diversification strategy that focuses on washing technology have set up successful models for us in diversification operations. We could say that diversification operations are a kind of strategy behavior and a very important factor in a company's development. But whether a company should choose it or not, depends on the needs of that company and its management capabilities. Marketing orientation is another important problem. Adapting to their different competitive strategies, Haier and Little Swan uses brand-drawing and product-drawing marketing models respectly. Many domestic home appliance companies are using Original Equipment Manufacturing (OEM) to produce their products, Little Swan comes under this category. Through this kind of strategy alliance with many world-famous multi-national home appliance companies, Little Swan has obtained many benefits, but at the same time, it also faces some potential threats. To be successful in implementing strategy planning, a company should keep renewing its products, technology, marketing, organization etc. This can cultivate and increase the company's core competence, as well as the durable competitive advantages.