CC BY
58
УДК 339.9
INTEGRATION STRATEGY ANALYSIS OF "HAIER COMPANY"
Z. Minghui Scientific Supervisor - M. N. Chuvashova
Reshetnev Siberian State University of Science and Technology 31, Krasnoyarsky Rabochy Av., Krasnoyarsk, 660037, Russian Federation E-mail: 420829702@ qq.com
The integration strategy analyzes the advantages of products, technology, and market. Through the strategy of integration, enterprises can effectively scale up production, achieve economies of scale, reduce competitors and perform other tasks, improve the competitive position of enterprises in the market and achieve rapid development of enterprises.
Keywords: integration strategy, Haier company, enterprise.
АНАЛИЗ ИНТЕГРАЦИОННОЙ СТРАТЕГИИ «HAIER COMPANY»
Ч. Минхуэй Научный руководитель - М. Н. Чувашова
Сибирский государственный университет науки и технологий имени академика М. Ф. Решетнева
Российская Федерация, 660037, г. Красноярск, просп. им. газ. «Красноярский рабочий», 31
E-mall: 1420829702@ qq.com
Стратегия интеграции анализирует преимущества продуктов, технологии, рынка. Посредством стратегии интеграции предприятия могут эффективно расширять масштабы производства, достигать эффекта масштаба, сокращать конкурентов и выполнять другие задачи, улучшать конкурентные позиции предприятий на рынке и добиваться быстрого развития предприятий.
Ключевые слова: интеграционная стратегия, компания «Hair».
Enterprises can effectively achieve economies of scale and quickly acquire complementary resources and capabilities. However, at the same time, the integration strategy also has some risks. Taking Haier electric appliances as an example, this paper introduces the horizontal integration strategy in detail through the reasons of Haier's merger and acquisition.
The integration strategy is beneficial to improve operating efficiency, achieve economies of scale, enhance control or obtain some degree of monopoly. However, there are also difficulties in getting out of the industry, complex management, and possibly unbalanced ability, which are not conducive to technology and product research and development risks [1]. There are two main types of integration: vertical integration and horizontal integration.
Horizontal integration strategy, also known as horizontal integration strategy, refers to a strategy of combining with enterprises in the same industry in order to expand the production scale, reduce costs, consolidate the market position of enterprises, improve the competitive advantage of enterprises, and enhance the strength of enterprises. The essence is the concentration of capital in the same industry and sector. The purpose is to expand the scale, reduce product costs and consolidate the market position. International operation is a form of horizontal integration. The horizontal integration strategy applies the criterion when the scale expansion may provide the very big competitive advantage. A business has the capital and talent needed to manage a larger business.
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Advantages and disadvantages of horizontal integration strategy: by adopting horizontal integration strategy, enterprises can effectively achieve economies of scale and quickly acquire complementary resources and capabilities. In addition, through acquisition or cooperation, enterprises can effectively establish a fixed relationship with customers, curb competitors' expansion intentions, and maintain their competitive position and competitive dominance [2].
Horizontal integration strategy also has some risks. For example, the huge production capacity generated by excessive expansion puts forward higher requirements on the scale of market demand and the sales capacity of enterprises [3]. At the same time, there are some risks of technology diffusion in some horizontal integration strategies such as cooperation strategies. In addition, organizational barriers are also one of the risks faced by the horizontal integration strategy, such as "big enterprise disease" and the phenomenon of cultural in integration in mergers and acquisitions.
For example, since 1991, Haier successively acquired more than 10 large and medium-sized enterprises, such as the former Qingdao air conditioner factory, refrigerator factory, Wuhan Xidao, Hongxing electric appliance company, etc., and the group's assets increased rapidly from tens of millions of yuan to 3.9 billion Yuan, becoming the first oversize household appliance enterprise in China. Among them, Haier believes that red star is the most successful merger and acquisition, so the case study here mainly takes it as the object, and part of the content involves Haier's merger, acquisition, and integration of shunned Ed. On July 4, 1995, Qingdao Hongxing electric appliance co., LTD was renamed Qingdao Haier washing machine co. [4]. LTD after it was incorporated into Haier group as a whole, thus making it the second washing machine subsidiary of Haier group after Haier merlot washing machine co., LTD.A series of consolidation activities followed, which Haier itself described as "activating shock fish with corporate culture". Some data here are quite convincing. In the third month after the merger and acquisition of Hongxing (September 1995), the company made a profit of 20,000 yuan, 76,000 yuan in October, more than 100,000 yuan in November, and more than 1.5 million yuan in December, showing a better and better development trend. According to the statistics of the national authority, the sales volume of washing machine of this company has risen from the 7th place in July 1995 to the 5th place at the end of 1995. By the end of December, the company had exported 82,000 washing machines in 1995 and earned 12.3 million us dollars, ranking first in the washing machine industry in China. In July 1996, the original company had completely ceased production. From May 28, 1997, shunde haier appliance co., ltd. was officially established, and by the end of 1997, it had completed the production of 100,000 units and realized the profit of 2.6 million yuan [5].
Horizontal mergers and acquisitions of enterprises are usually due to the following reasons:
1. Operating synergies. That is to say, the synergistic effect that is conducive to the realization of integrated operation of enterprises through merger and acquisition activities. The so-called synergistic effect means that the overall benefit of enterprises after merger and acquisition exceeds the sum of the benefits of original independent enterprises, namely "1, 1, 2". The most obvious effect of merger and acquisition on enterprise efficiency is the achievement of economies of scale, including factory economies of scale and enterprise economies of scale.
2. Motivation for Enterprise Development. Mergers and acquisitions tend to be more effective in expanding productive capacity than new forms of in-house investment. Because M & A may lower the barriers to enter new industries, new markets, or reduce the risks and costs of enterprise development; it may also gain experience-cost curve effect.
3. Market share effect. Through mergers and acquisitions, the enterprise's market share expands and its ability to control the market increases, enabling the enterprise to obtain some form of monopoly it can bring the monopoly profit and the competitive advantage to the enterprise. One of the most important tasks after the horizontal merger is to integrate all aspects of the merged enterprise. In other words, in the case of unsuccessful integration, often cannot achieve these goals [6].
Below, we analyze how Haier obtains these effects through the horizontal merger. From a business point of view, this is a good merger and acquisition in the same industry, region. At the same time in the product line complementary Haier more than 700,000 sets of drum-based, relatively simple product structure to expand their market share in washing machines, had to adjust the product mix to expand capacity, and Red Star was what Zhang Ruimin called a "shock fish" — good hardware, bad software. It was the first domestic largest double-barrel washing machine production enterprises, but Haier did not
go directly to the product line but pay attention to do some basic, guiding work. This is where Haier can excel and where integration is key. These are the important foundation for Haier to obtain the management coordination, at the same time, the integration after the merger is the key to obtain the management coordination. Among them, Haier's vision and strategic integration of Red Star provide guidance for synergy, in the operating mechanism and social capital to create integration for horizontal integration support.
References
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3. Zhou has a heavy responsibility. Horizontal integration, Technology Spillover and innovation of leading firms in global value chains// Sankei Review. 2018. Vol. 03. P. 89-96.
4. Li Rou. Integrated Management System analysis of Enterprise Strategic Planning//Modern econo mic information. 2017. Vol. 17. P. 68 -72.
5. Wu Zhipeng. Look at the horizontal development of current enterprise from Alibaba's acquisition of KFC. Management and technology of small and medium-sized enterprises (mid-century). 2017. Vol. 03. P. 151-153.
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© Minghui Z., 2019.
