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CHAPTER-I EXECUTIVE SUMMARY
In these days of modern living, Home Appliances are vital to the development of any modern economy and this industry is considered to be part of the backbone of the country. The project report also gives us an idea about the total amount of fixed assets that are depreciated to their 95% of acquisition value. It also concentrates on physical investigation of the Fixed Assets available in the Haier Plant to verify whether they are in working condition. The level of per capita increases socio-economic development and living standards of the people in any country. It is a product of a large and technologically complex industry having strong forward and backward linkages in terms of material flow and income generation. All major industrial economies are characterized by the existence of a strong Home Appliances industry and the growth of many of these economies has been largely shaped by the strength of their Home Appliances industries in their initial stages of development. This Project gave me a great learning experience and at the same time it gave me enough scope to test and improve my analytical ability. The analysis and advice presented in this Project Report entitled as ?Financial Savings Through Disposal of Idle Fixed Assets ?is based on the research analysis done and also having a survey of the fixed asset in the company premises. The project report comprises of identification of those fixed assets, which are idle and not used in the production process as they are in broken condition or their installation cost is very high. The report also gives knowledge about those fixed assets, which are costing high on maintenance and repairs and are frequently in the maintenance department. This Project as a whole can be divided into two parts. The first part gives an insight about the different Fixed Assets and the accounting of the fixed assets. The need and procedure for the disposal of fixed assets is also mentioned in this project. The project helps us to understand how to make Financial Savings through proper Management of the Fixed Assets. The proper management includes acquisition of fixed assets, its replacement and disposal after a stipulated period. The financial savings can be made by reducing the costs in relation to the fixed assets such as depreciation, repairs and maintenance, operating cost, etc. The project also talks about the accounting standards by ICAI namely AS-10 accounting of Fixed Assets and AS-28 Impairment of the Fixed Assets. The second part of the Project consists of research and analysis to find out whether there is any need to dispose of the fixed assets and investigation to find out which fixed assets can be disposed and which need a replacement.
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INTERNSHIP REPORT CHAPTER-II Introduction
1. Profile of The Industry Haier Group
The Haier Group was founded in 1984 with headquarters in Qingdao, Shandong Province, PRC. In 1984, Haier produced only a single model of refrigerator, today it is one of the world‘s leading white goods home appliance manufacturers. Under the leadership of Chairman and CEO Zhang Ruimin, Haier manufactures home appliances in over 15,100 different specifications under 96 categories. Haier products are now sold in over 100 countries around the globe. Haier has over 240 subsidiary companies, over 110 design centers, plants and trading companies and over 50,000 employees throughout the world. Hailer‘s focused industries include technology research, manufacturing, trade and financial services. The global revenue of Haier for 2005 was RMB 103.4 billion. Haier Electronics Group Co., Ltd. (HKG: 1169), a subsidiary of Haier Group, is listed on the Main Board of the Stock Exchange of Hong Kong. Qingdao Haier Co., Ltd. (SHA: 600690), also a Haier subsidiary, is listed on the Shanghai Stock Exchange. On 12 August, 2005, Haier signed an agreement with Beijing Organizing Committee for the Olympic Games (BOCOG) in Qingdao to become the official sponsor of the 2008 Beijing Olympic Games for white goods home appliances.
History of Haier: 1984-1991:
1990-01-01 In 1990, Haier passed the U.S. UL Certification, marking the commencement of Haier‘s global strategy. In 1990, Haier won honors of Business Management Golden Horse Prize and National Quality Management Prize, which laid a solid foundation for its future development. In June of 1989, the market was seriously impacted by the political disturbance. However, instead of suffering a loss, the shopping rush for
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Haier refrigerators had seen no signs of cooling down despite Haier‘s 12% price increase. Haier won costumers by its high-quality products and services.
1986-01-01
Relying on its high quality, Haier refrigerators brought about a shopping rush in Beijing, Shanghai, and Shenyang. In 1986, former West Germany ambassador to China Pei Peiyi made a special trip from Beijing to Qingdao General Refrigerator Factory. Mr. Pei was deeply impressed by Haier‘s efficient operation under the leadership of the young Director Zhang Ruimin. In the National Refrigerators Appraisal in December of 1988, Haier scored the highest and won the first gold medal in China‘s refrigerator history. Since then, Haier has acquired the leading position in China‘s refrigerator industry. In 1985, Zhang received letters from some consumers complaining about quality problems of Haier refrigerator. Then, in order to arouse quality awareness among the employees, Zhang broke 76 under-level Haier refrigerators, which was afterwards seen as the warning bell of quality in Haier‘s history. After profound analysis on the refrigerator market of fierce competition, Zhang Ruimin proposed the principle of ?a late starter with high starting point? and formulated Haier‘s brand strategy.
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1992-98:
1997-09-01 In September of 1997, with its entering color TV industry as the initiative, Haier went into the industries of black household appliances and information household appliances. And meanwhile, by way of low cost expansion, Haier merged 18 enterprises, such as Shunde Washing Machine Factory of Guangdong Province, Laiyang Electric Iron Factory, Fenghua Refrigerator Factory of Guizhou Province, and Huangshan Television Factory of Hefei, which guaranteed a larger development space for Haier‘s multi-line operation and expansion.
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1997-02-01 In February of 1997, Haier went for the World Household Appliances Expo held in Cologne and offered sales certification to foreign distributors, which not only earned pride for China, but also declared Haier‘s initiation for global market. On June 26th, 1996, Haier won the internationally highest honor Five Star Diamond Award conferred by American Academy of Restaurant and Hospitality Sciences, and Haier CEO Zhang Ruimin was awarded Five Star Personal Lifetime Achievement Award. Haier won consumers‘ recognition in a wider range. Being a constant winner in the selection of ?Most Reliable Light Industrial Product?, Haier had become the No.1 brand among consumers. In July of 1995, the Red Star Household Appliances Company was merged into Haier Group. And, under the strategy of ?digesting shock fish?, Haier injected its own culture and activated the merged enterprise to develop Haier into an increasingly larger scale. On May 22nd, 1995, Haier Group moved to the newly established Haier Industrial Park, marking the initiation of Haier‘s global brand strategy. On April 22nd, 1994, Haier went for the World Earth Day Expo held in U.S. with its Super Freon-free Refrigerator, which was the only environmental product for the Expo produced by a developing country. Haier Industrial Park was progressing each day, with more and more new projects put into service.
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1999-2005:
2004-11-01 In November of 2004, the world most influential financial media Financial Times and the world largest accounting firm Price water horse Coopers jointly publicized the ?World Most Respectable Enterprises and Entrepreneurs? as well as the ranking list of worldwide enterprises. And
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among Chinese enterprises, Haier ranked No.1. 2004-11-08 On November 8th, 2004, globally leading financial newspaper The Wall Street Journal for the first time publicized ?Top 50 Eye-catching Women of Global Business?, and Haier President Yang Miamian was on the list. In October of 2004, Haier Pakistan passed the ISO9001, becoming the first Pakistan-based foreign household appliances brand as well as Haier‘s first overseas plant that had passed such certification. In October of 2004, Fortune publicized ?Top 50 Superwomen of Global Business?, and Haier President Yang Miamian ranked No.8. In August of 2004, Haier was assessed and designated by the Ministry of Science and Technology and China Standards Commission as national pilot manufacturer of research on important technologies as the only listed household appliances company. The 2004, August Fortune Chinese Edition publicized ?China‘s Most Admirable Companies?, and Haier ranked No.2. Among the 7 items of this year's selection. Haier Group ranked among top 3 in 6 items, with three of them ranking No.1, that is, management performance, innovation capability and social responsibility. Haier had integrated with the world top 10 chains. On July 1st, 2004, U.S. retail giant TARGET and Haier jointly achieved the record of selling 7,000 Haier air-conditioners within 7 hours in New York. As shown in the picture, American consumers queue for Haier air-conditioners. On August 9th, 2004, Fortune publicized ?2004 Asia‘s Top 25 Business Leaders?, and Haier CEO Zhang Ruimin ranked No.6. On July 1st, 2004, American consumers queued for Haier air-conditioners at the Manhattan Square, three blocks away from the Haier U.S. Headquarter. And, 7,000 Haier air-conditioners were sold out within 7 hours. On June 28th, 2004, World Brand Summit meanwhile the Press Conference of China‘s Top 500 Valuable Brands was held in Beijing Int'l Hotel, and Haier ranked No.1 with a brand value of 61.237 billion RMB.
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2008:
2008-12-01 Localization plays a significant role in Haier‘s global strategy. Guided by such concept, Haier developed the Fat Refrigerator for India market which won wide recognition among Indian consumers who praised Haier Fat Refrigerator for its ?fast ice making?. In December of 2008, 2009 IF Design Award was publicized, and Haier Three-door Refrigerator, Haier Electrical Water Heater, and Haier Doubleburner Gas Stove won honor of IF International Design Award. This was the first time that China‘s kitchen household appliances enterprise had won such prize, and 2008 was also a year during which Chinese household appliances enterprises had historically won the greatest number of prizes. On December 5th, 2008, the opening ceremony of Qingdao Haier Intercontinental Hotel (built and controlled by Haier) was held in Qingdao International Sailing Center of the Games of the 29th Olympiad. Director of the Standing Committee of Qingdao Municipal People‘s Congress Zhang Ruofei, Deputy Mayor of Qingdao Municipality Hu Shaojun, member of Qingdao Municipal CPC Committee and Chief of the United Front Work Department Zang Aimin, Haier CEO Zhang Ruimin, and Haier President Yang Miamian attended the ribbon-cutting ceremony. On December 1st, 2008 (US time), ?China‘s Most Valuable Brands ?was publicized in New York, and Haier, with a brand value of 80.3 billion RMB, ranked No.1 for the third consecutive year. Lenovo ranked No.2 with a brand value of 68.2 billion RMB. In addition, ?China‘s Brand Founders? was also released at the conference, with Haier CEO Zhang Ruimin and other 7 entrepreneurs winning the honor. ?Brand Figures of the Year? was also publicized, with Haier President Yang Miamian and other 8 celebrities winning the honor. Jointly conducted by RREEF Global and Beijing Famous Brand Asset Evaluation Company, the selection of the China‘s most valuable brands was initiated in 1995 and is a brand research program with the longest history in China. The results of the second bidding project of Household Appliances Go into
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Rural Areas jointly held by Ministry of Commerce and the Ministry of Finance of the People's Republic of China were announced, and Haier Color TV, Mobile phone, and Refrigerator won the biddings. This time, the project had, based on the originally 3 provinces of Shandong, Henan, and Sichuan, recruited another 11 provinces, and apart from color TV, mobile phone and refrigerator, washing machine was added to the list.
2010:
2010-04-30 On April 30th, 2010, member of the Standing Committee of the Political Bureau of the CPC Central Committee and Secretary of Central Commission for Discipline Inspection He Gouging visited Shandong Pavilion of the 2010 Shanghai Expo. Secretary He was also quite interested in Haier‘s internetof-things household appliances platform. On April 28th, 2010, Professor John L Thornton, who was also Chief of World Leading Competence Project of School of Economics and Management at Tsinghua University, visited Haier Group and exchanged ideas with Haier CEO Zhang Ruimin on issues like mode of enterprise management. Mr. Thornton once served as President of Goldman Sachs Group. During their conversation, Zhang Ruimin and Mr. Thornton reached a common ground on issues like strategic/customer positioning, down-ward triangle structure, and the necessity of integrating enterprise development with the use of internet. On April 27th, 2010, led by Headmaster Wang Xibin and accompanied by Assistant Commanding Officer of Jinan Military Area Liu Shanyang and Deputy Secretary of the CPC Qingdao Municipal Committee meanwhile Governor of Qingdao Xia Geng, the 36th National Defense Seminar of National Defense University, which were made up of 81 students, paid an investigation tour to Haier Group and met with Haier CEO Zhang Ruimin. Headmaster Wang was deeply expressed by Haier‘s innovative concepts, and he also spoke highly of the achievements Haier had made. During April 22nd to 23rd, 2010, the domestically first ?China Top 100 Green Enterprises? was jointly publicized by China Entrepreneur Club and Chengdu Municipal Government, and Haier was among the top 100. On April 20th, 2010, ?Report on the Most Beloved World Expo Concepts by China Urban Consumers? was jointly publicized by Global Entrepreneur and
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the world famous research organization Ip sos, and Haier ranked No.1 in the overall report. Still, among the 7 ?Most Human-centered and Socially Responsible indicators?, Haier won 5 of them. With the theme proposed by Shanghai Expo as its selection criterion, the report picked out 20 out of the 76 brands (76 brands including 19 sponsor brands). 2010-04-19 On April, 19th, 2010, Meeting on Operation of Shandong Pavilion of 2010 Shanghai Expo was held by Shandong Provincial Government. During the meeting, it was announced that Haier CEO Zhang Ruimin was invited to act as Honorary Curator of Shandong Pavilion. On April 15th, 2010, Business Week publicized ?World Top 50 Competitive Enterprises of 2010?. Haier ranked No.28 in the selection, and it was also the only listed Chinese enterprise. Apple, Goggle, and Microsoft ranked the top 3. Jointed conducted by Business Week and Boston Consulting Group, the selection was based on innovation capacity and technical contribution of the many enterprises around the world, and it is also of great influence in the industry. This was also the first time that over 50% listed enterprises came from outside the US. On April 14th, 2010, Yushu County of Qinghai Province was stricken with M 7.1 earthquake. In ?Boundless Love—Fund Campaign for Yushu?, the program of CCTV, Haier Group donated 12 million RMB to the disaster area. On April 21st, Haier Group filed a flag at half-mast to mourn over the dead in the disaster. On April 11th, 2010, Chinese Ambassador to India Zhang Yan, accompanied by Counselor Peng Gang, paid an investigation tour to Haier Group. After touring Haier Group, Ambassador Zhang and his wife planted a tree in Haier Industrial Park for a memorial. On April 10th, 2010, led by Professor Yang Qiubao, the Department of Economics of Central Party School paid an investigation tour to Haier Group and met with Haier CEO Zhang Ruimin and Vice Chairman of the Board of Directors of Haier Group Wu Kesong. Professor Yang was quite interested in Haier‘s individual-order combination mode and its new performance appraisal system, and he considered Haier‘s innovation worthy of being studied by other enterprises. On April 8th, 2010, the agreement signing ceremony of ?Chongqing•Shandong Economic & Trade Cooperation? was held in
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Chongqing, and member of the Political Bureau of CPC Central Committee and Secretary of Chongqing Municipal Committee Bo Xilai and Secretary of Shandong Provincial Committee and Chairman of Standing Committee of Shandong Provincial People's Congress Jiang Yikang attended the ceremony. The project of Haier high-end refrigerator production line was also signed at the ceremony, which would satisfy high-end customers of southwest China. On April 9th, led by Secretary Jiang Yikang, Shangdong Delegation paid an investigation tour to Haier Chongqing Industrial Park. 2010-04-02 In spring of 2010, Yunnan, Guizhou, Guangxi were stricken by a drought. On April 2nd, Haier Group, together with China Youth Development Fund, donated 1 million bottles of purified water to over 50 Hope primary schools of the stricken area, and local media spoke highly of Haier‘s sense of shouldering the social responsibilities.
2010-04-15
With the title of ?Spark between Zhang Ruimin and HuYong—Haier‘s No.1 Challenge?, the 2010 April CEIBS Business Review reported about Haier‘s innovation practices on business model transition, with the report article strongly recommended on the cover. The article was written by the famous financial writer meanwhile Professor of Peking University HuYong. Professor Hu said; ?for Haier, its No.1 challenge is to build up a competitative business model?. When reporting on Haier‘s ?win-win mode of individual-order combination?, the professor thought: ?Haier has achieved the initial success in building up a new mode?. Facing the most successful people in China, CEIBS Business Review is China‘s first commercial magazine in the real sense which provides enterprises with effective management solutions. The 2010 Early April Fortune Chinese Edition publicized ?China‘s Most Influential Business Leaders?, and Haier CEO Zhang Ruimin ranked No.1 in household appliances industry. The sixth time of publicizing ?China‘s Most Influential Business Leaders?, Fortune issued the honor list to pay tribute to those who had made contribution to China‘s economy over the past years, and its selection criterion was based on how they had influenced the enterprises, the industry, and the whole world. This was also the third time for Zhang Ruimin to receive the honor.
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Partners
Haier has established an extensive sales network around the globe. Key partners in perspective markets include: ? China: Strategic alliance with Sunning and Gome chain stores ? America: Cooperation with TOP 10 retailers, e.g. SEARS, Lowe's, HOME DEPOT, Best Buy, PC-Richard, Wal-Mart, Sam's, Costco, Brands Mart and Target ? Japan: Cooperation with TOP 10 retailers, e.g. YAMADA, KOJIMA and JUSCO ? Europe: Cooperation with KESA, Media Market and Carrefour
Haier Appliances India started its operations in India in Dec 2003. In Aug 2004 the company made an all-India promotional launch of over 55 products across six different product categories which comprised of refrigerators, color television/DVDs, washing machines, microwave ovens and dishwashers. The company has recently launched its brand of mobile phones in India. Haier Appliances India has got its presence in all the major cities of the country. The company has a strong network that comprises of 18 branch offices, 25 warehouses and over 4,000 retail outlets. The company has got a dealer network of more than 1600 dealers all over the country. In the year 2007, Haier Appliances India entered in to a JV with Sanyo of Japan in order to expand its business in Asia by selling its refrigerators under the Sanyo brand. During the same year, the company also acquired Anchor Daewoo‘s Appliance business which included a refrigerator manufacturing unit at Ranjangaon in Pune.
Haier Group is China's ambassador to appliance stores worldwide. Once named Qingdao Refrigerator Plant, the company climbed from the verge of bankruptcy to establish itself as a world-renown brand. China's #1 appliance manufacturer sells refrigerators and freezers, air conditioners, dishwashers, microwaves, televisions, vacuums, mobile phones, computers, and more. Operating through subsidiary Haier Electronics, it makes and sells washing machines, water heaters, and offers customers logistics services. Haier Group has expanded its reach by exporting to North America, Europe, the Middle East, Asia, and Africa. The group has also pursued markets beyond appliances through acquisitions and joint ventures.
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INTERNSHIP REPORT 2. Profile of The Organization Haier India:
Haier Appliances (India) Private Limited is a wholly-owned subsidiary of Haier Group. Haier India was launched in India in December 2003 and by August 2004 had an all-India promotion launched with over 55 products across six product categories --refrigerators, color television/DVDs, washing machines, microwave ovens and dishwashers. Haier India has also launched its brand of mobile phones in India. The India launch was started with innovative products which were designed keeping the day to day customer needs in mind -- products that will transform the customer's everyday living into inspired living. Products that will make your today better than yesterday. Haier India launched BMR technology for the first time in India. Even the Double Drive is a newly patented technology. The India operations already have an established dealer network of approximately 1600 dealers all over the country, which is backed by a strong service and after sales service network.
RANJANGAON PLANT ? Situated 54 Kms. from Pune & 200 Kms. From Mumbai. ? MIDC Industrial area. ? Address- B-3, Growth Centre. ? Neighbors: - Fiat, Whirlpool, LG. ? Plant area: - 40 Acres. ? Technology:? Direct Cooling ? BMR technology
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Haier launches first refrigerator & R&D facility in India In India ? Pune, August 09,2006 Haier, the largest manufacturer of refrigerators worldwide; its first manufacturing facility in India as part of the company's plans to expand operations in the country. The new manufacturing facility is located at Ranjangaon in Pune district of Maharashtra Spread over 40 acres of land, the plant currently has capability to manufacture Refrigerators. Haier is upgrading the new facility with state-of-the-art equipments to create a Research & Development facility for refrigerators. The facility has been acquired as a part of Purchase of Appliances Business of Anchor Daewoo Industries Limited by Haier India. Haier initially plans to manufacture its wide range of refrigerators at this facility in Pune. The facility would enhance the overall capacity of Haier and would enable the company to increase its customer reach and enforce its commitment to providing advanced quality products in India as well as in the global market. The facility is expected to have a headcount of over 500 people (including contract workers) and the company may look at recruiting more people in various capabilities as it commissions to its full capacity. Haier Appliances (India) P. Ltd. ?India is a key market for Hailer‘s global operations and the launch of our manufacturing and R&D unit investment is a reiteration of Hailer‘s long-term commitment to the Indian market. Haier sees India as a strategically important market and we may expand current capacities in the near future and are poised for high speed growth in the coming quarters.? Recognizing the growing role of India as an important market and emerging global business destination, critical to its global growth. The company foresees continued growth and expansion in the coming few years globally driven by its operations in India and hopes to realign India‘s strengths and world-class market capabilities to deliver services to its customers.
In India Haier manufactures refrigerators. The capacity of the plant at Pune is 1200 refrigerators in single shift of 9 hrs. The cycle time in the main line is 26 seconds. The cycle times for various subassemblies are different. So accordingly the stacks are kept to maintain a continuous flow. The plant in normal circumstances works for a single shift, however in peak season work is done in both shifts.
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INSPIRED LIVING Life is very involving and everyday it offers you new challenges. Haier has peeped into life and come up with ideas that make living enjoyable and joyous. The main brand Idea was that Haier products are inspired by Life: this is now expressed as Inspired Living. There is also another perspective on Inspired Living. All Haier products are the result of closely studied actual usage patterns of home appliances, i.e., inspired by everyday life. For example, Haier was the first to launch a Bottom Mounted Refrigerator in the country. It is based on a simple insight that refrigerator shelves are used far more often than the freezer shelf. So Haier has put the freezer at the bottom and refrigerator racks at convenient heights, so that you don‘t have to bend your back frequently. As a late entrant into the category, Haier understands the consumer needs better and reflects that in consumer offerings. This is how we write the positioning statement: Haier is better than all other brands for easy adopters because it offers them benefits that help them lead a better life as a result of our endeavor to understand life better and work technology around it. The India operations already has an established dealer network of approximately 1600 dealers all over the country, which is backed by a strong service and after sales service network. ? Over 4000 Retail outlets selling Haier products ? 21 Plants HAIER (plus some exclusive stores) ? Presence in all major cities ? Brand recall – better than other new brands. ? 26 Branch Offices & 25 warehouses ? 6 Direct Service Centers & 135 Haier customer care centers (covering all India) ? 24x7 Call Centre ? Present status of Haier considering the time span, is appreciated by the Industry
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Branch List 1. Ahmadabad 2. Bangalore 3. Bhubaneswar 4. Chennai 5. Chandigarh 6. Delhi 7. Dehradun 8. Dharamashala 9. Faridabad 10. Ghaziabad 11. Goa 12. Guwahati 13. Hyderabad 14. Indore 15. Jaipur 16. Jammu
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17. Jamshedpur 18. Kolkata 19. Kuttikkattukara 20. Kundli 21. Lucknow 22. Mumbai 23. Zirakpur 24. Patna 25. Pune, Wagholi 26. Solan, Sopan.
Haier Global:
Haier Global
Asia China HongKong Japan
Europe Haier Europe Italy Russia Spain Poland
Oceania Australia
North America America
Middle East Israel
NewZealand
Pakistan Portugal Korea India
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Globalization 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) 2) 3) Enter international mainstream markets; utilize main sales channels to deepen market penetration; 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, AsiaPacific, ASEAN, and South Asia. Utilizing this strategy, Haier now sells products in over 160 countries around the world.
Guided by the business philosophy of CEO Zhang Ruimin, Haier has experienced the development stages, noted as Brand Building, Diversification and Globalization. At the 21st anniversary of the founding of Haier Group on December 26, 2005, Haier announced its 4th strategic development stage of global brand building. In 1993, Haier brand was officially recognized as a famous brand. In 2006, Haier brand was valued at RMB 74.9 billion. Since 2002, Haier has consecutively been ranked first in the row of China‘s most valuable brands for manufacture of 18 products,
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including refrigerators, air conditioners, washing machines, televisions, water heaters, personal computers, mobile phones and kitchen appliances. Haier was ranked first of China‘s Top 10 Global Brands by China State Bureau of Quality and Technical Supervision (CSBTS) for refrigerators and washing machines. On August 30, 2005, Haier was ranked 1st of China‘s Top 10 Global Brands by the Financial Times.
Facing the fierce global market competition, Haier launches the Global Brand Building Strategy and updates spirit ?Create resources, worldwide prestige? and work style ?Individual-goal combination, swift action and success? with an aim to gain global recognition and sustainable development. By April 2006, the Haier Group has obtained 6,189 patented technology certificates and 589 software intellectual property rights.
Global Branding Strategy
Haier‘s global branding strategy aims at positioning the company as a local brand in different world markets in conjunction with enhanced product competitiveness and strong corporate operations. Haier‘s international business framework encompasses a global network of design, procurement, production, distribution and after-sale services. Today, Haier has established 15 industrial complexes, 30 overseas production factories and bases, 8 design centers and over 58,000 sales agents worldwide.
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In China, Haier‘s 4 leading product categories - refrigerators, refrigerating cabinets, air conditioners and washing machines - have over 30% market share Haier is now approaching its goal of being ?local? in American and European markets via localized design, manufacturing and sales processes. In addition, Haier has set up production facilities and plants in the USA, Italy, Pakistan, Jordan and Nigeria.
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INTERNSHIP REPORT 2.1 Origin of the Haier Organization :
The origins of Haier date back long before the actual founding of the company. In the 1920s, a refrigerator factory was built in Qingdao to supply the Chinese market. After the 1949 establishment of the People's Republic of China, Haier was then taken over and turned into a state-owned enterprise.
2.2 Growth of The Organization :
Haier, one of the largest Home Appliances and Consumer Electronics brands, worldwide, announced its plans for 2012 with an aggressive strategy to reinforce its strength and spread across product categories and consolidate its position as the No.1 Refrigeration and Laundry Appliances brand in the world today. The company registered a robust growth of 216% in the second quarter of 2012 ended June 30 over the corresponding period in 2011. The company has announced an overall growth target of 200% in 2012 over 2011. Haier today launched 25 new models nationwide inspired by consumer experiences across product categories as a step forward in achieving its ambitious growth plans. These include the new range of ultra-slim Full HD LED backlit TV‘s with 1.2 inch thickness, the slimmest in the category available in the market and a wide range of LCDs equipped with unique Motion Gaming Technology and recording as well as playing any program feature through the USB. LCD TVs are available from 16 inches to 42 inches. Haier is the only brand to have launched 22 inch LED and will very soon be introducing 24 and 32 inch models. Today Haier has the widest range of Side by side models in Refrigerators. The company also launched new range of Bottom Mounted Refrigerators (BMRs) called the BMR Plus, new models in Empress Series refrigerators, Deep Freezers, 5 star Split ACs, range of front and top load Washing Machines. According to Mr. Eric Braganza, President, Haier Appliances India, ?We at Haier are proud of our strong customer connect, which inspires us to break new barriers in consumer relevant innovation. We are well poised to achieve our growth target of over 200% this year over FY2012. In Q2 of FY 2011 we have already achieved a 216 % growth over the same period FY 2011. As we are now ready to enhance our range of products across product groups we are proud of the fact that Haier has one of the largest ranges of products across most of the categories.? The entire new range of Haier products will be available in retail outlets selling Haier products as well as in the shop in shops across the country. Haier has targeted more than 100 shops in shops across India, giving the customer an international shopping experience as they get an opportunity to see the complete range of Haier products. Haier also plans to strengthen its business through an aggressive sales channel expansion for its Appliance business as well as expanding and consolidating its after-sales service network across the country.
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2.3 Milestones of the organization :
? Haier Ranked the No 1 Global Major Appliances Brand for 3rd Consecutive Year.
? Haier is the number one Major Appliance brand in the world with a 7.8 % retail volume share in 2011 marking the third consecutive year Haier has been given this honor.
? World‘s 4th largest white goods manufacturer and one of china‘s top 100 IT companies.
? Having 240 subsidiary companies and 30 design centers, plants and trade companies and more than 70,000 employees in the world.
? Haier has consecutively been ranked first in the row of china‘s most valuable brands for manufacture of 18 products, including refrigerators, air conditioners, washing machines, televisions, water heaters, personal computers, laptops, mobile phones and kitchen appliances.
? Haier was ranked first china‘s top 10 global brands by china state bureau of quality and technical supervision (CSBTS) for refrigerators and washing machines.
? Haier has currently obtained more than 7000 patented technology certificates (1234 for Haier inventions) and 589 software intellectual property rights. Haier has hosted and taken part in modification of about 100 technology standards.
? Haier announced official sponsor of Beijing 2008 Games.
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? Received a World Climate Award from the United Nations Development program and the US Environment Protection Administration in 2000 as per Euro-monitor International (the global leader in consumer market strategy research) survey 2011. ? Ranked 86th among the world‘s 500 Most Influential Brands by world Brand Lab in 2006. Only Chinese brand to be ranked in top 100 for three consecutive years. ? Ranked 1st among Chinese brands with the most potential by Glebors Global Financial Reports of Canada, 2006.
? Ranked 1st among China‘s Top 10 Global Brands by the Financial Times in 2005. ? Ranked 1st among China‘s Top 10 Global Brands by China State Bureau of Quality and Technical Supervision (CSBTS) for refrigerators and washing machines in 2005. ? CEO Zhang Ruimin ranked 26th among World‘s Most Respected Business Leaders by the Financial Times in 2005. ? CEO Zhang Ruimin ranked 6th among Asia‘s 25 Most Powerful People in Business by Fortune magazine in 2004. ? Received a World Climate Award from the United Nations Development Program and the US Environment Protection Administration in 2000. ? As per Euro-monitor International (the global leader in consumer market strategy research) survey 2011
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CERTIFICATION & ACHIEVEMENT 26/10/2011
Haier Tops "Most Potential Chinese Brands"
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Shared Certification:
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INTERNSHIP REPORT The American Academy of Hospitalty Sciences Presents 5star diamond to Haier:
Certificate of Recognition:
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2.4 Vision:
Inspired Living… To be most preferred and trusted Home Appliances Company in India providing more perceived value to the customer. 2.5 Mission :
We at Haier, Never say No to the Market. Inspire continuously to enhance employee capability. Promoting business practices that respect the Earth, Environment, Health and Safety.
2.6 Objective of The Organization:
To become the No.1 Home Appliances company in India by 2014.
2.7 Ownership Pattern:
Although under partial public ownership, Haier is still technically a "collective" company, meaning that it is supposed to be owned by its employees. However, its actual ownership situation is opaque; the employees receive no dividends and do not know how much they own in reality. Interference from officials is also a risk for state-owned enterprises like Haier. Various
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levels of government often try to push their ailing companies upon successful ones, often resulting in failure; Haier was once talked into acquiring a pharmaceutical company, even though it had no prior experience or infrastructure in biotechnology.
2.8 Products Profile: Refrigerators:
Haier is the first company to make breakthroughs in integrating fluorine-free, energy-saving technologies with large freezing capacity, and solve technological problems related to sterilization. Haier has also rolled out the world‘s first variable-frequency refrigerator, which is made of heat insulating material designed for aerospace.
Household Air Conditioners:
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At its eight large production bases in China, Haier uses the world‘s most advanced automatic flexible production lines to ensure the delivery of large quantities of highly reliable air conditioners, which are exquisite in quality and free of defects.
Washing Machines:
Haier produces washing machines of 5,000 different specifications under 18 categories, and is the only company in the world with the capability of large scale production of top load washing machines (popular in Asia).
Freezers:
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Haier produces 1.8 million units of freezers each year. Haier is licensed to supply products for military provisions, and is the only company to win the bid for three consecutive years.
Vacuum Cleaner:
Developed with the Haier spirit of continuous innovation, Haier dust collectors consistently lead the trend in the dust collection market.
Water Heaters:
Haier manufactures water heaters of 300 specifications under 12 categories, including electric water heaters, gas water heaters, solar energy heaters, and gas boilers, in the categories of mechanical, electric, and network-based, and with the capacity range of 5-litres to 500-litres.
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Microwave Ovens:
Haier offers microwave ovens in 50 varieties under 8 categories, including mechanical, electronic and digital, and with the capacity range of 17-litres to 40–litres. Haier ovens feature both stainless steel and painted stoves, and come with top doors and side doors.
LCD?s:
Haier offers more than 20 models in LCDs.
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DVD Players:
Haier offers a diverse line of DVD players of exceptional quality. Haier DVD players are favored by consumers for their performance and after sales service. The products have won a number of awards for environmental protection and energy efficiency.
Mobile Phones:
Haier mobile phones include such latest features as GSM/GPRS technology, integrated digital cameras, MMS, MIDI Polyphonic ring tones and color LCD screens. The product line includes bar-type phones, clamshell phones, smart phones and the new and unique slim phones.
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Computers (desktop and laptop):
With a special attention to users‘ health, and eye-protection, Haier makes desktop and laptop computers for personal and commercial use in different ranges, including the world‘s first laptop with 3.2 mega-pixel camera.
Digital Information Products:
Haier offers a number of patented digital information products, including MP3 and MP4. Haier is committed to delivering personalized products, services and application solutions to meet the individual needs of users.
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INTERNSHIP REPORT Haier Pharmacy:
Founded in 1996, Haier Pharmacy is the newest growth area within the group. The product offerings cover 80 specifications under 60 categories including medical raw materials, tablets, capsules, granules, oral liquid, medicine powder for injection, lyophilized powder for injection, eye drops, etc.
Haier services: Travel:
Haier Group‘s Conference & Exhibition Division provides one-stop service for organizing meetings and conferences, from preparation to hosting the event. Haier‘s hotel system is able to provide conference services, accommodation, catering and entertainment.
Insurance
Established in 2001, Qingdao Haier Insurance Agency delivers insurance policies on behalf of insurance companies through Haier‘s comprehensive network and large customer base. The company also makes loss assessments and handles compensation on behalf of insurance companies.
Logistics:
Haier Logistics was established in 1999. By establishing a global network of suppliers, Haier has gained significant advantages in terms of cost and R&D. Haier aims to establish an efficient supply chain and provide customer-oriented value-added services. Haier logistics is growing into a global trade company through continuous supply chain management optimization.
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Haier Software:
Qingdao Haier Qingdao Software Company, established in 1998, is a high-tech enterprise engaged in development of embedded systems, information software, and system integration. Its main business is focused on the development of commercial intelligent systems and embedded systems, software outsourcing, system integration and the development of multimedia systems.
Haier Real Estate:
Qingdao Haier Real Estate Development and Investment Company is a wholly-owned subsidiary of the Haier Group. In developing its real estate business, the company pays high attention to improving the quality of construction and living conditions, while making efforts to preserve cultural heritage and to facilitate a healthy and civilized living environment
Percentage sales of home Appliances in Haier:
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INTERNSHIP REPORT Competitor?s of Haier: 1) Profile of LG:
? LG Electronics continues to pursue its 21stcentury vision of becoming a worldwide leader in digital ensuring customer satisfaction through innovative products and superior service while aiming to rank among the world‘s top three electronics, information, and telecommunications firms by 2010. ? LG Electronics plays an active role in world markets with its assertive global business policy. As a result, LG Electronics controls 114 local subsidiaries worldwide, with roughly 82,000executives and employees. ? LG Electronics India Pvt. Ltd. engages in the manufacture and sale of consumer electronics, home appliances, computer products, and mobile phones in India. Its consumer electronics include LCD TVs, plasma displays, display panels, color televisions, home theatre systems, music systems, DVD recorders/players, and MP3 and MP4 players; and home appliances comprise room air conditioners, commercial air conditioners, refrigerators, refrigerator compressors, washing machines, dishwashers, microwaves, and vacuum cleaners. The company also provides computer products, such as laptops, notebook and desktop personal computers, LCD monitors, CRT monitors, optical storage devices, and projectors; and mob... ? LG Electronics India Pvt. Ltd. engages in the manufacture and sale of consumer electronics, home appliances, computer products, and mobile phones in India. Its consumer electronics include LCD TVs, plasma displays, display panels, color televisions, home theatre systems, music systems, DVD recorders/players, and MP3 and MP4 players; and home appliances comprise room air conditioners, commercial air conditioners, refrigerators, refrigerator compressors, washing machines, dishwashers, microwaves, and vacuum cleaners. The company also provides computer products, such as laptops, notebook and desktop personal computers, LCD monitors, CRT monitors, optical storage devices, and projectors; and mobile phones, including camera phones, music phones, and color screen GSM handsets. It sells its products through dealers. The company was founded in 1997 and is based in Greater Noida, India. LG Electronics India Pvt. Ltd. operates as a subsidiary of LG Electronics Inc.
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INTERNSHIP REPORT 2) Profile of Whirlpool:
The Whirlpool Corporation is an American multinational manufacturer of major home appliances headquartered in Benton Charter Township, Michigan, United States, near Benton Harbor, Michigan. The company is listed in Fortune 500 and has annual revenue of approximately $18.4 billion, more than 70,000 employees, and more than 70 manufacturing and technology research centers around the world. The company markets Whirlpool, Maytag, Kitchen Aid, Jenn-Air, Amana, Gladiator Garage Works, Inglis, Estate, Brastemp, Bauknecht, Consul, and other major brand names to consumers in nearly every country around the world. After acquiring the Maytag Corporation on March 31, 2006, the Whirlpool Corporation surpassed Electrolux to become "the largest home appliance maker in the world." Notably, almost all of Whirlpool's appliance line undergoes some manufacturing within the United States, as opposed to other durable goods manufacturers such as General Electric. Founded in 1911, Whirlpool celebrated its 100th Anniversary in 2011. Whirlpool Corporation, a global manufacturer and marketer of major home appliances, is all set to add sparkle to the mundane chore of washing clothes, with the launch of its new front – loading washing machine – ?Sensation‘. Whirlpool Sensation, a front-loading washing machine offers the best wash performance with 20% lower water consumption & its special Stain wash function can help remove 10stubborn stains - Tea, Coffee, Ketchup, Pickle, Shoe Polish, Red Sand, Blood, Milk, Chocolate and Curry. Priced between Rs.18,990/- to 22,990/- , Whirlpool Sensation washing machine is available in 6.5 kgs capacity with the unique Stain wash and Whitest Whites programmers. The product will be available across all retail outlets selling Whirlpool products.
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INTERNSHIP REPORT 3) Profile of Videocon:
Videocon is an industrial conglomerate headquartered in Gurgaon (NCR Delhi) with interests all over the world, and is an Indian multinational company. The group has 17 manufacturing sites in India and plants in China, Poland, Italy and Mexico. It is also the third largest picture tube manufacturer in the world. The group is a USD 4 billion global conglomerate. Consumer Electronics and Home Appliances: Videocon Industries Limited manufacture, assemble and distribute a comprehensive range of consumer electronics, products and home appliances, including finished goods such as television, Home entertainment systems, refrigerators, Washing machines, Air Conditioners and other small household appliances and components such as glass shell(panels & funnels), compressors, motors etc. Oil and Gas: In the domestic oil & gas business, the Group has interests in exploration, prospecting and an intention to get into gas distribution. Beyond borders, Videocon is displaying considerable entrepreneurial flair by becoming active in bagging exploration and production in countries like Brazil, Mozambique, East Timor, Indonesia and Australia. This gives the Group hegemonic status in those countries along with the possibility of earning extraordinary profits. The International Oil & Gas Business headquartered at the Dubai office of VHHL.
Power Business: The Company is developing the Pipavav power project through a wholly- owned subsidiary of the Company, Pipavav Energy Private Limited. The Project is designed to have a capacity of 1200 MW and comprises two units of 600 MW each. The Company is also developing the Chhattisgarh power project through a wholly- owned subsidiary of the Company, Chhattisgarh Power Ventures Private Limited. The Chhattisgarh power project is designed to have a capacity of 1200 MW and comprises two units of 600 MW each.
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Telecommunication: Videocon Group operates the GSM mobile services through Videocon Telecommunications Limited (VTL). VTL was granted a license by the Government of India to provide unified access services in the following 21 circles in India: Delhi, Mumbai, Tamil Nadu, Chennai, Kolkata, Maharashtra, Gujarat, Andhra Pradesh, Karnataka, Kerala, Haryana, Uttar Pradesh(West), Uttar Pradesh (East), Rajasthan, Madhya Pradesh, West Bengal, Himachal Pradesh, , Bihar, Orissa, Assam, North East, Jammu & Kashmir.
4) Profile of Samsung:
Samsung Electronics Co. Ltd is a South Korean multinational electronics and information technology company headquartered in Suwon, South Korea. It is the flagship subsidiary of the Samsung Group and has assembly plants and sales networks in 61 countries across the world, employing over 200,000 people. It is the world's largest mobile phone maker, world's largest television manufacturer and world's second-largest semiconductor chip maker (after Intel Corporation). In 2009, the company became the world's-largest IT producer, surpassing the previous leader, Hewlett-Packard. Its sales revenue in the areas of display devices (LCD and LED) and memory chips is the world‘s highest. Samsung has dominated the world television market in the latter half of the 21st century's first decade, having sold the most televisions globally from 2006 to 2010 (projections in 2010 indicated that this trend would continue). In the global LCD panel market, the company has maintained the leading sales position for eight years in a row.
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INTERNSHIP REPORT Haier India Structure:
Haier Appliances Head Quarter Delhi
Marketing Team Haier India Pune Plant All Over INDIA
Head Office Address: - Haier Appliances (India) Pvt.Ltd. B-1/A-14, Mohan Co-operative Industrial Estate, Mathura Road, New Delhi-110044 Tel: - 011-26952470/ 71/72/73. Fax: 011-26971562 www.haierindia.com Plant Address: - Haier Appliances (India) Pvt.Ltd. B-3, M.I.D.C., Ranjangaon, Ranjangaon, Tal: - Shirur, Dist: Pune-412 208 Tel: (02138)670251/52/53. www.haierindia.com
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INTERNSHIP REPORT Departmentalization in Pune Plant: General Manager Plant Assistant General Manager Plant Head Production Head Quality Assurance
Head HR / ADMN /EESH Head Finance & Accounts He Head Stores
Head R&D
Head Sourcing Head SCM Head Project
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Head Innovation Head Maintenance Head Tooling
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2.10.1 Responsibilities of Finance Department:
Chief Financial Officer (CFO)
Plant Head
Assistant General Manager (AGM) Finance
Head of Department Of Finance
Employee 1
Employee 2
Employee 3
Employee 4
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? In Haier the finance departments do paying salaries to every employee. ? Creating pay slips to the employee. ? Preparing balance sheet of the organization.
2.10.2 Responsibilities of Human Resource Management Admin And EESH Department:
Plant Head
Head of Department Of Human Resource (HR)
Employee1
Employee 2
Employee 3
Employee 4
Operations 1
Operations 2
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? Checking the vacancies in the organization. ? Selecting the employees into the organization. ? Checking employee satisfaction in the organization.
2.10.3 Responsibilities of Production Department:
Plant Head
Head of Department Of Production
Employee1
Employee 2
Employee 3
Operations 1
Operations 2
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? Making Production plan to the every month. ? Take care of the products.
2.10.4 Responsibilities of Quality Assurance Department:
Plant Head
Head of Department Of Quality Assurance (QA)
Incoming Quality Assurance (IQA)
IQA Chamber
IQA ROHS
IQA DOCK
IQA OQA
Employee1
Employee 2
Employee 3
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? Checking the quality of products. ? Following ISO standards into the organization.
Responsibilities of Store Department:
Plant Head
Head of Department Of
Store
Employee1
Employee 2
Employee 3
Operations 1
Operations 2
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INTERNSHIP REPORT Responsibilities of Research and Development (R&D) Department:
Plant Head
Head of Department Of
R&D
Employee1
Employee 2
Employee 3
Operations 1
Operations 2
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? Introducing new technology of products. ? Developing New Machines.
Responsibilities of Maintenance Department:
Plant Head
Head of Department Of
Maintenance
Employee1
Employee 2
Employee 3
Operations 2 Operations 1
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? To maintain the company products. ? To maintain the all Machinery and Equipment.
2.10.6 Responsibilities of Innovation Department:
Plant Head
Head of Department Of
Innovation
Employee1
Employee 2
Operations 1
Operations 2
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? Innovating new Ideas. ? Implementing new Ideas.
Future Growth of Haier: Continuous Global Growth:
Once again ranked the world‘s number one Major Appliances brand in 2010, Haier‘s strong position and international recognition are due to the company‘s rapid expansion of business in global markets. As of November 2010, international sales increased by 23% year on year, with turnover growing 38% in the Americas, 32% in Europe, 13% in AsiaPacific and 16% in the Middle East. Haier now provides solutions for consumers in over 160 countries and is quickly gaining leading positions in many major markets around the world. Haier‘s future growth lies in large part in markets outside China. In 2011, Haier plans to expand R&D and manufacturing facilities in several countries, including expanding production capacity in Italy to meet the tremendous demand for the 3D line of refrigerators in Europe, and also to significantly increase its production capacity in countries such as Pakistan and India. The brand, which prides itself on quality, innovation, award-winning design and inspired living solutions, constantly strives to anticipate consumer demand and develop original and meaningful appliances for European households, placing ease of use at the centre of each new product development. The ?Smart Life‘ concept is one such example – this range of connected home appliances allows users to communicate with their devices anytime, anywhere via the Internet.
„Smart Life? – inspired living solutions...
At CES 2011 Haier will present the results of its latest R&D efforts, including the new ?Smart Life? concept products - Internet-connected appliances featuring refrigerators, televisions, washing machines and air conditioners. With these products, users would be able to remotely control and obtain information from their appliances either from home or on the go, allowing customers to do more, worry less and save time. The Haier ?Smart Life? system also includes home appliance controls, lighting and curtain controls, multimedia entertainment, security alarms monitoring among other outstanding features together in the world‘s first wireless-controlled network home appliance system. The ?Smart Life? concept solutions demonstrate Haier‘s approach to developing usercentric innovations for a smarter future.
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INTERNSHIP REPORT The next step for Haier?s 3D TVs: new family-oriented 3D technology
A 3D room at the booth will display Haier‘s newly developed family-oriented 3D technology televisions. These advanced TVs offer 2D to 3D experience at the push of a button and a high quality visual experience with Haier‘s own Active Shutter TV and Passive Polarized 3D technologies. Later this year Haier Europe plans to launch an affordable, user-friendly, new 3D technology TV line, designed to be enjoyed by the whole family at home. René Auber tin, CEO of Haier Europe, emphasizes Haier‘s objective of democratizing the 3D experience for European families: “Thanks to the affordable and lightweight glasses that Haier will be selling shortly, 3D viewing will be made accessible to more people, offering more families the perfect home cinema experience and the possibility to watch their screen from a wider variety of angles for all their favorite films and sporting events”. Haier will also be highlighting an impressive line of wireless, Internet-connected LED televisions with wide screens of up to 55?. Haier America will introduce a partnership with Yahoo! Connected TV to provide diverse content for Haier‘s connected TVs.
Haier Audio Launch
Sound lovers are not forgotten with the new Haier Audio product line, including the introduction of a top-of-the-range 3D Sound Bar. With just one single front facing speaker, this product will immerse an entire room in 3D sound without the need for additional speaker systems, bringing any television content to life in 3D audio. The combination of Haier‘s latest 3D televisions with this new audio line launch in Europe in late 2011 means that more consumers will be able to access an affordable yet quality 3D entertainment system for their homes.
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III.The McKinsey 7S Framework Background of Model:
How do you go about analyzing how well your organization is positioned to achieve its intended objective? This is a question that has been asked for many years, and there are many different answers. Some approaches look at internal factors, others look at external ones, some combine these perspectives, and others look for congruence between various aspects of the organization being studied. Ultimately, the issue comes down to which factors to study. The 7S model can be used in a wide variety of situations where an alignment perspective is useful, for example to help you:
? Improve the performance of a company;
? Examine the likely effects of future changes within a company;
? Align departments and processes during a merger or acquisition; or
? Determine how best to implement a proposed strategy.
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Hard “S”
Soft “S”
?
Strategy: the plan devised to maintain and build competitive advantage over the competition. Structure: the way the organization is structured and who reports to whom.
?
?
Systems: the daily activities and procedures that staff members engage in to get the job done. Shared Values: called "super ordinate goals" when the model was first developed, these are the core values of the company that are evidenced in the corporate culture and the general work ethic. Style: the style of leadership adopted. Staff: the employees and their general capabilities.
?
? ?
?
Skills: the actual skills and competencies of the employees working for the company.
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How to Use the Model:
Now you know what the model covers, how can you use it? The model is based on the theory that, for an organization to perform well, these seven elements need to be aligned and mutually reinforcing. So, the model can be used to help identify what needs to be realigned to improve performance, or to maintain alignment (and performance) during other types of change. Whatever the type of change – restructuring, new processes, organizational merger, new systems, change of leadership, and so on – the model can be used to understand how the organizational elements are interrelated, and so ensure that the wider impact of changes made in one area is taken into consideration. You can use the 7S model to help analyze the current situation (Point A), a proposed future situation (Point B) and to identify gaps and inconsistencies between them. It's then a question of adjusting and tuning the elements of the 7S model to ensure that your organization works effectively and well once you reach the desired endpoint. Sounds simple? Well, of course not: Changing your organization probably will not be simple at all! Whole books and methodologies are dedicated to analyzing organizational strategy, improving performance and managing change. The 7S model is a good framework to help you ask the right questions – but it won't give you all the answers. For that you'll need to bring together the right knowledge, skills and experience. When it comes to asking the right questions, we've developed a Mind Tools checklist and a matrix to keep track of how the seven elements align with each other. Supplement these with your own questions, based on your organization's specific circumstances and accumulated wisdom.
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Strategy of Haier:
The phase of Brand building strategy (1984-1991): Always aiming at the top position:
Summary: In the 1980s, the beginning of reform and opening-up, many enterprises, including Haier, introduced advanced foreign technology and equipment in refrigerators. At that time, demand exceeded supply in the home appliance market, and many enterprises sought economies of scale, focusing on output while neglecting quality. Haier did not seek high output blindly. Instead, it was very strict with the quality of its products, and implemented comprehensive quality management. It valued the concept of ?Always aiming at the top position?. When supply exceeded demand in the home appliance market, Haier won competitive advantage through superior quality. In this faze, Haier devoted itself to the manufacturing of refrigerators and developed a set of implantable models in management, technique, talent, capital and corporate culture.
The phase of Diversification strategy (1991-1998): culture activated “shocked fish”:
Summary: In the 1990s, the state encourages mergers and acquisitions. After merging and restructuring, some enterprises could not develop, or considered specialization rather than diversification. The creation of Haier was the merging of eighteen domestic enterprises with the thought of ?Haier culture activated shocked fish?, and Haier entered into an era of vast development space in diversified business and expansion. At that time, there was fierce competition in the home appliance market and quality had become a basic requirement for
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consumers. Haier took the lead to provide the star service system. While home appliance manufacturers focused on price wars, Haier won competitive advantage through superior quality. In this phase, Haier began to implement the OEC (Overall Every Control and Clear) management approach, i.e., everyone shall conduct overall control of and clear everything that needs to be done every day, with the aim to ?accomplish what‘s planned each day; evaluate and improve what‘s accomplished each day?. This management approach also became the cornerstone of Haier‘s innovation.
The phase of Internationalization strategy (1998-2005): Go abroad and export to create a famous brand:
Summary: In the late 1990s, with China‘s entry into WTO, many enterprises went abroad at the call of the state. But they found it was difficult to develop overseas, so they returned while continuing with licensing agreements. Haier thought that going abroad did not just mean earning foreign exchange. Instead, enterprises should create China‘s own brands. Therefore, Haier proposed the ?three steps strategy? of ?Get in, Move into mainstream, Leadership?. Haier put forward the thought of ?difficult first, easy later? and created a famous brand in developed countries. After the brand was established, Haier entered the markets of developing countries, and created the localization mode of ?three in one?, i.e., combining design, manufacturing and sales into one. In this phase, Haier implemented ?Market Chain? management. Such a management system was based on computer information systems and centered on order information flow to improve the logistics and capital flow and to rebuild the business process. This innovation management system facilitated information flow within the enterprise, and encouraged employees to align their value orientation with the needs of users.
The phase of Global brand strategy: Consolidating global resources and creating a global brand:
Summary: The Internet era brings segmentation of the market, and the mode of traditional enterprises featuring ?production-storing-selling? can no longer satisfy the tailored needs of users. The enterprises must shift from the enterprise-centric sale of products to the user-centric sale of services. That is, they should shift to the ?demand manufacturing and delivery? mode. The Internet also brings integration of the global economy, and the relationship between internationalization and globalization is one of logical improvement. Internationalization means creating international brands with the own resources of the enterprises, while globalization means making use of global resources to create localized mainstream brands. They are quite different. Therefore, Haier consolidates the global resources in R&D, manufacturing, and marketing to create a global brand. In this phase, the business mode created by Haier to develop consumers in the Internet era is a ?Win-win Mode of Individual-Goal Combination?.
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INTERNSHIP REPORT Shared values of Haier:
?Shared values? refers to the underlying attitude of the company; a combination of core Values and core purpose. Core values are the essential guiding principles and doctrines that do not require external justification and that the company would keep even if business circumstances changed Shared values also includes a core purpose, a firm‘s stated business goals, how it will achieve them, and the values it will uphold in doing so; a mission statement.
Shared Values and Haier The Haier shared values variable has the following components. 1- Leverage the Haier experience: Throughout all marketing communications (everything from press releases, websites, to annual reports), Haier consistently refers to the Haier Experience. However, the Haier experience itself is never defined. The website states that an objective is to deliver an ?inspiring, inviting, and reliable? product but that hardly defines an experience. The Haier experience appears to be more than simply selling Refrigerators, it is the conscious decision to position the brand as a lifestyle entity, capturing an attitude, and therefore is a reinvention of Refrigerators itself. Any retailer can sell Refrigerators; Haier sells an experience. This experience includes Refrigerators, friendly staff, interesting music, and a comfortable meeting place.
2- The Haier Mission Statement: As posted at Haier.com, the mission statement for the firm is: ?Establish Haier as the premier purveyor of the finest Refrigerators in the world while maintaining our uncompromising principles while we grow. The following six guiding principles will help us measure the appropriateness of our decisions: ? Provide a great work environment and treat each other with respect and dignity. ? Embrace diversity as an essential component in the way we do business. ? Apply the highest standards of Manufacturing Refrigerators. ? Develop enthusiastically satisfied customers all the time.
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? Contribute positively to our communities and our environment. ? Recognize that profitability is essential to our future success?.
3- Environmental mission statement: Haier also circulates an environmental mission statement: ?Haier is committed to a role of environmental leadership in all facets of our business. We fulfill this mission by a commitment to: ? Understanding of environmental issues and sharing information with our partners. ? Developing innovative and flexible solutions to bring about change. ? Striving to buy, sell, and use environmentally friendly products. ? Recognizing that fiscal responsibility is essential to our environmental future. ? Instilling environmental responsibility as a corporate value.
?
Measuring and monitoring progress on each project
Structure of Haier:
A company‘s structure refers to the way it is organized. Structure and Haier Haier has a functional structure (human resources, marketing, corporate social Responsibility, public affairs). The corporate environment at Haier is very loosely structured, emphasizing the company‘s constant need for new ideas and employee input Haier refers to its employees as partners, and extends to all of them (even part time help working at least twenty hours a week), benefits such as health coverage and stock options. Haier believes creating the value of brand equity occurs through investing in its employees who are the face of the brand rather than in traditional tools like advertising; before a company can expect trust from its customers, it must have the trust of its employees.
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INTERNSHIP REPORT Systems of Haier:
Although the term ?systems? is often thought of as synonymous with information systems, in this framework, systems refer to the procedures and processes and competitive advantages present within the organization.
Skills of Haier:
In this framework, ?skills? refers to the distinct capabilities or dominating attributes that distinguish a firm from its competitors. Skills and Haier Haier has several importance skill advantages: Friendly, knowledgeable staff: Although many firms claim to have a competitive advantage with their staff, high quality knowledgeable employees are especially important for customer focused operations like retail. Ability to reinforce the Haier Experience through non-retail operations: The ability of employees to consistently identify other non-retail methods of maintaining and extending the Haier experience is a major skill of the corporation.
Staff of Haier:
Within the framework of the 7S model, ?staff? refers to the quality of people. Traditionally, staff is often treated in one of two ways. On one hand, there are appraisal systems, pay scales, or formal training. On the other hand, there is employee morale, attitude, motivation, and behavior.
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INTERNSHIP REPORT
Staff and Haier Haier has several advantages relating to staff: Customer service: As discussed in the skills section above, it is important for a retail operation to have high quality employees, since the employee is the direct link to the customer, and subsequently embodies the brand. Lower employee turnover: Haier, through generous benefits packages and unique, flexible working environments, is probably faced with lower employee turnover rates than its competitors. The retention of qualified, trained employees is important. Flexible work environment: The apparently flexible work environment for Haier encourages its employees to be innovative, creative, and to take chances. Strong vision: The vision for Haier is reinforced throughout the organization. Unlike some firms that have a mission statement framed on a wall at head office, the mission, goals and vision for Haier seem to be reinforced at all levels of the organization. This reinforcement leads to support and buy in from employees, who are more likely to hold these or similar values as being important. Style of Haier:
Within this framework, style refers to patterns of actions among organizational participants, especially managers, about how people choose to spend their time. This is more than simply the personality of a top-management team or the way that team is perceived within the organization. This phenomenon is best illustrated through mergers; in most mergers, no matter how closely related the businesses, the task of integrating two firms is a problem no less difficult than combining two cultures Style and Haier Based on personal observation, the style for the organization can be defined as innovative, flexible, collegial and team-orientated.
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INTERNSHIP REPORT
Summary of 7?s Mckinsey Model: Shared Values Shared Values Strategy Consistent Structure No Changes Required Systems Consistent Consistent Consistent Style Consistent Consistent Consistent Consistent Staff Lack of Consistent Consistent Consistent Consistent Awareness Skills Consistent Consistent Consistent Consistent Consistent Consistent Consistent Consistent Consistent Consistent Consistent Consistent Consistent Consistent Consistent No Changes Required Consistent Consistent Consistent Strategy Structure Systems Style Staff Skills
Consistent Consistent Consistent Consistent Consistent Consistent
No Consistent Changes Required
No Changes Required
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INTERNSHIP REPORT SWOT Analysis of Haier: Strengths:
? Leading manufacturer of appliances ? Global availability ? Setting the Standard ? Chinese No.1 Brand. ? Old Company. ? Global no.1 Brand. ? High end products are well accepted. ? Good market share in western India. ? Strong presence in home appliances segment. ? Big distributors are stocking many of Haier‘s products. ? Large number of sales outlet 30 franchised stores & 5500 sales points.
? Unique corporate culture, qualified employees, core technology, excellent after-sale service system.
? All Products are Available in this Brand.
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INTERNSHIP REPORT Weakness:
?
Very weak distribution network in central India. Marketing. Weak service agent network Weak logistics as a result accumulation of trade stocks and aging stocks. Sales seasonality in specific segment hindering growth.
?
?
?
?
? Difficult to adapt to the international market - little efficient breakthrough among international competitors.
? Relatively low input, low output & low efficiency.
? More attention on traditional electrical products.
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INTERNSHIP REPORT Opportunities:
? Economic globalization - ?go out? ? Core technology ? China‘s access to WTO - easier to enter global market ? Domestic and foreign business partners ? North-east a potential market is still largely untapped. ? Mobiles and cellular phone market offers new growth opportunities. ? SPIN(Situation, Problem, Implication, Need) selling strategy for HEC‘s ? Consumer electronics segment is booming and set to grow at 14% CAGR, Haier‘s produt offerings catering to this segment are limited. ? Small appliance market set to grow. ? Tie up with big retailers will help in growth ? High disposable income and higher number of Nuclear Families in the society.
? Expansion. ? Technology advancement.
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INTERNSHIP REPORT Threats:
? Medical Freezers are not selling. ? Product portfolio is weak. ? Overall weak distribution network compared to competitors. ? Only selected products are selling from the entire Product Portfolio.
? Deficient funds – lack of power & less competitive.
? Global Expansion ? Traditional mode of thinking. ? Stronger competitors.
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INTERNSHIP REPORT Annual Report:
HAIER APPLIANCES (INDIA) PRIVATE LIMITED
Balance Sheet as at June 30, 2012 (0) Schedules June 30, 2012 Pune
SOURCES OF FUNDS Shareholders' Funds (a) Share capital (b) Share application money pending allotment Loan Funds (a) Secured Loans (b) Accounts Payable - Trade Haier TOTAL APPLICATION OF FUNDS Fixed Assets (a) Gross block (b) Less : Accumulated depreciation (c) Net block (d) Capital Work in Progress
1
786,499,479 786,499,479
2
229,706,482 103,693,478 333,399,960 1,119,899,439
4 784,389,117 259,860,575 524,528,542 161,983,194 686,511,736 690,060
Intangible Assets Current Assets, Loans and Advances (a) Inventories (b) Sundry debtors (c) Cash and bank balances (d) Loans and advances (A) Less: Current Liabilities and Provisions (a) Current liabilities (b) Provisions (c) Account Receivable - Haier (Adv Received from Haier Middle East) Net Current Assets Profit & Loss Account TOTAL (B) (A-B) 9 10
5 6 7 8
202,265,190 30,500,899 44,580,310 467,161,139 744,507,538 423,923,803 4,951,056 190,204,187 619,079,047 125,428,491 307,269,151 1,119,899,439
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INTERNSHIP REPORT Profit and Loss Statement:
HAIER APPLIANCES (INDIA) PRIVATE LIMITED
Profit and Loss Account for the year ended June 30, 2012
Schedules
June 30, 2012 Pune
INCOME Turnover (Gross) Less: Excise duty Turnover (Net) Other income Total
12
13
212,205,442 212,205,442 26,030,918 238,236,360
EXPENDITURE Purchase of trading goods Raw material & components consumed Personnel expenses Operating and other expenses (Increase)/ Decrease in stocks Depreciation / Amortization Financial expenses Total Profit/ (Loss) before extra ordinary item & tax Current Tax Deferred Tax charged /(credit) Fringe Benefit Tax Total Tax Expenses Profit/ (Loss) after tax for the year Prior Period Items Net Profit/ (Loss) for the year Balance Brought Forward from Previous Year Balance Carried To Balance Sheet
15 15 16 4 17
17,142,640 32,252,603 86,881,123 45,321,090 (5,636,940) 35,140,105 6,326,489 217,427,110 20,809,250 20,809,250 20,809,250 (328,078,401) (307,269,151)
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INTERNSHIP REPORT Chapter – VI Summary Findings: Liquidity Ratios: Current Ratio = Total Current Assets/Total Current Liabilities
= $744507538/$423923803 = 1.756
COMPARATIVE ANALYSIS Balance sheet
Mar’10 Mar’09 Increase/ decrease Increase/ decrease percentage Source of funds Share holders fund 1035141350 45260000 1035141349 0 989881350 0
Share capital Share application money Performance share capital Reserves and surplus Total Fund :
95.63 0.00
1035141350 1035141350 Loan funds 479777506 30000000
0
0
Secured loans Unsecured loans Total
449777506
1499.26
1514918856 1065141350
449777506
42.23
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INTERNSHIP REPORT
Gross block(asset) Less: Revaluation reserve(revalued assets) Less: Accumulated depreciation(depreciation till current year ) Net block Capital work in progress(including capital advance of previous yr) Investment(not given) Total Intangible assets Current assets , loans, Advances (a)Inventories (b)Sundry Debtors 493886905 (c) cash & bank balance 239590383 (d) loans & Advances 433136516 (A) 1956077510 1188204360 Less :Current liabilities & provision (a)Current liabilities 1766623880 1602391021 (b)Provisions 92370025 (B) 1858993905 1676839536 182154369 74448515 17921510 10.86 164232859 24.07 10.25 767873150 334401558 98734958 64.62 52002131 187588252 29.53 389534424 104352481 360.73 597496783 7827482 430472160 4946790 167024623 2880692 38.80 58.23 -241403352 -273464589 32061237 -11.72 Uses of funds Fixed assets 659932748 703591547 -43658799 -6.21
418529396 178967387
430126958 345202
-11597562 178622185
-2.696 51744.25
91.49 789463706 412266247 377197459 26.79
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INTERNSHIP REPORT
Net Current Assets -119.87 (A-B) 97083605 -488635176 585718781
-27.35 Profit & loss Account Total 812510986 1118357666 1514918856 1065141440 -305846680 42.23 449777416
Mar’11
Mar’10
Increase/ decrease
Increase/ decrease percentage
Source of funds Share holders fund 1035141350 1035141350 0 0
Share capital Share application money Performance share capital Reserves and surplus Total Fund :
0
0
1035141350 1035141350
0
0
Secured loans Unsecured loans Total
Loan funds 746114923 479777506 266337417
55.51
1781256273 1514918856 266337417 Uses of funds Fixed assets 840445454 659932748 180512706
17.58
Gross block(asset) Less: Revaluation reserve(revalued assets) Less:
27.35
-301373595
-241403352
-59970243
24.84 68
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INTERNSHIP REPORT
Accumulated depreciation(depreciation till current year ) Net block Capital work in progress(including capital advance of previous yr) Investment(not given) Total Intangible assets Current assets , loans, Advances (a)Inventories (b)Sundry Debtors 408993345 (c) cash & bank balance 179360404 (d) loans & Advances (A) Less :Current liabilities & provision (a)Current liabilities 1860059287 1766623880 (b)Provisions 123176088 (B) 1983235375 1858993905 124241470 Net Current Assets 97083605 276110454 -284.40 92370025 30806063 6.68 93435407 33.35 5.29 -44239170 1804208526 1956077510 151868984 388897346 433136516 239590383 -60229979 -10.21 -7.76 493886905 -84893560 -25.14 557263227 5037297 597496783 7827482 -40233556 -2790185 -6.73 -35.65 539071859 18191368 418529396 120542463 178967387 160776019 28.80 -89.84
4.75 826957431 789463706 37493725 -17.19
(A-B)
-179026849
72.06 Profit & loss Account 1397982598 812510986 585471612
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INTERNSHIP REPORT
17.58 Total 1781256273 1514918856 266337417
Income statement:
? The comparative income statement given above shows that there has been An increase in turnover 13.77% in 2010-11 ? Expenses in 2009-10 is 53.60% And in 2010-11 is 31.01%
Mar’10
Mar’09
Increase or decrease in amounts
Increase or decrease in percentage (%) 78.72 87.70 78.43 37.99 74.94 129.00 29.16 27.93 46.04 1042.00 -39.61 -47.88 53.60
INCOME
Turnover(gross) Less: Excise duty Turnover(Net) Other income TOTAL: EXPENDITURE Purchase on trading goods Raw material consumed Personnel expenses Operating & other expenses (Increase)/decrease in inventory Depreciation/Amortization Financial expenses TOTAL: 5176394459 2896340383 2280054076 169808198 90469043 79339155 5006586261 2805871340 2200714921 366409874 265526998 100882876 5372996135 3071398338 2301597797 2510094542 1096111285 1413983257 1588619684 1229964925 359002072 751581349 280621999 514624941 358654759 78380073 236956408 -232253218 -254542493 60094105 -22289275 99502301 -39408196
52300196 100347327 -48047131 5067149455 3298883503 1768265952
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INTERNSHIP REPORT
Profit/(loss) before tax & extraordinary items 305846680 Provision for tax Fring benefit tax Total tax expenses Net profit/(loss) after tax 305846680 Balance brought forward from previous year Balance carried to balance sheet 1118357666 -228524698 -228524698 -889832968 -812510986 1118357666 25.68 0 -227485165 -1039533 1039533 534371378 -233.84 1039533 -1039533 533331845 -234.45
305846680
-27.35
Mar ‘11
Mar’10
Increase or decrease in amounts
Increase or decrease in percentage (%) 13.77 18.88 13.60 9.37 13.31 22.82 22.23 13.48 60.86 -43.36
INCOME
Turnover(gross) Less: Excise duty Turnover(Net) Other income TOTAL: EXPENDITURE Purchase on trading goods Raw material consumed Personnel expenses Operating & other expenses (Increase)/decrease in inventory 5889311760 5176394459 201871088 169808198 5687440672 5006586261 402515088 368034545 6089955760 5374620806 3082839749 2510094542 1943831214 1590244355 407381358 1208961436 359002072 751581349 712917301 32062890 680854411 34480543 715334954 572745207 353586859 48379286 457380087 110369130 -144173363 -254542493 71
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INTERNSHIP REPORT
Depreciation/Amortization Financial expenses TOTAL: Profit/(loss) before tax & extraordinary items 77514969 60094105 17420864 28.99 22.54 31.01 -289.80 64089146 52300196 11788950 1571670383 6640444509 5068774126 -886335429
Provision for tax Findin benefit tax Total tax expenses Net profit/(loss) after tax
-580488749 0 0
305846680 0 0
-886335429 -580488749 305846680 305846680 -812510986 1118357666 1392999735 -812510986
-289.80 -27.35
Balance brought forward from previous year Balance carried to balance sheet
-580488749
71.44
COMMON SIZE ANALYSIS
Balance sheet:
Mar'11 Fixed assets 840445454 Mar'10 46.58 659932748 33.74 Mar,09 703591547 59.21
Gross block(asset) Less: Revaluation reserve(revalued assets) Less: Accumulated depreciation(depreciation till current year ) Net block Capital work in progress(including capital advance of previous yr) Investment(not given) Total Intangible assets Current assets , loans, Advances
-301373595
-16.70
-241403352
-12.34
-273464589
-23.01
539071859 18191368
29.88 1.01
418529396 178967387
21.40 9.15
430126958 345202
36.20 0.03
557263227 5037297
30.89 0.279
597496783 7827482
30.55 0.400
430472160 4946790
36.23 0.416
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INTERNSHIP REPORT
(a)Inventories (b)Sundry Debtors (c) cash & bank balance (d) loans & Advances (A) Less :Current liabilities & provision (a)Current liabilities (b)Provisions TOTAL LIABILITIES (B) 826957431 408993345 179360404 388897346 1804208526 21.56 45.83 22.67 9.94 789463706 493886905 239590383 433136516 100.00 1956077510 22.14 40.36 25.25 12.25 412266247 389534424 52002131 334401558 100.00 1188204360 28.14 100.00 34.70 32.78 4.38
1860059287 123176088 1983235375
93.79 1766623880 6.21 92370025
95.03 1602391021 4.97 74448515
95.56 4.44 100.00
100.00 1858993905
100.00 1676839536
Income statement:
Mar ‘11 Mar’10 5176394459 169808198 5006586261 368034545 5374620806 54.20 34.18 7.16 21.26 -2.53 -144173363 77514969 1.36 -254542493 60094105 52300196 5068774126 2510094542 1590244355 359002072 751581349 50.14 31.76 7.17 15.01 -5.08 1.20 1.04 101.24 -22289275 99502301 100347327 3298883503 Mar’09 2896340383 90469043 280581340 265526998 546108338 1096111285 1229964925 280621999 514624941 390.66 438.36 100.01 183.41 -7.94 35.46 35.76 1175.7 73
INCOME
Turnover(gross) Less: Excise duty Turnover(Net) Other income TOTAL: EXPENDITURE Purchase on trading goods Raw material consumed Personnel expenses Operating & other expenses (Increase)/decrease in inventory Depreciation/Amortizatio n Financial expenses TOTAL: 5889311760 201871088 5687440672 402515088 6089955760 3082839749 1943831214 407381358 1208961436
64089146 1.13 6640444509 116.76
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INTERNSHIP REPORT
3 Profit/(loss) before tax & extraordinary items Provision for tax Finding benefit tax Total tax expenses Net profit/(loss) after tax Balance brought forward from previous year Balance carried to balance sheet -580488749 0 0 -580488749 -812510986 1392999735 305846680 0 0 305846680 1118357666 -812510986 -227485165 -1039533 1039533 -228524698 -889832968 -1118357666
RATIO ANALYSIS
CURRENT RATIO: Current ratio is the relationship between current assets and current liabilities. It is expressed as Current ratio = {current assets / current liabilities} Current liabilities(Rs) 1602391021 1766623880 1860059287
Year 2009 2010 2011
Current assets (Rs)
853802802 1522940994 1415311180
Ratio 0.5 0.9 0.8
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INTERNSHIP REPORT
Current Ratio
1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 2009 2010 2011 ratio
INTERPRETATION:-
During 2009, 2010, 2011the current ratio of the company was 0.5, 0.9 and 0.8. In 2011 current assets are 0.8 times current liabilities. This is favorable. Ideal current ratio is 2:1.
QUICK RATIO:
Quick ratio is the relationship between quick assets and current assets and current assets means current assets-stock-prepaid expenses. Quick ratio is also means Liquid ratio or Acid test ratio. This ratio may be expressed as follows.
Quick ratio = Quick assets Current liabilities Year 1 Jan.-31 Dec.2009 1 Jan.- 31 Dec.2010 1 Jan.- 31 Dec.2011 Quick assets(RS)
441536555 733477288 588353749
Current liabilities(RS) 1602391021 1766623880 1860059287
Ratio 0.3 0.4 0.3
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INTERNSHIP REPORT
Quick ratio
0.45 0.4 0.35 0.3 0.25 0.2 0.15 0.1 0.05 0 2009 2010 2011 ratio
INTERPRETATION
uring 2009, 2010 and 2011 the quick ratio of the company was 0.3, 0.4 and 0.3 times. These are less than the standard ratio of 1:1 INVENTORY TURNOVER RATIO: Inventory Turnover Ratio = Cost Of Goods Sold / Average Inventory.
Year 1Jan-31Dec2010 1Jan-31Dec2011
Cost Of Goods Sold 4700739581 5914925837
Average Inventory 600864976.5 808210568.5
Ratio 7.8 7.3
Reciprocal Days 46 49
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INTERNSHIP REPORT
Inventory turnover ratio
7.9 7.8 7.7 7.6 7.5 7.4 7.3 7.2 7.1 7 2010 2011
Inventory turnover ratio
INTERPRETATIONuring 2010 and 2011 the company was turning its inventory of finished goods into sales 7.8 and 7.3 times in a year. It has shown a decreasing trend during the period of study. The reciprocal of inventory turnover which gives the average inventory holdings in a year shows that company was holding inventory for 46 and 49 days in a year. During the year 2011 company increased the holding period.
FIXED ASSETS TURNOVER RATIO:Fixed Assets Turnover Ratio = Sales / Net Fixed Assets.
Year 1Jan-31Dec2009 1Jan-31Dec2010 1Jan-31Dec2011
Sales
2805871340 5006586261 5687440672
Net Fixed Assets
430472160 597496783 557263227
Ratio 6.52 8.38 10.21
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INTERNSHIP REPORT
Fixed assets turnover ratio
12 10 8 6 4 2 0 2009 2010 2011
ratio
INTERPRETATIONuring 2009, 2010 the FAT Ratio was 6.52, 8.38 and 2011 was 8.21. It indicate the organization achieve maximum sale with the minimum investment in fixed assets 2011.
TOLAL ASSETS TURNOVER RATIO:Total Assets Turnover Ratio = Sales / Total Assets. Year 1Jan-31Dec2009 1Jan-31Dec2010 1Jan-31Dec2011 Sales
2805871340 5006586261 5687440672
Total Assets 1289221662 2128265259 1977611704
Ratio 2.18 2.35 2.88
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INTERNSHIP REPORT
Total assets turnover ratio
3.5 3 2.5 2 1.5 1 0.5 0 2009 2010 2011 ratio
INTERPRETATIONuring 2009 the Net Assets Turnover Ratio of the company was 2.18 times, it implies the company is producing Rs 2.18 of sales for 1 rupee of capital employed in Net Assets. During 2010 the Net Assets Turnover Ratio of the Company was 2.35 times. And that for 2011 is 2.88.
CURRENT ASSETS TURN OVER RATIO:
Current Assets Turnover Ratio = {Sales / Net Current Assets}
Year 1Jan-31Dec2009 1Jan-31Dec2010 1Jan-31Dec2011
Sales
2805871340 5006586261 5687440672
Net current Assets -488635176 97083605 -179026849
Ratio -5.74226 51.56984 -31.7686
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INTERNSHIP REPORT
Current assets turnover ratio
60 50 40 30 20 10 0 -10 -20 -30 -40 2009 2010 2011 ratio
Interpretation: During 2009, the Current Assets Turnover ratio was -5.74, and 2010 was 51.56 times. It indicate the organization achieve maximum sale with the minimum investment in current assets.
NET WORKING CAPITAL RATIO:Net working capital = Net Working capital / Net Assets.
Year 1Jan-31Dec2009 1Jan-31Dec2010 1Jan-31Dec2011
Net Working Capital -748588219 -243682886 -444748107
Net Assets -53216226 702407870 383273675
Ratio 14.06 -0.35 -1.16
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INTERNSHIP REPORT
Net working capital Ratio
16 14 12 10 8 ratio 6 4 2 0 -2 2009 2010 2011
INTERPRETATION: During2009, The Net Working Capital Ratio of the Company was 14.06 and -0.35 for 2010. For 2011 For it is -1.16. All the years of Analysis, for one rupee of Net assets with the company, it Has less than one rupee of Net Working Capital. Except for 2009.
DEBT EQUITY RATIO
Debt equity ratio= Total debt / Net worth. Total debt= long term debt + current assets
Year 1Jan-31Dec2009 1Jan-31Dec2010 1Jan-31Dec2011
Total Debt
1243337226 2016827899 1824304525
Net worth
1035141350 1035141350 1035141350
Ratio 1.20 1.95 1.76
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INTERNSHIP REPORT
Debt equity Ratio
2.5 2 1.5 1 0.5 0 2009 2010 2011 Ratio
INTERPRETATION: This ratio indicates financial strength of company. Lower the ratio shows greater security available to the creditors. It shows debt to equity capital ratio. In 2009 it was 1.2. In 2010 it is 1.95 i.e. it increased and again in 2011 it decreases to 1.76.
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INTERNSHIP REPORT LEARNING EXPERIENCE
The experience in Haier enriched the knowledge. To start with, Haier is an industry where human resources and technology come together to manufacture products that gain worldwide recognition strategically situated at Ranjangaon (Pune). My overall experience in the company was very good with the support of the company employees and the response got from the management of Haier was appreciable. I would like to mention the nature of Mr.Sanjay Kubal, who guided me in this project without which my project would not have been successful. The atmosphere & working condition were encouraging in the company. During the first week, it was totally a new experience entering in to such a big organization. On the first day of the training had to go a safety training which gave me a chance to understand the companies importance to safety of its employees and workers, factory manager detailed me very clearly about the company & guidelines to be followed with respect to maintaining the discipline of the organization and also informed the safety measures. 17 weeks of project training in the company helped me to know the practicalities. First 4 weeks were about studying the organization as to how it works in management aspects & the policies & procedures. Totally it was a highly useful training in the company. The procedure of production in various parts of the production plant, the safety measures taken by the company where the safety is paramount in the company, core values of the company , the existence of the company in the global and domestic steel market, companies history, etc were studied. Other 13 weeks was all about studying the Accounts and Finance Department, and work on the topic allotted to me by my External Guide. After collecting the entire necessary secondary data External guide started explaining various Departments of accounts and finance. This helped me understand the company’s financial working of the Haier. In between one full week the management had arranged a plant visit for all the management project students which helped us to understand the Industry very clearly study all the various plants in Haier. Understanding of Financial affairs was not possible without the support of my External guide Mr.Sanjay Kubal, (AGM, FINANCE, and Haier). The success of organization is the result of co-ordination between the management and workers in the company.
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INTERNSHIP REPORT Suggestions:
? Working Culture. ? Plant Timings.
? The company not improved current ratio to taking suitable measures, so that it meets the ideal ratio.
? The quick ratio is low. The company may increase the investment on quick assets to meet the ideal ratio. ? Current assets turnover ratio is reduced so steps can be taken for utilization of current assets.
? The company can increase the debt content in its capital structure to give higher
return to its shareholders which shows better debt equity ratio. ? If we see the current liabilities, it is going on increasing year by year. The management should pay out its liabilities as it may affect the liquidity position of the company.
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INTERNSHIP REPORT Appendix: Profit and loss Statement of Haier:
HAIER APPLIANCES (INDIA) PRIVATE LIMITED
Profit and Loss Account for the year ended June 30, 2012
Schedules
June 30, 2012 Pune
INCOME Turnover (Gross) Less: Excise duty Turnover (Net) Other income Total
12
13
212,205,442 212,205,442 26,030,918 238,236,360
EXPENDITURE Purchase of trading goods Raw material & components consumed Personnel expenses Operating and other expenses (Increase)/ Decrease in stocks Depreciation / Amortization Financial expenses Total Profit/ (Loss) before extra ordinary item & tax Current Tax Deferred Tax charged /(credit) Fringe Benefit Tax Total Tax Expenses Profit/ (Loss) after tax for the year Prior Period Items Net Profit/ (Loss) for the year Balance Brought Forward from Previous Year Balance Carried To Balance Sheet
15 15 16 4 17
17,142,640 32,252,603 86,881,123 45,321,090 (5,636,940) 35,140,105 6,326,489 217,427,110 20,809,250 20,809,250 20,809,250 (328,078,401) (307,269,151)
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INTERNSHIP REPORT Balance Sheet of Haier:
HAIER APPLIANCES (INDIA) PRIVATE LIMITED
Balance Sheet as at June 30, 2012 (0) Schedules June 30, 2012 Pune
SOURCES OF FUNDS Shareholders' Funds (a) Share capital (b) Share applicaton money pending allotment Loan Funds (a) Secured Loans (b) Accounts Payable - Trade Haier TOTAL APPLICATION OF FUNDS Fixed Assets (a) Gross block (b) Less : Accumulated depreciation (c) Net block (d) Capital Work in Progress
1
786,499,479 786,499,479
2
229,706,482 103,693,478 333,399,960 1,119,899,439
4 784,389,117 259,860,575 524,528,542 161,983,194 686,511,736 690,060
Intangible Assets Current Assets, Loans and Advances (a) Inventories (b) Sundry debtors (c) Cash and bank balances (d) Loans and advances (A) Less: Current Liabilities and Provisions (a) Current liabilities (b) Provisions (c) Account Receivable - Haier (Adv Received from Haier Middle East) Net Current Assets Profit & Loss Account TOTAL Notes to Accounts 19 (B) (A-B) 9 10
5 6 7 8
202,265,190 30,500,899 44,580,310 467,161,139 744,507,538 423,923,803 4,951,056 190,204,187 619,079,047 125,428,491 307,269,151 1,119,899,439
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INTERNSHIP REPORT Websites:
http://www.haierksa.com/detail.php?id=15
http://www.fundinguniverse.com/company-histories/haier-group-corporation-history/
http://en.wikipedia.org/wiki/Haier
Global no.1 http://www.moneycontrol.com/news/business/haier-refrigeration-appliance-ranked-globalno-1-_373591.html http://www.telegraphindia.com/external/display.jsp?mode=details&id=29634
*http://www.newsweek.com/2010/12/22/10-top-innovative-companies/haier.html
http://www.haier.net/en/about_haier/history/
https://www.google.co.in/
www.haier.co.in
www.studyfinance.com
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INTERNSHIP REPORT Articles: Article1: Raising Haier
People respect the leadership of an organization for different reasons in different periods. When you start a business, your employees are willing to follow you if you set a good example and bear more hardships than they do. In my early days at Haier, when I went on a business trip, I often had to set out right away. If there was no seat available on the train, I would spend two Yuan to rent a small camp stool and sit in the aisle. That was seen and heeded by employees. Later, it‘s conviction that appeals to people. When we started building Haier Industrial Park in the 1990s, people held back, expecting problems to arise. But as it became clear to them that I‘d spare no effort to make it a reality, everyone got on board. Today, I believe, what Haier‘s employees need is to be allowed to make decisions for themselves and not to feel that they are following me in their work. The philosopher Lao-tzu said, ?In the highest antiquity, the people did not know that there were rulers.? I take his meaning to be that a leader whose existence is unknown to his subordinates is really the most brilliant one.
Five Catties of Fish
When I took the job of director of the Qingdao Refrigerator Factory in December 1984, the existence of the company was at stake. Indeed, most people thought its situation was hopeless. The factory‘s net debt stood at RMB1.47 million, and I was the fourth director appointed in that single year. The previous three had either left on their own or been kicked out—no one was able to shoulder the responsibility. More than 800 workers were anxiously awaiting pay that was several months in arrears. Not surprisingly, the employee turnover rate was high. An additional 51 workers applied for a transfer to a different company when my appointment was announced. There was no time for idle talk. The first thing I focused on was the employees‘ salaries. When I think back to the first half year of my tenure that is the challenge I vividly remember, because I had to face it every month. We were not a state-owned enterprise, and given our debt load, the banks were not willing to lend money to us. But luckily, another option materialized. China‘s policy of reform and opening to the outside world meant that wealth was accumulating beyond the cities, in the urban-rural functional areas. I was able to borrow money from the nearby production brigade. Certainly, employees were very happy simply to get their pay, but I wanted to go further. Soon after my arrival, when the Chinese Lunar New Year came around, I borrowed again to buy each worker a New Year‘s gift of five catties of fish. It may seem laughable now, but that gesture had
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an immediate and positive effect. It put hope into employees‘ hearts that our factory had a chance. I then borrowed tens of thousands more Yuan to replace the truck that was many employees‘ transportation to and from work. The truck made for a terrible ride, especially for those who carried children in their arms, so I went to the added expense of buying a bus. Again, it was a small change by today‘s standards, but it had a real impact on morale. How could a factory that was obviously getting better and better be about to fail? Once I had won some goodwill, I started demanding good work. There was very little discipline in the factory up to that point; people tended to do things as they saw fit. Rules and regulations existed in writing but had never been seriously upheld. I spelled out the terms for people: I would guarantee payment of their salaries every month, but only on the condition that they strictly obeyed the working disciplines I established. Then I set forth my new rules, beginning with ?Urinating or defecating in workshops is prohibited? and ?Stealing company property is prohibited.? These were actual habits to be combated. The government at that time did not allow companies to fire workers. Those who violated factory rules could be given demerits or, much more seriously, be deprived of factory membership (that is, no longer part of the company‘s collective ownership) and placed on probation. Once, when we were cleaning a warehouse, some workers were seen carrying away materials. We caught one of them and within an hour posted the consequences on the factory bulletin board: That worker was deprived of factory membership and placed on probation. This punishment came as a huge shock to people.
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INTERNSHIP REPORT Article 2: Haier to buy Panasonic?s Sanyo white goods units Haier to buy Sanyo washing machine, fridge units in Japan, SE Asia and the deal value about $130 million
Tokyo: China‘s Haier will buy Panasonic Corp‘s Sanyo Electric washing machine and refrigerator units in Japan and Southeast Asia for about $130 million, in a move that will give the Chinese appliance giant better access to the world‘s third-largest economy, sources said. Panasonic said on Thursday the two companies have agreed with the transaction, but did not disclose the financial terms. The sale fits in with Panasonic‘s strategy to restructure businesses that overlapped with those of Sanyo Electric, the Japanese electronics maker said. Haier, which outbid at least one rival eyeing Sanyo‘s energy-efficient refrigeration technology with the ¥10 billion deal, has been seeking to expand in Japan‘s tough white goods market, four sources familiar with the matter said. Haier, which partnered with Sanyo in 2002 to gain a toehold in Japan, has taken a share of over 50% in the market for small refrigerators, and has been preparing to compete with Japanese makers head-on in mainstream washers, air conditioners and refrigerators with lower prices, one source said.
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?Japanese makers have an overwhelming market share in Japan only because this is Japan,? said one source involved in a competing bid. ?If Haier can produce a lineup of low-cost and energy-efficient appliances here, it could be a real threat to Japanese manufacturers.? The white goods market in Japan is dominated by domestic heavyweights Toshiba , Mitsubishi Electric and Hitachi as well as Panasonic. More may follow Haier‘s purchase is the latest in a flurry of deals by Chinese firms seeking an entry into Japan. In May, Chinese textile group Shandong Ruji became the biggest shareholder in Japanese apparel maker Renown Inc, while Chinese automaker BYD Co acquired a factory from Japanese metal die maker Ogihara Corp in March. The Haier deal is likely to be followed by similar sales, as Panasonic puts more operations on the block following its acquisition of Sanyo, the sources said. Panasonic could be looking to streamline its semiconductor, battery and TV businesses, Goldman Sachs analyst Takashi Watanabe said. Panasonic will sell Sanyo‘s holdings in about 10 units and affiliates that handle development, manufacturing and sales, the sources said. The units to be sold generate annual revenue of roughly ¥80 billion ($1 billion), one source said. Panasonic and Haier are expected to reach the final agreement by September, Panasonic said. Most of the businesses‘ about 2,000 employees will be transferred to Haier, sources have told Reuters. Panasonic will sell Sanyo‘s washing machine unit Sanyo Aqua and all the shares owned by Sanyo in Konan Denki, a maker of washing machines, to Haier, Panasonic said. The transaction would also include sales of Sanyo‘s shares in refrigerator makers Haier Sanyo Electric and Haier Electric Thailand, to Haier, it said. A Vietnam-based maker and distributor of refrigerators and washing machines, as well as other units in Indonesia, Philippines and Malaysia will also be sold to Haier. Panasonic‘s shares edged up 0.54%at ¥929, compared with a 1.45% fall in the benchmark Nikkei average.
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doc_427794646.docx
CHAPTER-I EXECUTIVE SUMMARY
In these days of modern living, Home Appliances are vital to the development of any modern economy and this industry is considered to be part of the backbone of the country. The project report also gives us an idea about the total amount of fixed assets that are depreciated to their 95% of acquisition value. It also concentrates on physical investigation of the Fixed Assets available in the Haier Plant to verify whether they are in working condition. The level of per capita increases socio-economic development and living standards of the people in any country. It is a product of a large and technologically complex industry having strong forward and backward linkages in terms of material flow and income generation. All major industrial economies are characterized by the existence of a strong Home Appliances industry and the growth of many of these economies has been largely shaped by the strength of their Home Appliances industries in their initial stages of development. This Project gave me a great learning experience and at the same time it gave me enough scope to test and improve my analytical ability. The analysis and advice presented in this Project Report entitled as ?Financial Savings Through Disposal of Idle Fixed Assets ?is based on the research analysis done and also having a survey of the fixed asset in the company premises. The project report comprises of identification of those fixed assets, which are idle and not used in the production process as they are in broken condition or their installation cost is very high. The report also gives knowledge about those fixed assets, which are costing high on maintenance and repairs and are frequently in the maintenance department. This Project as a whole can be divided into two parts. The first part gives an insight about the different Fixed Assets and the accounting of the fixed assets. The need and procedure for the disposal of fixed assets is also mentioned in this project. The project helps us to understand how to make Financial Savings through proper Management of the Fixed Assets. The proper management includes acquisition of fixed assets, its replacement and disposal after a stipulated period. The financial savings can be made by reducing the costs in relation to the fixed assets such as depreciation, repairs and maintenance, operating cost, etc. The project also talks about the accounting standards by ICAI namely AS-10 accounting of Fixed Assets and AS-28 Impairment of the Fixed Assets. The second part of the Project consists of research and analysis to find out whether there is any need to dispose of the fixed assets and investigation to find out which fixed assets can be disposed and which need a replacement.
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INTERNSHIP REPORT CHAPTER-II Introduction
1. Profile of The Industry Haier Group
The Haier Group was founded in 1984 with headquarters in Qingdao, Shandong Province, PRC. In 1984, Haier produced only a single model of refrigerator, today it is one of the world‘s leading white goods home appliance manufacturers. Under the leadership of Chairman and CEO Zhang Ruimin, Haier manufactures home appliances in over 15,100 different specifications under 96 categories. Haier products are now sold in over 100 countries around the globe. Haier has over 240 subsidiary companies, over 110 design centers, plants and trading companies and over 50,000 employees throughout the world. Hailer‘s focused industries include technology research, manufacturing, trade and financial services. The global revenue of Haier for 2005 was RMB 103.4 billion. Haier Electronics Group Co., Ltd. (HKG: 1169), a subsidiary of Haier Group, is listed on the Main Board of the Stock Exchange of Hong Kong. Qingdao Haier Co., Ltd. (SHA: 600690), also a Haier subsidiary, is listed on the Shanghai Stock Exchange. On 12 August, 2005, Haier signed an agreement with Beijing Organizing Committee for the Olympic Games (BOCOG) in Qingdao to become the official sponsor of the 2008 Beijing Olympic Games for white goods home appliances.
History of Haier: 1984-1991:
1990-01-01 In 1990, Haier passed the U.S. UL Certification, marking the commencement of Haier‘s global strategy. In 1990, Haier won honors of Business Management Golden Horse Prize and National Quality Management Prize, which laid a solid foundation for its future development. In June of 1989, the market was seriously impacted by the political disturbance. However, instead of suffering a loss, the shopping rush for
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Haier refrigerators had seen no signs of cooling down despite Haier‘s 12% price increase. Haier won costumers by its high-quality products and services.
1986-01-01
Relying on its high quality, Haier refrigerators brought about a shopping rush in Beijing, Shanghai, and Shenyang. In 1986, former West Germany ambassador to China Pei Peiyi made a special trip from Beijing to Qingdao General Refrigerator Factory. Mr. Pei was deeply impressed by Haier‘s efficient operation under the leadership of the young Director Zhang Ruimin. In the National Refrigerators Appraisal in December of 1988, Haier scored the highest and won the first gold medal in China‘s refrigerator history. Since then, Haier has acquired the leading position in China‘s refrigerator industry. In 1985, Zhang received letters from some consumers complaining about quality problems of Haier refrigerator. Then, in order to arouse quality awareness among the employees, Zhang broke 76 under-level Haier refrigerators, which was afterwards seen as the warning bell of quality in Haier‘s history. After profound analysis on the refrigerator market of fierce competition, Zhang Ruimin proposed the principle of ?a late starter with high starting point? and formulated Haier‘s brand strategy.
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1988-12-01
1985-01-01
1985-01-01
1992-98:
1997-09-01 In September of 1997, with its entering color TV industry as the initiative, Haier went into the industries of black household appliances and information household appliances. And meanwhile, by way of low cost expansion, Haier merged 18 enterprises, such as Shunde Washing Machine Factory of Guangdong Province, Laiyang Electric Iron Factory, Fenghua Refrigerator Factory of Guizhou Province, and Huangshan Television Factory of Hefei, which guaranteed a larger development space for Haier‘s multi-line operation and expansion.
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1997-02-01 In February of 1997, Haier went for the World Household Appliances Expo held in Cologne and offered sales certification to foreign distributors, which not only earned pride for China, but also declared Haier‘s initiation for global market. On June 26th, 1996, Haier won the internationally highest honor Five Star Diamond Award conferred by American Academy of Restaurant and Hospitality Sciences, and Haier CEO Zhang Ruimin was awarded Five Star Personal Lifetime Achievement Award. Haier won consumers‘ recognition in a wider range. Being a constant winner in the selection of ?Most Reliable Light Industrial Product?, Haier had become the No.1 brand among consumers. In July of 1995, the Red Star Household Appliances Company was merged into Haier Group. And, under the strategy of ?digesting shock fish?, Haier injected its own culture and activated the merged enterprise to develop Haier into an increasingly larger scale. On May 22nd, 1995, Haier Group moved to the newly established Haier Industrial Park, marking the initiation of Haier‘s global brand strategy. On April 22nd, 1994, Haier went for the World Earth Day Expo held in U.S. with its Super Freon-free Refrigerator, which was the only environmental product for the Expo produced by a developing country. Haier Industrial Park was progressing each day, with more and more new projects put into service.
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1999-2005:
2004-11-01 In November of 2004, the world most influential financial media Financial Times and the world largest accounting firm Price water horse Coopers jointly publicized the ?World Most Respectable Enterprises and Entrepreneurs? as well as the ranking list of worldwide enterprises. And
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among Chinese enterprises, Haier ranked No.1. 2004-11-08 On November 8th, 2004, globally leading financial newspaper The Wall Street Journal for the first time publicized ?Top 50 Eye-catching Women of Global Business?, and Haier President Yang Miamian was on the list. In October of 2004, Haier Pakistan passed the ISO9001, becoming the first Pakistan-based foreign household appliances brand as well as Haier‘s first overseas plant that had passed such certification. In October of 2004, Fortune publicized ?Top 50 Superwomen of Global Business?, and Haier President Yang Miamian ranked No.8. In August of 2004, Haier was assessed and designated by the Ministry of Science and Technology and China Standards Commission as national pilot manufacturer of research on important technologies as the only listed household appliances company. The 2004, August Fortune Chinese Edition publicized ?China‘s Most Admirable Companies?, and Haier ranked No.2. Among the 7 items of this year's selection. Haier Group ranked among top 3 in 6 items, with three of them ranking No.1, that is, management performance, innovation capability and social responsibility. Haier had integrated with the world top 10 chains. On July 1st, 2004, U.S. retail giant TARGET and Haier jointly achieved the record of selling 7,000 Haier air-conditioners within 7 hours in New York. As shown in the picture, American consumers queue for Haier air-conditioners. On August 9th, 2004, Fortune publicized ?2004 Asia‘s Top 25 Business Leaders?, and Haier CEO Zhang Ruimin ranked No.6. On July 1st, 2004, American consumers queued for Haier air-conditioners at the Manhattan Square, three blocks away from the Haier U.S. Headquarter. And, 7,000 Haier air-conditioners were sold out within 7 hours. On June 28th, 2004, World Brand Summit meanwhile the Press Conference of China‘s Top 500 Valuable Brands was held in Beijing Int'l Hotel, and Haier ranked No.1 with a brand value of 61.237 billion RMB.
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2008:
2008-12-01 Localization plays a significant role in Haier‘s global strategy. Guided by such concept, Haier developed the Fat Refrigerator for India market which won wide recognition among Indian consumers who praised Haier Fat Refrigerator for its ?fast ice making?. In December of 2008, 2009 IF Design Award was publicized, and Haier Three-door Refrigerator, Haier Electrical Water Heater, and Haier Doubleburner Gas Stove won honor of IF International Design Award. This was the first time that China‘s kitchen household appliances enterprise had won such prize, and 2008 was also a year during which Chinese household appliances enterprises had historically won the greatest number of prizes. On December 5th, 2008, the opening ceremony of Qingdao Haier Intercontinental Hotel (built and controlled by Haier) was held in Qingdao International Sailing Center of the Games of the 29th Olympiad. Director of the Standing Committee of Qingdao Municipal People‘s Congress Zhang Ruofei, Deputy Mayor of Qingdao Municipality Hu Shaojun, member of Qingdao Municipal CPC Committee and Chief of the United Front Work Department Zang Aimin, Haier CEO Zhang Ruimin, and Haier President Yang Miamian attended the ribbon-cutting ceremony. On December 1st, 2008 (US time), ?China‘s Most Valuable Brands ?was publicized in New York, and Haier, with a brand value of 80.3 billion RMB, ranked No.1 for the third consecutive year. Lenovo ranked No.2 with a brand value of 68.2 billion RMB. In addition, ?China‘s Brand Founders? was also released at the conference, with Haier CEO Zhang Ruimin and other 7 entrepreneurs winning the honor. ?Brand Figures of the Year? was also publicized, with Haier President Yang Miamian and other 8 celebrities winning the honor. Jointly conducted by RREEF Global and Beijing Famous Brand Asset Evaluation Company, the selection of the China‘s most valuable brands was initiated in 1995 and is a brand research program with the longest history in China. The results of the second bidding project of Household Appliances Go into
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Rural Areas jointly held by Ministry of Commerce and the Ministry of Finance of the People's Republic of China were announced, and Haier Color TV, Mobile phone, and Refrigerator won the biddings. This time, the project had, based on the originally 3 provinces of Shandong, Henan, and Sichuan, recruited another 11 provinces, and apart from color TV, mobile phone and refrigerator, washing machine was added to the list.
2010:
2010-04-30 On April 30th, 2010, member of the Standing Committee of the Political Bureau of the CPC Central Committee and Secretary of Central Commission for Discipline Inspection He Gouging visited Shandong Pavilion of the 2010 Shanghai Expo. Secretary He was also quite interested in Haier‘s internetof-things household appliances platform. On April 28th, 2010, Professor John L Thornton, who was also Chief of World Leading Competence Project of School of Economics and Management at Tsinghua University, visited Haier Group and exchanged ideas with Haier CEO Zhang Ruimin on issues like mode of enterprise management. Mr. Thornton once served as President of Goldman Sachs Group. During their conversation, Zhang Ruimin and Mr. Thornton reached a common ground on issues like strategic/customer positioning, down-ward triangle structure, and the necessity of integrating enterprise development with the use of internet. On April 27th, 2010, led by Headmaster Wang Xibin and accompanied by Assistant Commanding Officer of Jinan Military Area Liu Shanyang and Deputy Secretary of the CPC Qingdao Municipal Committee meanwhile Governor of Qingdao Xia Geng, the 36th National Defense Seminar of National Defense University, which were made up of 81 students, paid an investigation tour to Haier Group and met with Haier CEO Zhang Ruimin. Headmaster Wang was deeply expressed by Haier‘s innovative concepts, and he also spoke highly of the achievements Haier had made. During April 22nd to 23rd, 2010, the domestically first ?China Top 100 Green Enterprises? was jointly publicized by China Entrepreneur Club and Chengdu Municipal Government, and Haier was among the top 100. On April 20th, 2010, ?Report on the Most Beloved World Expo Concepts by China Urban Consumers? was jointly publicized by Global Entrepreneur and
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the world famous research organization Ip sos, and Haier ranked No.1 in the overall report. Still, among the 7 ?Most Human-centered and Socially Responsible indicators?, Haier won 5 of them. With the theme proposed by Shanghai Expo as its selection criterion, the report picked out 20 out of the 76 brands (76 brands including 19 sponsor brands). 2010-04-19 On April, 19th, 2010, Meeting on Operation of Shandong Pavilion of 2010 Shanghai Expo was held by Shandong Provincial Government. During the meeting, it was announced that Haier CEO Zhang Ruimin was invited to act as Honorary Curator of Shandong Pavilion. On April 15th, 2010, Business Week publicized ?World Top 50 Competitive Enterprises of 2010?. Haier ranked No.28 in the selection, and it was also the only listed Chinese enterprise. Apple, Goggle, and Microsoft ranked the top 3. Jointed conducted by Business Week and Boston Consulting Group, the selection was based on innovation capacity and technical contribution of the many enterprises around the world, and it is also of great influence in the industry. This was also the first time that over 50% listed enterprises came from outside the US. On April 14th, 2010, Yushu County of Qinghai Province was stricken with M 7.1 earthquake. In ?Boundless Love—Fund Campaign for Yushu?, the program of CCTV, Haier Group donated 12 million RMB to the disaster area. On April 21st, Haier Group filed a flag at half-mast to mourn over the dead in the disaster. On April 11th, 2010, Chinese Ambassador to India Zhang Yan, accompanied by Counselor Peng Gang, paid an investigation tour to Haier Group. After touring Haier Group, Ambassador Zhang and his wife planted a tree in Haier Industrial Park for a memorial. On April 10th, 2010, led by Professor Yang Qiubao, the Department of Economics of Central Party School paid an investigation tour to Haier Group and met with Haier CEO Zhang Ruimin and Vice Chairman of the Board of Directors of Haier Group Wu Kesong. Professor Yang was quite interested in Haier‘s individual-order combination mode and its new performance appraisal system, and he considered Haier‘s innovation worthy of being studied by other enterprises. On April 8th, 2010, the agreement signing ceremony of ?Chongqing•Shandong Economic & Trade Cooperation? was held in
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Chongqing, and member of the Political Bureau of CPC Central Committee and Secretary of Chongqing Municipal Committee Bo Xilai and Secretary of Shandong Provincial Committee and Chairman of Standing Committee of Shandong Provincial People's Congress Jiang Yikang attended the ceremony. The project of Haier high-end refrigerator production line was also signed at the ceremony, which would satisfy high-end customers of southwest China. On April 9th, led by Secretary Jiang Yikang, Shangdong Delegation paid an investigation tour to Haier Chongqing Industrial Park. 2010-04-02 In spring of 2010, Yunnan, Guizhou, Guangxi were stricken by a drought. On April 2nd, Haier Group, together with China Youth Development Fund, donated 1 million bottles of purified water to over 50 Hope primary schools of the stricken area, and local media spoke highly of Haier‘s sense of shouldering the social responsibilities.
2010-04-15
With the title of ?Spark between Zhang Ruimin and HuYong—Haier‘s No.1 Challenge?, the 2010 April CEIBS Business Review reported about Haier‘s innovation practices on business model transition, with the report article strongly recommended on the cover. The article was written by the famous financial writer meanwhile Professor of Peking University HuYong. Professor Hu said; ?for Haier, its No.1 challenge is to build up a competitative business model?. When reporting on Haier‘s ?win-win mode of individual-order combination?, the professor thought: ?Haier has achieved the initial success in building up a new mode?. Facing the most successful people in China, CEIBS Business Review is China‘s first commercial magazine in the real sense which provides enterprises with effective management solutions. The 2010 Early April Fortune Chinese Edition publicized ?China‘s Most Influential Business Leaders?, and Haier CEO Zhang Ruimin ranked No.1 in household appliances industry. The sixth time of publicizing ?China‘s Most Influential Business Leaders?, Fortune issued the honor list to pay tribute to those who had made contribution to China‘s economy over the past years, and its selection criterion was based on how they had influenced the enterprises, the industry, and the whole world. This was also the third time for Zhang Ruimin to receive the honor.
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Partners
Haier has established an extensive sales network around the globe. Key partners in perspective markets include: ? China: Strategic alliance with Sunning and Gome chain stores ? America: Cooperation with TOP 10 retailers, e.g. SEARS, Lowe's, HOME DEPOT, Best Buy, PC-Richard, Wal-Mart, Sam's, Costco, Brands Mart and Target ? Japan: Cooperation with TOP 10 retailers, e.g. YAMADA, KOJIMA and JUSCO ? Europe: Cooperation with KESA, Media Market and Carrefour
Haier Appliances India started its operations in India in Dec 2003. In Aug 2004 the company made an all-India promotional launch of over 55 products across six different product categories which comprised of refrigerators, color television/DVDs, washing machines, microwave ovens and dishwashers. The company has recently launched its brand of mobile phones in India. Haier Appliances India has got its presence in all the major cities of the country. The company has a strong network that comprises of 18 branch offices, 25 warehouses and over 4,000 retail outlets. The company has got a dealer network of more than 1600 dealers all over the country. In the year 2007, Haier Appliances India entered in to a JV with Sanyo of Japan in order to expand its business in Asia by selling its refrigerators under the Sanyo brand. During the same year, the company also acquired Anchor Daewoo‘s Appliance business which included a refrigerator manufacturing unit at Ranjangaon in Pune.
Haier Group is China's ambassador to appliance stores worldwide. Once named Qingdao Refrigerator Plant, the company climbed from the verge of bankruptcy to establish itself as a world-renown brand. China's #1 appliance manufacturer sells refrigerators and freezers, air conditioners, dishwashers, microwaves, televisions, vacuums, mobile phones, computers, and more. Operating through subsidiary Haier Electronics, it makes and sells washing machines, water heaters, and offers customers logistics services. Haier Group has expanded its reach by exporting to North America, Europe, the Middle East, Asia, and Africa. The group has also pursued markets beyond appliances through acquisitions and joint ventures.
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INTERNSHIP REPORT 2. Profile of The Organization Haier India:
Haier Appliances (India) Private Limited is a wholly-owned subsidiary of Haier Group. Haier India was launched in India in December 2003 and by August 2004 had an all-India promotion launched with over 55 products across six product categories --refrigerators, color television/DVDs, washing machines, microwave ovens and dishwashers. Haier India has also launched its brand of mobile phones in India. The India launch was started with innovative products which were designed keeping the day to day customer needs in mind -- products that will transform the customer's everyday living into inspired living. Products that will make your today better than yesterday. Haier India launched BMR technology for the first time in India. Even the Double Drive is a newly patented technology. The India operations already have an established dealer network of approximately 1600 dealers all over the country, which is backed by a strong service and after sales service network.
RANJANGAON PLANT ? Situated 54 Kms. from Pune & 200 Kms. From Mumbai. ? MIDC Industrial area. ? Address- B-3, Growth Centre. ? Neighbors: - Fiat, Whirlpool, LG. ? Plant area: - 40 Acres. ? Technology:? Direct Cooling ? BMR technology
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Haier launches first refrigerator & R&D facility in India In India ? Pune, August 09,2006 Haier, the largest manufacturer of refrigerators worldwide; its first manufacturing facility in India as part of the company's plans to expand operations in the country. The new manufacturing facility is located at Ranjangaon in Pune district of Maharashtra Spread over 40 acres of land, the plant currently has capability to manufacture Refrigerators. Haier is upgrading the new facility with state-of-the-art equipments to create a Research & Development facility for refrigerators. The facility has been acquired as a part of Purchase of Appliances Business of Anchor Daewoo Industries Limited by Haier India. Haier initially plans to manufacture its wide range of refrigerators at this facility in Pune. The facility would enhance the overall capacity of Haier and would enable the company to increase its customer reach and enforce its commitment to providing advanced quality products in India as well as in the global market. The facility is expected to have a headcount of over 500 people (including contract workers) and the company may look at recruiting more people in various capabilities as it commissions to its full capacity. Haier Appliances (India) P. Ltd. ?India is a key market for Hailer‘s global operations and the launch of our manufacturing and R&D unit investment is a reiteration of Hailer‘s long-term commitment to the Indian market. Haier sees India as a strategically important market and we may expand current capacities in the near future and are poised for high speed growth in the coming quarters.? Recognizing the growing role of India as an important market and emerging global business destination, critical to its global growth. The company foresees continued growth and expansion in the coming few years globally driven by its operations in India and hopes to realign India‘s strengths and world-class market capabilities to deliver services to its customers.
In India Haier manufactures refrigerators. The capacity of the plant at Pune is 1200 refrigerators in single shift of 9 hrs. The cycle time in the main line is 26 seconds. The cycle times for various subassemblies are different. So accordingly the stacks are kept to maintain a continuous flow. The plant in normal circumstances works for a single shift, however in peak season work is done in both shifts.
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INSPIRED LIVING Life is very involving and everyday it offers you new challenges. Haier has peeped into life and come up with ideas that make living enjoyable and joyous. The main brand Idea was that Haier products are inspired by Life: this is now expressed as Inspired Living. There is also another perspective on Inspired Living. All Haier products are the result of closely studied actual usage patterns of home appliances, i.e., inspired by everyday life. For example, Haier was the first to launch a Bottom Mounted Refrigerator in the country. It is based on a simple insight that refrigerator shelves are used far more often than the freezer shelf. So Haier has put the freezer at the bottom and refrigerator racks at convenient heights, so that you don‘t have to bend your back frequently. As a late entrant into the category, Haier understands the consumer needs better and reflects that in consumer offerings. This is how we write the positioning statement: Haier is better than all other brands for easy adopters because it offers them benefits that help them lead a better life as a result of our endeavor to understand life better and work technology around it. The India operations already has an established dealer network of approximately 1600 dealers all over the country, which is backed by a strong service and after sales service network. ? Over 4000 Retail outlets selling Haier products ? 21 Plants HAIER (plus some exclusive stores) ? Presence in all major cities ? Brand recall – better than other new brands. ? 26 Branch Offices & 25 warehouses ? 6 Direct Service Centers & 135 Haier customer care centers (covering all India) ? 24x7 Call Centre ? Present status of Haier considering the time span, is appreciated by the Industry
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Branch List 1. Ahmadabad 2. Bangalore 3. Bhubaneswar 4. Chennai 5. Chandigarh 6. Delhi 7. Dehradun 8. Dharamashala 9. Faridabad 10. Ghaziabad 11. Goa 12. Guwahati 13. Hyderabad 14. Indore 15. Jaipur 16. Jammu
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17. Jamshedpur 18. Kolkata 19. Kuttikkattukara 20. Kundli 21. Lucknow 22. Mumbai 23. Zirakpur 24. Patna 25. Pune, Wagholi 26. Solan, Sopan.
Haier Global:
Haier Global
Asia China HongKong Japan
Europe Haier Europe Italy Russia Spain Poland
Oceania Australia
North America America
Middle East Israel
NewZealand
Pakistan Portugal Korea India
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Globalization 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) 2) 3) Enter international mainstream markets; utilize main sales channels to deepen market penetration; 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, AsiaPacific, ASEAN, and South Asia. Utilizing this strategy, Haier now sells products in over 160 countries around the world.
Guided by the business philosophy of CEO Zhang Ruimin, Haier has experienced the development stages, noted as Brand Building, Diversification and Globalization. At the 21st anniversary of the founding of Haier Group on December 26, 2005, Haier announced its 4th strategic development stage of global brand building. In 1993, Haier brand was officially recognized as a famous brand. In 2006, Haier brand was valued at RMB 74.9 billion. Since 2002, Haier has consecutively been ranked first in the row of China‘s most valuable brands for manufacture of 18 products,
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including refrigerators, air conditioners, washing machines, televisions, water heaters, personal computers, mobile phones and kitchen appliances. Haier was ranked first of China‘s Top 10 Global Brands by China State Bureau of Quality and Technical Supervision (CSBTS) for refrigerators and washing machines. On August 30, 2005, Haier was ranked 1st of China‘s Top 10 Global Brands by the Financial Times.
Facing the fierce global market competition, Haier launches the Global Brand Building Strategy and updates spirit ?Create resources, worldwide prestige? and work style ?Individual-goal combination, swift action and success? with an aim to gain global recognition and sustainable development. By April 2006, the Haier Group has obtained 6,189 patented technology certificates and 589 software intellectual property rights.
Global Branding Strategy
Haier‘s global branding strategy aims at positioning the company as a local brand in different world markets in conjunction with enhanced product competitiveness and strong corporate operations. Haier‘s international business framework encompasses a global network of design, procurement, production, distribution and after-sale services. Today, Haier has established 15 industrial complexes, 30 overseas production factories and bases, 8 design centers and over 58,000 sales agents worldwide.
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In China, Haier‘s 4 leading product categories - refrigerators, refrigerating cabinets, air conditioners and washing machines - have over 30% market share Haier is now approaching its goal of being ?local? in American and European markets via localized design, manufacturing and sales processes. In addition, Haier has set up production facilities and plants in the USA, Italy, Pakistan, Jordan and Nigeria.
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INTERNSHIP REPORT 2.1 Origin of the Haier Organization :
The origins of Haier date back long before the actual founding of the company. In the 1920s, a refrigerator factory was built in Qingdao to supply the Chinese market. After the 1949 establishment of the People's Republic of China, Haier was then taken over and turned into a state-owned enterprise.
2.2 Growth of The Organization :
Haier, one of the largest Home Appliances and Consumer Electronics brands, worldwide, announced its plans for 2012 with an aggressive strategy to reinforce its strength and spread across product categories and consolidate its position as the No.1 Refrigeration and Laundry Appliances brand in the world today. The company registered a robust growth of 216% in the second quarter of 2012 ended June 30 over the corresponding period in 2011. The company has announced an overall growth target of 200% in 2012 over 2011. Haier today launched 25 new models nationwide inspired by consumer experiences across product categories as a step forward in achieving its ambitious growth plans. These include the new range of ultra-slim Full HD LED backlit TV‘s with 1.2 inch thickness, the slimmest in the category available in the market and a wide range of LCDs equipped with unique Motion Gaming Technology and recording as well as playing any program feature through the USB. LCD TVs are available from 16 inches to 42 inches. Haier is the only brand to have launched 22 inch LED and will very soon be introducing 24 and 32 inch models. Today Haier has the widest range of Side by side models in Refrigerators. The company also launched new range of Bottom Mounted Refrigerators (BMRs) called the BMR Plus, new models in Empress Series refrigerators, Deep Freezers, 5 star Split ACs, range of front and top load Washing Machines. According to Mr. Eric Braganza, President, Haier Appliances India, ?We at Haier are proud of our strong customer connect, which inspires us to break new barriers in consumer relevant innovation. We are well poised to achieve our growth target of over 200% this year over FY2012. In Q2 of FY 2011 we have already achieved a 216 % growth over the same period FY 2011. As we are now ready to enhance our range of products across product groups we are proud of the fact that Haier has one of the largest ranges of products across most of the categories.? The entire new range of Haier products will be available in retail outlets selling Haier products as well as in the shop in shops across the country. Haier has targeted more than 100 shops in shops across India, giving the customer an international shopping experience as they get an opportunity to see the complete range of Haier products. Haier also plans to strengthen its business through an aggressive sales channel expansion for its Appliance business as well as expanding and consolidating its after-sales service network across the country.
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2.3 Milestones of the organization :
? Haier Ranked the No 1 Global Major Appliances Brand for 3rd Consecutive Year.
? Haier is the number one Major Appliance brand in the world with a 7.8 % retail volume share in 2011 marking the third consecutive year Haier has been given this honor.
? World‘s 4th largest white goods manufacturer and one of china‘s top 100 IT companies.
? Having 240 subsidiary companies and 30 design centers, plants and trade companies and more than 70,000 employees in the world.
? Haier has consecutively been ranked first in the row of china‘s most valuable brands for manufacture of 18 products, including refrigerators, air conditioners, washing machines, televisions, water heaters, personal computers, laptops, mobile phones and kitchen appliances.
? Haier was ranked first china‘s top 10 global brands by china state bureau of quality and technical supervision (CSBTS) for refrigerators and washing machines.
? Haier has currently obtained more than 7000 patented technology certificates (1234 for Haier inventions) and 589 software intellectual property rights. Haier has hosted and taken part in modification of about 100 technology standards.
? Haier announced official sponsor of Beijing 2008 Games.
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? Received a World Climate Award from the United Nations Development program and the US Environment Protection Administration in 2000 as per Euro-monitor International (the global leader in consumer market strategy research) survey 2011. ? Ranked 86th among the world‘s 500 Most Influential Brands by world Brand Lab in 2006. Only Chinese brand to be ranked in top 100 for three consecutive years. ? Ranked 1st among Chinese brands with the most potential by Glebors Global Financial Reports of Canada, 2006.
? Ranked 1st among China‘s Top 10 Global Brands by the Financial Times in 2005. ? Ranked 1st among China‘s Top 10 Global Brands by China State Bureau of Quality and Technical Supervision (CSBTS) for refrigerators and washing machines in 2005. ? CEO Zhang Ruimin ranked 26th among World‘s Most Respected Business Leaders by the Financial Times in 2005. ? CEO Zhang Ruimin ranked 6th among Asia‘s 25 Most Powerful People in Business by Fortune magazine in 2004. ? Received a World Climate Award from the United Nations Development Program and the US Environment Protection Administration in 2000. ? As per Euro-monitor International (the global leader in consumer market strategy research) survey 2011
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INTERNSHIP REPORT Awards & Achievement:
CERTIFICATION & ACHIEVEMENT 26/10/2011
Haier Tops "Most Potential Chinese Brands"
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Shared Certification:
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INTERNSHIP REPORT The American Academy of Hospitalty Sciences Presents 5star diamond to Haier:
Certificate of Recognition:
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2.4 Vision:
Inspired Living… To be most preferred and trusted Home Appliances Company in India providing more perceived value to the customer. 2.5 Mission :
We at Haier, Never say No to the Market. Inspire continuously to enhance employee capability. Promoting business practices that respect the Earth, Environment, Health and Safety.
2.6 Objective of The Organization:
To become the No.1 Home Appliances company in India by 2014.
2.7 Ownership Pattern:
Although under partial public ownership, Haier is still technically a "collective" company, meaning that it is supposed to be owned by its employees. However, its actual ownership situation is opaque; the employees receive no dividends and do not know how much they own in reality. Interference from officials is also a risk for state-owned enterprises like Haier. Various
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levels of government often try to push their ailing companies upon successful ones, often resulting in failure; Haier was once talked into acquiring a pharmaceutical company, even though it had no prior experience or infrastructure in biotechnology.
2.8 Products Profile: Refrigerators:
Haier is the first company to make breakthroughs in integrating fluorine-free, energy-saving technologies with large freezing capacity, and solve technological problems related to sterilization. Haier has also rolled out the world‘s first variable-frequency refrigerator, which is made of heat insulating material designed for aerospace.
Household Air Conditioners:
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At its eight large production bases in China, Haier uses the world‘s most advanced automatic flexible production lines to ensure the delivery of large quantities of highly reliable air conditioners, which are exquisite in quality and free of defects.
Washing Machines:
Haier produces washing machines of 5,000 different specifications under 18 categories, and is the only company in the world with the capability of large scale production of top load washing machines (popular in Asia).
Freezers:
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Haier produces 1.8 million units of freezers each year. Haier is licensed to supply products for military provisions, and is the only company to win the bid for three consecutive years.
Vacuum Cleaner:
Developed with the Haier spirit of continuous innovation, Haier dust collectors consistently lead the trend in the dust collection market.
Water Heaters:
Haier manufactures water heaters of 300 specifications under 12 categories, including electric water heaters, gas water heaters, solar energy heaters, and gas boilers, in the categories of mechanical, electric, and network-based, and with the capacity range of 5-litres to 500-litres.
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Microwave Ovens:
Haier offers microwave ovens in 50 varieties under 8 categories, including mechanical, electronic and digital, and with the capacity range of 17-litres to 40–litres. Haier ovens feature both stainless steel and painted stoves, and come with top doors and side doors.
LCD?s:
Haier offers more than 20 models in LCDs.
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DVD Players:
Haier offers a diverse line of DVD players of exceptional quality. Haier DVD players are favored by consumers for their performance and after sales service. The products have won a number of awards for environmental protection and energy efficiency.
Mobile Phones:
Haier mobile phones include such latest features as GSM/GPRS technology, integrated digital cameras, MMS, MIDI Polyphonic ring tones and color LCD screens. The product line includes bar-type phones, clamshell phones, smart phones and the new and unique slim phones.
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Computers (desktop and laptop):
With a special attention to users‘ health, and eye-protection, Haier makes desktop and laptop computers for personal and commercial use in different ranges, including the world‘s first laptop with 3.2 mega-pixel camera.
Digital Information Products:
Haier offers a number of patented digital information products, including MP3 and MP4. Haier is committed to delivering personalized products, services and application solutions to meet the individual needs of users.
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INTERNSHIP REPORT Haier Pharmacy:
Founded in 1996, Haier Pharmacy is the newest growth area within the group. The product offerings cover 80 specifications under 60 categories including medical raw materials, tablets, capsules, granules, oral liquid, medicine powder for injection, lyophilized powder for injection, eye drops, etc.
Haier services: Travel:
Haier Group‘s Conference & Exhibition Division provides one-stop service for organizing meetings and conferences, from preparation to hosting the event. Haier‘s hotel system is able to provide conference services, accommodation, catering and entertainment.
Insurance
Established in 2001, Qingdao Haier Insurance Agency delivers insurance policies on behalf of insurance companies through Haier‘s comprehensive network and large customer base. The company also makes loss assessments and handles compensation on behalf of insurance companies.
Logistics:
Haier Logistics was established in 1999. By establishing a global network of suppliers, Haier has gained significant advantages in terms of cost and R&D. Haier aims to establish an efficient supply chain and provide customer-oriented value-added services. Haier logistics is growing into a global trade company through continuous supply chain management optimization.
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Haier Software:
Qingdao Haier Qingdao Software Company, established in 1998, is a high-tech enterprise engaged in development of embedded systems, information software, and system integration. Its main business is focused on the development of commercial intelligent systems and embedded systems, software outsourcing, system integration and the development of multimedia systems.
Haier Real Estate:
Qingdao Haier Real Estate Development and Investment Company is a wholly-owned subsidiary of the Haier Group. In developing its real estate business, the company pays high attention to improving the quality of construction and living conditions, while making efforts to preserve cultural heritage and to facilitate a healthy and civilized living environment
Percentage sales of home Appliances in Haier:
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INTERNSHIP REPORT Competitor?s of Haier: 1) Profile of LG:
? LG Electronics continues to pursue its 21stcentury vision of becoming a worldwide leader in digital ensuring customer satisfaction through innovative products and superior service while aiming to rank among the world‘s top three electronics, information, and telecommunications firms by 2010. ? LG Electronics plays an active role in world markets with its assertive global business policy. As a result, LG Electronics controls 114 local subsidiaries worldwide, with roughly 82,000executives and employees. ? LG Electronics India Pvt. Ltd. engages in the manufacture and sale of consumer electronics, home appliances, computer products, and mobile phones in India. Its consumer electronics include LCD TVs, plasma displays, display panels, color televisions, home theatre systems, music systems, DVD recorders/players, and MP3 and MP4 players; and home appliances comprise room air conditioners, commercial air conditioners, refrigerators, refrigerator compressors, washing machines, dishwashers, microwaves, and vacuum cleaners. The company also provides computer products, such as laptops, notebook and desktop personal computers, LCD monitors, CRT monitors, optical storage devices, and projectors; and mob... ? LG Electronics India Pvt. Ltd. engages in the manufacture and sale of consumer electronics, home appliances, computer products, and mobile phones in India. Its consumer electronics include LCD TVs, plasma displays, display panels, color televisions, home theatre systems, music systems, DVD recorders/players, and MP3 and MP4 players; and home appliances comprise room air conditioners, commercial air conditioners, refrigerators, refrigerator compressors, washing machines, dishwashers, microwaves, and vacuum cleaners. The company also provides computer products, such as laptops, notebook and desktop personal computers, LCD monitors, CRT monitors, optical storage devices, and projectors; and mobile phones, including camera phones, music phones, and color screen GSM handsets. It sells its products through dealers. The company was founded in 1997 and is based in Greater Noida, India. LG Electronics India Pvt. Ltd. operates as a subsidiary of LG Electronics Inc.
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INTERNSHIP REPORT 2) Profile of Whirlpool:
The Whirlpool Corporation is an American multinational manufacturer of major home appliances headquartered in Benton Charter Township, Michigan, United States, near Benton Harbor, Michigan. The company is listed in Fortune 500 and has annual revenue of approximately $18.4 billion, more than 70,000 employees, and more than 70 manufacturing and technology research centers around the world. The company markets Whirlpool, Maytag, Kitchen Aid, Jenn-Air, Amana, Gladiator Garage Works, Inglis, Estate, Brastemp, Bauknecht, Consul, and other major brand names to consumers in nearly every country around the world. After acquiring the Maytag Corporation on March 31, 2006, the Whirlpool Corporation surpassed Electrolux to become "the largest home appliance maker in the world." Notably, almost all of Whirlpool's appliance line undergoes some manufacturing within the United States, as opposed to other durable goods manufacturers such as General Electric. Founded in 1911, Whirlpool celebrated its 100th Anniversary in 2011. Whirlpool Corporation, a global manufacturer and marketer of major home appliances, is all set to add sparkle to the mundane chore of washing clothes, with the launch of its new front – loading washing machine – ?Sensation‘. Whirlpool Sensation, a front-loading washing machine offers the best wash performance with 20% lower water consumption & its special Stain wash function can help remove 10stubborn stains - Tea, Coffee, Ketchup, Pickle, Shoe Polish, Red Sand, Blood, Milk, Chocolate and Curry. Priced between Rs.18,990/- to 22,990/- , Whirlpool Sensation washing machine is available in 6.5 kgs capacity with the unique Stain wash and Whitest Whites programmers. The product will be available across all retail outlets selling Whirlpool products.
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INTERNSHIP REPORT 3) Profile of Videocon:
Videocon is an industrial conglomerate headquartered in Gurgaon (NCR Delhi) with interests all over the world, and is an Indian multinational company. The group has 17 manufacturing sites in India and plants in China, Poland, Italy and Mexico. It is also the third largest picture tube manufacturer in the world. The group is a USD 4 billion global conglomerate. Consumer Electronics and Home Appliances: Videocon Industries Limited manufacture, assemble and distribute a comprehensive range of consumer electronics, products and home appliances, including finished goods such as television, Home entertainment systems, refrigerators, Washing machines, Air Conditioners and other small household appliances and components such as glass shell(panels & funnels), compressors, motors etc. Oil and Gas: In the domestic oil & gas business, the Group has interests in exploration, prospecting and an intention to get into gas distribution. Beyond borders, Videocon is displaying considerable entrepreneurial flair by becoming active in bagging exploration and production in countries like Brazil, Mozambique, East Timor, Indonesia and Australia. This gives the Group hegemonic status in those countries along with the possibility of earning extraordinary profits. The International Oil & Gas Business headquartered at the Dubai office of VHHL.
Power Business: The Company is developing the Pipavav power project through a wholly- owned subsidiary of the Company, Pipavav Energy Private Limited. The Project is designed to have a capacity of 1200 MW and comprises two units of 600 MW each. The Company is also developing the Chhattisgarh power project through a wholly- owned subsidiary of the Company, Chhattisgarh Power Ventures Private Limited. The Chhattisgarh power project is designed to have a capacity of 1200 MW and comprises two units of 600 MW each.
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Telecommunication: Videocon Group operates the GSM mobile services through Videocon Telecommunications Limited (VTL). VTL was granted a license by the Government of India to provide unified access services in the following 21 circles in India: Delhi, Mumbai, Tamil Nadu, Chennai, Kolkata, Maharashtra, Gujarat, Andhra Pradesh, Karnataka, Kerala, Haryana, Uttar Pradesh(West), Uttar Pradesh (East), Rajasthan, Madhya Pradesh, West Bengal, Himachal Pradesh, , Bihar, Orissa, Assam, North East, Jammu & Kashmir.
4) Profile of Samsung:
Samsung Electronics Co. Ltd is a South Korean multinational electronics and information technology company headquartered in Suwon, South Korea. It is the flagship subsidiary of the Samsung Group and has assembly plants and sales networks in 61 countries across the world, employing over 200,000 people. It is the world's largest mobile phone maker, world's largest television manufacturer and world's second-largest semiconductor chip maker (after Intel Corporation). In 2009, the company became the world's-largest IT producer, surpassing the previous leader, Hewlett-Packard. Its sales revenue in the areas of display devices (LCD and LED) and memory chips is the world‘s highest. Samsung has dominated the world television market in the latter half of the 21st century's first decade, having sold the most televisions globally from 2006 to 2010 (projections in 2010 indicated that this trend would continue). In the global LCD panel market, the company has maintained the leading sales position for eight years in a row.
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INTERNSHIP REPORT Haier India Structure:
Haier Appliances Head Quarter Delhi
Marketing Team Haier India Pune Plant All Over INDIA
Head Office Address: - Haier Appliances (India) Pvt.Ltd. B-1/A-14, Mohan Co-operative Industrial Estate, Mathura Road, New Delhi-110044 Tel: - 011-26952470/ 71/72/73. Fax: 011-26971562 www.haierindia.com Plant Address: - Haier Appliances (India) Pvt.Ltd. B-3, M.I.D.C., Ranjangaon, Ranjangaon, Tal: - Shirur, Dist: Pune-412 208 Tel: (02138)670251/52/53. www.haierindia.com
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INTERNSHIP REPORT Departmentalization in Pune Plant: General Manager Plant Assistant General Manager Plant Head Production Head Quality Assurance
Head HR / ADMN /EESH Head Finance & Accounts He Head Stores
Head R&D
Head Sourcing Head SCM Head Project
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2.10.1 Responsibilities of Finance Department:
Chief Financial Officer (CFO)
Plant Head
Assistant General Manager (AGM) Finance
Head of Department Of Finance
Employee 1
Employee 2
Employee 3
Employee 4
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? In Haier the finance departments do paying salaries to every employee. ? Creating pay slips to the employee. ? Preparing balance sheet of the organization.
2.10.2 Responsibilities of Human Resource Management Admin And EESH Department:
Plant Head
Head of Department Of Human Resource (HR)
Employee1
Employee 2
Employee 3
Employee 4
Operations 1
Operations 2
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? Checking the vacancies in the organization. ? Selecting the employees into the organization. ? Checking employee satisfaction in the organization.
2.10.3 Responsibilities of Production Department:
Plant Head
Head of Department Of Production
Employee1
Employee 2
Employee 3
Operations 1
Operations 2
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? Making Production plan to the every month. ? Take care of the products.
2.10.4 Responsibilities of Quality Assurance Department:
Plant Head
Head of Department Of Quality Assurance (QA)
Incoming Quality Assurance (IQA)
IQA Chamber
IQA ROHS
IQA DOCK
IQA OQA
Employee1
Employee 2
Employee 3
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? Checking the quality of products. ? Following ISO standards into the organization.
Responsibilities of Store Department:
Plant Head
Head of Department Of
Store
Employee1
Employee 2
Employee 3
Operations 1
Operations 2
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INTERNSHIP REPORT Responsibilities of Research and Development (R&D) Department:
Plant Head
Head of Department Of
R&D
Employee1
Employee 2
Employee 3
Operations 1
Operations 2
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? Introducing new technology of products. ? Developing New Machines.
Responsibilities of Maintenance Department:
Plant Head
Head of Department Of
Maintenance
Employee1
Employee 2
Employee 3
Operations 2 Operations 1
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? To maintain the company products. ? To maintain the all Machinery and Equipment.
2.10.6 Responsibilities of Innovation Department:
Plant Head
Head of Department Of
Innovation
Employee1
Employee 2
Operations 1
Operations 2
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? Innovating new Ideas. ? Implementing new Ideas.
Future Growth of Haier: Continuous Global Growth:
Once again ranked the world‘s number one Major Appliances brand in 2010, Haier‘s strong position and international recognition are due to the company‘s rapid expansion of business in global markets. As of November 2010, international sales increased by 23% year on year, with turnover growing 38% in the Americas, 32% in Europe, 13% in AsiaPacific and 16% in the Middle East. Haier now provides solutions for consumers in over 160 countries and is quickly gaining leading positions in many major markets around the world. Haier‘s future growth lies in large part in markets outside China. In 2011, Haier plans to expand R&D and manufacturing facilities in several countries, including expanding production capacity in Italy to meet the tremendous demand for the 3D line of refrigerators in Europe, and also to significantly increase its production capacity in countries such as Pakistan and India. The brand, which prides itself on quality, innovation, award-winning design and inspired living solutions, constantly strives to anticipate consumer demand and develop original and meaningful appliances for European households, placing ease of use at the centre of each new product development. The ?Smart Life‘ concept is one such example – this range of connected home appliances allows users to communicate with their devices anytime, anywhere via the Internet.
„Smart Life? – inspired living solutions...
At CES 2011 Haier will present the results of its latest R&D efforts, including the new ?Smart Life? concept products - Internet-connected appliances featuring refrigerators, televisions, washing machines and air conditioners. With these products, users would be able to remotely control and obtain information from their appliances either from home or on the go, allowing customers to do more, worry less and save time. The Haier ?Smart Life? system also includes home appliance controls, lighting and curtain controls, multimedia entertainment, security alarms monitoring among other outstanding features together in the world‘s first wireless-controlled network home appliance system. The ?Smart Life? concept solutions demonstrate Haier‘s approach to developing usercentric innovations for a smarter future.
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INTERNSHIP REPORT The next step for Haier?s 3D TVs: new family-oriented 3D technology
A 3D room at the booth will display Haier‘s newly developed family-oriented 3D technology televisions. These advanced TVs offer 2D to 3D experience at the push of a button and a high quality visual experience with Haier‘s own Active Shutter TV and Passive Polarized 3D technologies. Later this year Haier Europe plans to launch an affordable, user-friendly, new 3D technology TV line, designed to be enjoyed by the whole family at home. René Auber tin, CEO of Haier Europe, emphasizes Haier‘s objective of democratizing the 3D experience for European families: “Thanks to the affordable and lightweight glasses that Haier will be selling shortly, 3D viewing will be made accessible to more people, offering more families the perfect home cinema experience and the possibility to watch their screen from a wider variety of angles for all their favorite films and sporting events”. Haier will also be highlighting an impressive line of wireless, Internet-connected LED televisions with wide screens of up to 55?. Haier America will introduce a partnership with Yahoo! Connected TV to provide diverse content for Haier‘s connected TVs.
Haier Audio Launch
Sound lovers are not forgotten with the new Haier Audio product line, including the introduction of a top-of-the-range 3D Sound Bar. With just one single front facing speaker, this product will immerse an entire room in 3D sound without the need for additional speaker systems, bringing any television content to life in 3D audio. The combination of Haier‘s latest 3D televisions with this new audio line launch in Europe in late 2011 means that more consumers will be able to access an affordable yet quality 3D entertainment system for their homes.
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III.The McKinsey 7S Framework Background of Model:
How do you go about analyzing how well your organization is positioned to achieve its intended objective? This is a question that has been asked for many years, and there are many different answers. Some approaches look at internal factors, others look at external ones, some combine these perspectives, and others look for congruence between various aspects of the organization being studied. Ultimately, the issue comes down to which factors to study. The 7S model can be used in a wide variety of situations where an alignment perspective is useful, for example to help you:
? Improve the performance of a company;
? Examine the likely effects of future changes within a company;
? Align departments and processes during a merger or acquisition; or
? Determine how best to implement a proposed strategy.
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Hard “S”
Soft “S”
?
Strategy: the plan devised to maintain and build competitive advantage over the competition. Structure: the way the organization is structured and who reports to whom.
?
?
Systems: the daily activities and procedures that staff members engage in to get the job done. Shared Values: called "super ordinate goals" when the model was first developed, these are the core values of the company that are evidenced in the corporate culture and the general work ethic. Style: the style of leadership adopted. Staff: the employees and their general capabilities.
?
? ?
?
Skills: the actual skills and competencies of the employees working for the company.
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How to Use the Model:
Now you know what the model covers, how can you use it? The model is based on the theory that, for an organization to perform well, these seven elements need to be aligned and mutually reinforcing. So, the model can be used to help identify what needs to be realigned to improve performance, or to maintain alignment (and performance) during other types of change. Whatever the type of change – restructuring, new processes, organizational merger, new systems, change of leadership, and so on – the model can be used to understand how the organizational elements are interrelated, and so ensure that the wider impact of changes made in one area is taken into consideration. You can use the 7S model to help analyze the current situation (Point A), a proposed future situation (Point B) and to identify gaps and inconsistencies between them. It's then a question of adjusting and tuning the elements of the 7S model to ensure that your organization works effectively and well once you reach the desired endpoint. Sounds simple? Well, of course not: Changing your organization probably will not be simple at all! Whole books and methodologies are dedicated to analyzing organizational strategy, improving performance and managing change. The 7S model is a good framework to help you ask the right questions – but it won't give you all the answers. For that you'll need to bring together the right knowledge, skills and experience. When it comes to asking the right questions, we've developed a Mind Tools checklist and a matrix to keep track of how the seven elements align with each other. Supplement these with your own questions, based on your organization's specific circumstances and accumulated wisdom.
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Strategy of Haier:
The phase of Brand building strategy (1984-1991): Always aiming at the top position:
Summary: In the 1980s, the beginning of reform and opening-up, many enterprises, including Haier, introduced advanced foreign technology and equipment in refrigerators. At that time, demand exceeded supply in the home appliance market, and many enterprises sought economies of scale, focusing on output while neglecting quality. Haier did not seek high output blindly. Instead, it was very strict with the quality of its products, and implemented comprehensive quality management. It valued the concept of ?Always aiming at the top position?. When supply exceeded demand in the home appliance market, Haier won competitive advantage through superior quality. In this faze, Haier devoted itself to the manufacturing of refrigerators and developed a set of implantable models in management, technique, talent, capital and corporate culture.
The phase of Diversification strategy (1991-1998): culture activated “shocked fish”:
Summary: In the 1990s, the state encourages mergers and acquisitions. After merging and restructuring, some enterprises could not develop, or considered specialization rather than diversification. The creation of Haier was the merging of eighteen domestic enterprises with the thought of ?Haier culture activated shocked fish?, and Haier entered into an era of vast development space in diversified business and expansion. At that time, there was fierce competition in the home appliance market and quality had become a basic requirement for
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consumers. Haier took the lead to provide the star service system. While home appliance manufacturers focused on price wars, Haier won competitive advantage through superior quality. In this phase, Haier began to implement the OEC (Overall Every Control and Clear) management approach, i.e., everyone shall conduct overall control of and clear everything that needs to be done every day, with the aim to ?accomplish what‘s planned each day; evaluate and improve what‘s accomplished each day?. This management approach also became the cornerstone of Haier‘s innovation.
The phase of Internationalization strategy (1998-2005): Go abroad and export to create a famous brand:
Summary: In the late 1990s, with China‘s entry into WTO, many enterprises went abroad at the call of the state. But they found it was difficult to develop overseas, so they returned while continuing with licensing agreements. Haier thought that going abroad did not just mean earning foreign exchange. Instead, enterprises should create China‘s own brands. Therefore, Haier proposed the ?three steps strategy? of ?Get in, Move into mainstream, Leadership?. Haier put forward the thought of ?difficult first, easy later? and created a famous brand in developed countries. After the brand was established, Haier entered the markets of developing countries, and created the localization mode of ?three in one?, i.e., combining design, manufacturing and sales into one. In this phase, Haier implemented ?Market Chain? management. Such a management system was based on computer information systems and centered on order information flow to improve the logistics and capital flow and to rebuild the business process. This innovation management system facilitated information flow within the enterprise, and encouraged employees to align their value orientation with the needs of users.
The phase of Global brand strategy: Consolidating global resources and creating a global brand:
Summary: The Internet era brings segmentation of the market, and the mode of traditional enterprises featuring ?production-storing-selling? can no longer satisfy the tailored needs of users. The enterprises must shift from the enterprise-centric sale of products to the user-centric sale of services. That is, they should shift to the ?demand manufacturing and delivery? mode. The Internet also brings integration of the global economy, and the relationship between internationalization and globalization is one of logical improvement. Internationalization means creating international brands with the own resources of the enterprises, while globalization means making use of global resources to create localized mainstream brands. They are quite different. Therefore, Haier consolidates the global resources in R&D, manufacturing, and marketing to create a global brand. In this phase, the business mode created by Haier to develop consumers in the Internet era is a ?Win-win Mode of Individual-Goal Combination?.
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INTERNSHIP REPORT Shared values of Haier:
?Shared values? refers to the underlying attitude of the company; a combination of core Values and core purpose. Core values are the essential guiding principles and doctrines that do not require external justification and that the company would keep even if business circumstances changed Shared values also includes a core purpose, a firm‘s stated business goals, how it will achieve them, and the values it will uphold in doing so; a mission statement.
Shared Values and Haier The Haier shared values variable has the following components. 1- Leverage the Haier experience: Throughout all marketing communications (everything from press releases, websites, to annual reports), Haier consistently refers to the Haier Experience. However, the Haier experience itself is never defined. The website states that an objective is to deliver an ?inspiring, inviting, and reliable? product but that hardly defines an experience. The Haier experience appears to be more than simply selling Refrigerators, it is the conscious decision to position the brand as a lifestyle entity, capturing an attitude, and therefore is a reinvention of Refrigerators itself. Any retailer can sell Refrigerators; Haier sells an experience. This experience includes Refrigerators, friendly staff, interesting music, and a comfortable meeting place.
2- The Haier Mission Statement: As posted at Haier.com, the mission statement for the firm is: ?Establish Haier as the premier purveyor of the finest Refrigerators in the world while maintaining our uncompromising principles while we grow. The following six guiding principles will help us measure the appropriateness of our decisions: ? Provide a great work environment and treat each other with respect and dignity. ? Embrace diversity as an essential component in the way we do business. ? Apply the highest standards of Manufacturing Refrigerators. ? Develop enthusiastically satisfied customers all the time.
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? Contribute positively to our communities and our environment. ? Recognize that profitability is essential to our future success?.
3- Environmental mission statement: Haier also circulates an environmental mission statement: ?Haier is committed to a role of environmental leadership in all facets of our business. We fulfill this mission by a commitment to: ? Understanding of environmental issues and sharing information with our partners. ? Developing innovative and flexible solutions to bring about change. ? Striving to buy, sell, and use environmentally friendly products. ? Recognizing that fiscal responsibility is essential to our environmental future. ? Instilling environmental responsibility as a corporate value.
?
Measuring and monitoring progress on each project
Structure of Haier:
A company‘s structure refers to the way it is organized. Structure and Haier Haier has a functional structure (human resources, marketing, corporate social Responsibility, public affairs). The corporate environment at Haier is very loosely structured, emphasizing the company‘s constant need for new ideas and employee input Haier refers to its employees as partners, and extends to all of them (even part time help working at least twenty hours a week), benefits such as health coverage and stock options. Haier believes creating the value of brand equity occurs through investing in its employees who are the face of the brand rather than in traditional tools like advertising; before a company can expect trust from its customers, it must have the trust of its employees.
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INTERNSHIP REPORT Systems of Haier:
Although the term ?systems? is often thought of as synonymous with information systems, in this framework, systems refer to the procedures and processes and competitive advantages present within the organization.
Skills of Haier:
In this framework, ?skills? refers to the distinct capabilities or dominating attributes that distinguish a firm from its competitors. Skills and Haier Haier has several importance skill advantages: Friendly, knowledgeable staff: Although many firms claim to have a competitive advantage with their staff, high quality knowledgeable employees are especially important for customer focused operations like retail. Ability to reinforce the Haier Experience through non-retail operations: The ability of employees to consistently identify other non-retail methods of maintaining and extending the Haier experience is a major skill of the corporation.
Staff of Haier:
Within the framework of the 7S model, ?staff? refers to the quality of people. Traditionally, staff is often treated in one of two ways. On one hand, there are appraisal systems, pay scales, or formal training. On the other hand, there is employee morale, attitude, motivation, and behavior.
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Staff and Haier Haier has several advantages relating to staff: Customer service: As discussed in the skills section above, it is important for a retail operation to have high quality employees, since the employee is the direct link to the customer, and subsequently embodies the brand. Lower employee turnover: Haier, through generous benefits packages and unique, flexible working environments, is probably faced with lower employee turnover rates than its competitors. The retention of qualified, trained employees is important. Flexible work environment: The apparently flexible work environment for Haier encourages its employees to be innovative, creative, and to take chances. Strong vision: The vision for Haier is reinforced throughout the organization. Unlike some firms that have a mission statement framed on a wall at head office, the mission, goals and vision for Haier seem to be reinforced at all levels of the organization. This reinforcement leads to support and buy in from employees, who are more likely to hold these or similar values as being important. Style of Haier:
Within this framework, style refers to patterns of actions among organizational participants, especially managers, about how people choose to spend their time. This is more than simply the personality of a top-management team or the way that team is perceived within the organization. This phenomenon is best illustrated through mergers; in most mergers, no matter how closely related the businesses, the task of integrating two firms is a problem no less difficult than combining two cultures Style and Haier Based on personal observation, the style for the organization can be defined as innovative, flexible, collegial and team-orientated.
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Summary of 7?s Mckinsey Model: Shared Values Shared Values Strategy Consistent Structure No Changes Required Systems Consistent Consistent Consistent Style Consistent Consistent Consistent Consistent Staff Lack of Consistent Consistent Consistent Consistent Awareness Skills Consistent Consistent Consistent Consistent Consistent Consistent Consistent Consistent Consistent Consistent Consistent Consistent Consistent Consistent Consistent No Changes Required Consistent Consistent Consistent Strategy Structure Systems Style Staff Skills
Consistent Consistent Consistent Consistent Consistent Consistent
No Consistent Changes Required
No Changes Required
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INTERNSHIP REPORT SWOT Analysis of Haier: Strengths:
? Leading manufacturer of appliances ? Global availability ? Setting the Standard ? Chinese No.1 Brand. ? Old Company. ? Global no.1 Brand. ? High end products are well accepted. ? Good market share in western India. ? Strong presence in home appliances segment. ? Big distributors are stocking many of Haier‘s products. ? Large number of sales outlet 30 franchised stores & 5500 sales points.
? Unique corporate culture, qualified employees, core technology, excellent after-sale service system.
? All Products are Available in this Brand.
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INTERNSHIP REPORT Weakness:
?
Very weak distribution network in central India. Marketing. Weak service agent network Weak logistics as a result accumulation of trade stocks and aging stocks. Sales seasonality in specific segment hindering growth.
?
?
?
?
? Difficult to adapt to the international market - little efficient breakthrough among international competitors.
? Relatively low input, low output & low efficiency.
? More attention on traditional electrical products.
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INTERNSHIP REPORT Opportunities:
? Economic globalization - ?go out? ? Core technology ? China‘s access to WTO - easier to enter global market ? Domestic and foreign business partners ? North-east a potential market is still largely untapped. ? Mobiles and cellular phone market offers new growth opportunities. ? SPIN(Situation, Problem, Implication, Need) selling strategy for HEC‘s ? Consumer electronics segment is booming and set to grow at 14% CAGR, Haier‘s produt offerings catering to this segment are limited. ? Small appliance market set to grow. ? Tie up with big retailers will help in growth ? High disposable income and higher number of Nuclear Families in the society.
? Expansion. ? Technology advancement.
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INTERNSHIP REPORT Threats:
? Medical Freezers are not selling. ? Product portfolio is weak. ? Overall weak distribution network compared to competitors. ? Only selected products are selling from the entire Product Portfolio.
? Deficient funds – lack of power & less competitive.
? Global Expansion ? Traditional mode of thinking. ? Stronger competitors.
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INTERNSHIP REPORT Annual Report:
HAIER APPLIANCES (INDIA) PRIVATE LIMITED
Balance Sheet as at June 30, 2012 (0) Schedules June 30, 2012 Pune
SOURCES OF FUNDS Shareholders' Funds (a) Share capital (b) Share application money pending allotment Loan Funds (a) Secured Loans (b) Accounts Payable - Trade Haier TOTAL APPLICATION OF FUNDS Fixed Assets (a) Gross block (b) Less : Accumulated depreciation (c) Net block (d) Capital Work in Progress
1
786,499,479 786,499,479
2
229,706,482 103,693,478 333,399,960 1,119,899,439
4 784,389,117 259,860,575 524,528,542 161,983,194 686,511,736 690,060
Intangible Assets Current Assets, Loans and Advances (a) Inventories (b) Sundry debtors (c) Cash and bank balances (d) Loans and advances (A) Less: Current Liabilities and Provisions (a) Current liabilities (b) Provisions (c) Account Receivable - Haier (Adv Received from Haier Middle East) Net Current Assets Profit & Loss Account TOTAL (B) (A-B) 9 10
5 6 7 8
202,265,190 30,500,899 44,580,310 467,161,139 744,507,538 423,923,803 4,951,056 190,204,187 619,079,047 125,428,491 307,269,151 1,119,899,439
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INTERNSHIP REPORT Profit and Loss Statement:
HAIER APPLIANCES (INDIA) PRIVATE LIMITED
Profit and Loss Account for the year ended June 30, 2012
Schedules
June 30, 2012 Pune
INCOME Turnover (Gross) Less: Excise duty Turnover (Net) Other income Total
12
13
212,205,442 212,205,442 26,030,918 238,236,360
EXPENDITURE Purchase of trading goods Raw material & components consumed Personnel expenses Operating and other expenses (Increase)/ Decrease in stocks Depreciation / Amortization Financial expenses Total Profit/ (Loss) before extra ordinary item & tax Current Tax Deferred Tax charged /(credit) Fringe Benefit Tax Total Tax Expenses Profit/ (Loss) after tax for the year Prior Period Items Net Profit/ (Loss) for the year Balance Brought Forward from Previous Year Balance Carried To Balance Sheet
15 15 16 4 17
17,142,640 32,252,603 86,881,123 45,321,090 (5,636,940) 35,140,105 6,326,489 217,427,110 20,809,250 20,809,250 20,809,250 (328,078,401) (307,269,151)
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INTERNSHIP REPORT Chapter – VI Summary Findings: Liquidity Ratios: Current Ratio = Total Current Assets/Total Current Liabilities
= $744507538/$423923803 = 1.756
COMPARATIVE ANALYSIS Balance sheet
Mar’10 Mar’09 Increase/ decrease Increase/ decrease percentage Source of funds Share holders fund 1035141350 45260000 1035141349 0 989881350 0
Share capital Share application money Performance share capital Reserves and surplus Total Fund :
95.63 0.00
1035141350 1035141350 Loan funds 479777506 30000000
0
0
Secured loans Unsecured loans Total
449777506
1499.26
1514918856 1065141350
449777506
42.23
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Gross block(asset) Less: Revaluation reserve(revalued assets) Less: Accumulated depreciation(depreciation till current year ) Net block Capital work in progress(including capital advance of previous yr) Investment(not given) Total Intangible assets Current assets , loans, Advances (a)Inventories (b)Sundry Debtors 493886905 (c) cash & bank balance 239590383 (d) loans & Advances 433136516 (A) 1956077510 1188204360 Less :Current liabilities & provision (a)Current liabilities 1766623880 1602391021 (b)Provisions 92370025 (B) 1858993905 1676839536 182154369 74448515 17921510 10.86 164232859 24.07 10.25 767873150 334401558 98734958 64.62 52002131 187588252 29.53 389534424 104352481 360.73 597496783 7827482 430472160 4946790 167024623 2880692 38.80 58.23 -241403352 -273464589 32061237 -11.72 Uses of funds Fixed assets 659932748 703591547 -43658799 -6.21
418529396 178967387
430126958 345202
-11597562 178622185
-2.696 51744.25
91.49 789463706 412266247 377197459 26.79
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Net Current Assets -119.87 (A-B) 97083605 -488635176 585718781
-27.35 Profit & loss Account Total 812510986 1118357666 1514918856 1065141440 -305846680 42.23 449777416
Mar’11
Mar’10
Increase/ decrease
Increase/ decrease percentage
Source of funds Share holders fund 1035141350 1035141350 0 0
Share capital Share application money Performance share capital Reserves and surplus Total Fund :
0
0
1035141350 1035141350
0
0
Secured loans Unsecured loans Total
Loan funds 746114923 479777506 266337417
55.51
1781256273 1514918856 266337417 Uses of funds Fixed assets 840445454 659932748 180512706
17.58
Gross block(asset) Less: Revaluation reserve(revalued assets) Less:
27.35
-301373595
-241403352
-59970243
24.84 68
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Accumulated depreciation(depreciation till current year ) Net block Capital work in progress(including capital advance of previous yr) Investment(not given) Total Intangible assets Current assets , loans, Advances (a)Inventories (b)Sundry Debtors 408993345 (c) cash & bank balance 179360404 (d) loans & Advances (A) Less :Current liabilities & provision (a)Current liabilities 1860059287 1766623880 (b)Provisions 123176088 (B) 1983235375 1858993905 124241470 Net Current Assets 97083605 276110454 -284.40 92370025 30806063 6.68 93435407 33.35 5.29 -44239170 1804208526 1956077510 151868984 388897346 433136516 239590383 -60229979 -10.21 -7.76 493886905 -84893560 -25.14 557263227 5037297 597496783 7827482 -40233556 -2790185 -6.73 -35.65 539071859 18191368 418529396 120542463 178967387 160776019 28.80 -89.84
4.75 826957431 789463706 37493725 -17.19
(A-B)
-179026849
72.06 Profit & loss Account 1397982598 812510986 585471612
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17.58 Total 1781256273 1514918856 266337417
Income statement:
? The comparative income statement given above shows that there has been An increase in turnover 13.77% in 2010-11 ? Expenses in 2009-10 is 53.60% And in 2010-11 is 31.01%
Mar’10
Mar’09
Increase or decrease in amounts
Increase or decrease in percentage (%) 78.72 87.70 78.43 37.99 74.94 129.00 29.16 27.93 46.04 1042.00 -39.61 -47.88 53.60
INCOME
Turnover(gross) Less: Excise duty Turnover(Net) Other income TOTAL: EXPENDITURE Purchase on trading goods Raw material consumed Personnel expenses Operating & other expenses (Increase)/decrease in inventory Depreciation/Amortization Financial expenses TOTAL: 5176394459 2896340383 2280054076 169808198 90469043 79339155 5006586261 2805871340 2200714921 366409874 265526998 100882876 5372996135 3071398338 2301597797 2510094542 1096111285 1413983257 1588619684 1229964925 359002072 751581349 280621999 514624941 358654759 78380073 236956408 -232253218 -254542493 60094105 -22289275 99502301 -39408196
52300196 100347327 -48047131 5067149455 3298883503 1768265952
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Profit/(loss) before tax & extraordinary items 305846680 Provision for tax Fring benefit tax Total tax expenses Net profit/(loss) after tax 305846680 Balance brought forward from previous year Balance carried to balance sheet 1118357666 -228524698 -228524698 -889832968 -812510986 1118357666 25.68 0 -227485165 -1039533 1039533 534371378 -233.84 1039533 -1039533 533331845 -234.45
305846680
-27.35
Mar ‘11
Mar’10
Increase or decrease in amounts
Increase or decrease in percentage (%) 13.77 18.88 13.60 9.37 13.31 22.82 22.23 13.48 60.86 -43.36
INCOME
Turnover(gross) Less: Excise duty Turnover(Net) Other income TOTAL: EXPENDITURE Purchase on trading goods Raw material consumed Personnel expenses Operating & other expenses (Increase)/decrease in inventory 5889311760 5176394459 201871088 169808198 5687440672 5006586261 402515088 368034545 6089955760 5374620806 3082839749 2510094542 1943831214 1590244355 407381358 1208961436 359002072 751581349 712917301 32062890 680854411 34480543 715334954 572745207 353586859 48379286 457380087 110369130 -144173363 -254542493 71
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Depreciation/Amortization Financial expenses TOTAL: Profit/(loss) before tax & extraordinary items 77514969 60094105 17420864 28.99 22.54 31.01 -289.80 64089146 52300196 11788950 1571670383 6640444509 5068774126 -886335429
Provision for tax Findin benefit tax Total tax expenses Net profit/(loss) after tax
-580488749 0 0
305846680 0 0
-886335429 -580488749 305846680 305846680 -812510986 1118357666 1392999735 -812510986
-289.80 -27.35
Balance brought forward from previous year Balance carried to balance sheet
-580488749
71.44
COMMON SIZE ANALYSIS
Balance sheet:
Mar'11 Fixed assets 840445454 Mar'10 46.58 659932748 33.74 Mar,09 703591547 59.21
Gross block(asset) Less: Revaluation reserve(revalued assets) Less: Accumulated depreciation(depreciation till current year ) Net block Capital work in progress(including capital advance of previous yr) Investment(not given) Total Intangible assets Current assets , loans, Advances
-301373595
-16.70
-241403352
-12.34
-273464589
-23.01
539071859 18191368
29.88 1.01
418529396 178967387
21.40 9.15
430126958 345202
36.20 0.03
557263227 5037297
30.89 0.279
597496783 7827482
30.55 0.400
430472160 4946790
36.23 0.416
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(a)Inventories (b)Sundry Debtors (c) cash & bank balance (d) loans & Advances (A) Less :Current liabilities & provision (a)Current liabilities (b)Provisions TOTAL LIABILITIES (B) 826957431 408993345 179360404 388897346 1804208526 21.56 45.83 22.67 9.94 789463706 493886905 239590383 433136516 100.00 1956077510 22.14 40.36 25.25 12.25 412266247 389534424 52002131 334401558 100.00 1188204360 28.14 100.00 34.70 32.78 4.38
1860059287 123176088 1983235375
93.79 1766623880 6.21 92370025
95.03 1602391021 4.97 74448515
95.56 4.44 100.00
100.00 1858993905
100.00 1676839536
Income statement:
Mar ‘11 Mar’10 5176394459 169808198 5006586261 368034545 5374620806 54.20 34.18 7.16 21.26 -2.53 -144173363 77514969 1.36 -254542493 60094105 52300196 5068774126 2510094542 1590244355 359002072 751581349 50.14 31.76 7.17 15.01 -5.08 1.20 1.04 101.24 -22289275 99502301 100347327 3298883503 Mar’09 2896340383 90469043 280581340 265526998 546108338 1096111285 1229964925 280621999 514624941 390.66 438.36 100.01 183.41 -7.94 35.46 35.76 1175.7 73
INCOME
Turnover(gross) Less: Excise duty Turnover(Net) Other income TOTAL: EXPENDITURE Purchase on trading goods Raw material consumed Personnel expenses Operating & other expenses (Increase)/decrease in inventory Depreciation/Amortizatio n Financial expenses TOTAL: 5889311760 201871088 5687440672 402515088 6089955760 3082839749 1943831214 407381358 1208961436
64089146 1.13 6640444509 116.76
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3 Profit/(loss) before tax & extraordinary items Provision for tax Finding benefit tax Total tax expenses Net profit/(loss) after tax Balance brought forward from previous year Balance carried to balance sheet -580488749 0 0 -580488749 -812510986 1392999735 305846680 0 0 305846680 1118357666 -812510986 -227485165 -1039533 1039533 -228524698 -889832968 -1118357666
RATIO ANALYSIS
CURRENT RATIO: Current ratio is the relationship between current assets and current liabilities. It is expressed as Current ratio = {current assets / current liabilities} Current liabilities(Rs) 1602391021 1766623880 1860059287
Year 2009 2010 2011
Current assets (Rs)
853802802 1522940994 1415311180
Ratio 0.5 0.9 0.8
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Current Ratio
1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 2009 2010 2011 ratio
INTERPRETATION:-
During 2009, 2010, 2011the current ratio of the company was 0.5, 0.9 and 0.8. In 2011 current assets are 0.8 times current liabilities. This is favorable. Ideal current ratio is 2:1.
QUICK RATIO:
Quick ratio is the relationship between quick assets and current assets and current assets means current assets-stock-prepaid expenses. Quick ratio is also means Liquid ratio or Acid test ratio. This ratio may be expressed as follows.
Quick ratio = Quick assets Current liabilities Year 1 Jan.-31 Dec.2009 1 Jan.- 31 Dec.2010 1 Jan.- 31 Dec.2011 Quick assets(RS)
441536555 733477288 588353749
Current liabilities(RS) 1602391021 1766623880 1860059287
Ratio 0.3 0.4 0.3
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Quick ratio
0.45 0.4 0.35 0.3 0.25 0.2 0.15 0.1 0.05 0 2009 2010 2011 ratio
INTERPRETATION
uring 2009, 2010 and 2011 the quick ratio of the company was 0.3, 0.4 and 0.3 times. These are less than the standard ratio of 1:1 INVENTORY TURNOVER RATIO: Inventory Turnover Ratio = Cost Of Goods Sold / Average Inventory.Year 1Jan-31Dec2010 1Jan-31Dec2011
Cost Of Goods Sold 4700739581 5914925837
Average Inventory 600864976.5 808210568.5
Ratio 7.8 7.3
Reciprocal Days 46 49
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Inventory turnover ratio
7.9 7.8 7.7 7.6 7.5 7.4 7.3 7.2 7.1 7 2010 2011
Inventory turnover ratio
INTERPRETATION
uring 2010 and 2011 the company was turning its inventory of finished goods into sales 7.8 and 7.3 times in a year. It has shown a decreasing trend during the period of study. The reciprocal of inventory turnover which gives the average inventory holdings in a year shows that company was holding inventory for 46 and 49 days in a year. During the year 2011 company increased the holding period.FIXED ASSETS TURNOVER RATIO:Fixed Assets Turnover Ratio = Sales / Net Fixed Assets.
Year 1Jan-31Dec2009 1Jan-31Dec2010 1Jan-31Dec2011
Sales
2805871340 5006586261 5687440672
Net Fixed Assets
430472160 597496783 557263227
Ratio 6.52 8.38 10.21
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Fixed assets turnover ratio
12 10 8 6 4 2 0 2009 2010 2011
ratio
INTERPRETATION
uring 2009, 2010 the FAT Ratio was 6.52, 8.38 and 2011 was 8.21. It indicate the organization achieve maximum sale with the minimum investment in fixed assets 2011.TOLAL ASSETS TURNOVER RATIO:Total Assets Turnover Ratio = Sales / Total Assets. Year 1Jan-31Dec2009 1Jan-31Dec2010 1Jan-31Dec2011 Sales
2805871340 5006586261 5687440672
Total Assets 1289221662 2128265259 1977611704
Ratio 2.18 2.35 2.88
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Total assets turnover ratio
3.5 3 2.5 2 1.5 1 0.5 0 2009 2010 2011 ratio
INTERPRETATION
uring 2009 the Net Assets Turnover Ratio of the company was 2.18 times, it implies the company is producing Rs 2.18 of sales for 1 rupee of capital employed in Net Assets. During 2010 the Net Assets Turnover Ratio of the Company was 2.35 times. And that for 2011 is 2.88.CURRENT ASSETS TURN OVER RATIO:
Current Assets Turnover Ratio = {Sales / Net Current Assets}
Year 1Jan-31Dec2009 1Jan-31Dec2010 1Jan-31Dec2011
Sales
2805871340 5006586261 5687440672
Net current Assets -488635176 97083605 -179026849
Ratio -5.74226 51.56984 -31.7686
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Current assets turnover ratio
60 50 40 30 20 10 0 -10 -20 -30 -40 2009 2010 2011 ratio
Interpretation: During 2009, the Current Assets Turnover ratio was -5.74, and 2010 was 51.56 times. It indicate the organization achieve maximum sale with the minimum investment in current assets.
NET WORKING CAPITAL RATIO:Net working capital = Net Working capital / Net Assets.
Year 1Jan-31Dec2009 1Jan-31Dec2010 1Jan-31Dec2011
Net Working Capital -748588219 -243682886 -444748107
Net Assets -53216226 702407870 383273675
Ratio 14.06 -0.35 -1.16
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Net working capital Ratio
16 14 12 10 8 ratio 6 4 2 0 -2 2009 2010 2011
INTERPRETATION: During2009, The Net Working Capital Ratio of the Company was 14.06 and -0.35 for 2010. For 2011 For it is -1.16. All the years of Analysis, for one rupee of Net assets with the company, it Has less than one rupee of Net Working Capital. Except for 2009.
DEBT EQUITY RATIO
Debt equity ratio= Total debt / Net worth. Total debt= long term debt + current assets
Year 1Jan-31Dec2009 1Jan-31Dec2010 1Jan-31Dec2011
Total Debt
1243337226 2016827899 1824304525
Net worth
1035141350 1035141350 1035141350
Ratio 1.20 1.95 1.76
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Debt equity Ratio
2.5 2 1.5 1 0.5 0 2009 2010 2011 Ratio
INTERPRETATION: This ratio indicates financial strength of company. Lower the ratio shows greater security available to the creditors. It shows debt to equity capital ratio. In 2009 it was 1.2. In 2010 it is 1.95 i.e. it increased and again in 2011 it decreases to 1.76.
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INTERNSHIP REPORT LEARNING EXPERIENCE
The experience in Haier enriched the knowledge. To start with, Haier is an industry where human resources and technology come together to manufacture products that gain worldwide recognition strategically situated at Ranjangaon (Pune). My overall experience in the company was very good with the support of the company employees and the response got from the management of Haier was appreciable. I would like to mention the nature of Mr.Sanjay Kubal, who guided me in this project without which my project would not have been successful. The atmosphere & working condition were encouraging in the company. During the first week, it was totally a new experience entering in to such a big organization. On the first day of the training had to go a safety training which gave me a chance to understand the companies importance to safety of its employees and workers, factory manager detailed me very clearly about the company & guidelines to be followed with respect to maintaining the discipline of the organization and also informed the safety measures. 17 weeks of project training in the company helped me to know the practicalities. First 4 weeks were about studying the organization as to how it works in management aspects & the policies & procedures. Totally it was a highly useful training in the company. The procedure of production in various parts of the production plant, the safety measures taken by the company where the safety is paramount in the company, core values of the company , the existence of the company in the global and domestic steel market, companies history, etc were studied. Other 13 weeks was all about studying the Accounts and Finance Department, and work on the topic allotted to me by my External Guide. After collecting the entire necessary secondary data External guide started explaining various Departments of accounts and finance. This helped me understand the company’s financial working of the Haier. In between one full week the management had arranged a plant visit for all the management project students which helped us to understand the Industry very clearly study all the various plants in Haier. Understanding of Financial affairs was not possible without the support of my External guide Mr.Sanjay Kubal, (AGM, FINANCE, and Haier). The success of organization is the result of co-ordination between the management and workers in the company.
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INTERNSHIP REPORT Suggestions:
? Working Culture. ? Plant Timings.
? The company not improved current ratio to taking suitable measures, so that it meets the ideal ratio.
? The quick ratio is low. The company may increase the investment on quick assets to meet the ideal ratio. ? Current assets turnover ratio is reduced so steps can be taken for utilization of current assets.
? The company can increase the debt content in its capital structure to give higher
return to its shareholders which shows better debt equity ratio. ? If we see the current liabilities, it is going on increasing year by year. The management should pay out its liabilities as it may affect the liquidity position of the company.
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INTERNSHIP REPORT Appendix: Profit and loss Statement of Haier:
HAIER APPLIANCES (INDIA) PRIVATE LIMITED
Profit and Loss Account for the year ended June 30, 2012
Schedules
June 30, 2012 Pune
INCOME Turnover (Gross) Less: Excise duty Turnover (Net) Other income Total
12
13
212,205,442 212,205,442 26,030,918 238,236,360
EXPENDITURE Purchase of trading goods Raw material & components consumed Personnel expenses Operating and other expenses (Increase)/ Decrease in stocks Depreciation / Amortization Financial expenses Total Profit/ (Loss) before extra ordinary item & tax Current Tax Deferred Tax charged /(credit) Fringe Benefit Tax Total Tax Expenses Profit/ (Loss) after tax for the year Prior Period Items Net Profit/ (Loss) for the year Balance Brought Forward from Previous Year Balance Carried To Balance Sheet
15 15 16 4 17
17,142,640 32,252,603 86,881,123 45,321,090 (5,636,940) 35,140,105 6,326,489 217,427,110 20,809,250 20,809,250 20,809,250 (328,078,401) (307,269,151)
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INTERNSHIP REPORT Balance Sheet of Haier:
HAIER APPLIANCES (INDIA) PRIVATE LIMITED
Balance Sheet as at June 30, 2012 (0) Schedules June 30, 2012 Pune
SOURCES OF FUNDS Shareholders' Funds (a) Share capital (b) Share applicaton money pending allotment Loan Funds (a) Secured Loans (b) Accounts Payable - Trade Haier TOTAL APPLICATION OF FUNDS Fixed Assets (a) Gross block (b) Less : Accumulated depreciation (c) Net block (d) Capital Work in Progress
1
786,499,479 786,499,479
2
229,706,482 103,693,478 333,399,960 1,119,899,439
4 784,389,117 259,860,575 524,528,542 161,983,194 686,511,736 690,060
Intangible Assets Current Assets, Loans and Advances (a) Inventories (b) Sundry debtors (c) Cash and bank balances (d) Loans and advances (A) Less: Current Liabilities and Provisions (a) Current liabilities (b) Provisions (c) Account Receivable - Haier (Adv Received from Haier Middle East) Net Current Assets Profit & Loss Account TOTAL Notes to Accounts 19 (B) (A-B) 9 10
5 6 7 8
202,265,190 30,500,899 44,580,310 467,161,139 744,507,538 423,923,803 4,951,056 190,204,187 619,079,047 125,428,491 307,269,151 1,119,899,439
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INTERNSHIP REPORT Websites:
http://www.haierksa.com/detail.php?id=15
http://www.fundinguniverse.com/company-histories/haier-group-corporation-history/
http://en.wikipedia.org/wiki/Haier
Global no.1 http://www.moneycontrol.com/news/business/haier-refrigeration-appliance-ranked-globalno-1-_373591.html http://www.telegraphindia.com/external/display.jsp?mode=details&id=29634
*http://www.newsweek.com/2010/12/22/10-top-innovative-companies/haier.html
http://www.haier.net/en/about_haier/history/
https://www.google.co.in/
www.haier.co.in
www.studyfinance.com
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INTERNSHIP REPORT Articles: Article1: Raising Haier
People respect the leadership of an organization for different reasons in different periods. When you start a business, your employees are willing to follow you if you set a good example and bear more hardships than they do. In my early days at Haier, when I went on a business trip, I often had to set out right away. If there was no seat available on the train, I would spend two Yuan to rent a small camp stool and sit in the aisle. That was seen and heeded by employees. Later, it‘s conviction that appeals to people. When we started building Haier Industrial Park in the 1990s, people held back, expecting problems to arise. But as it became clear to them that I‘d spare no effort to make it a reality, everyone got on board. Today, I believe, what Haier‘s employees need is to be allowed to make decisions for themselves and not to feel that they are following me in their work. The philosopher Lao-tzu said, ?In the highest antiquity, the people did not know that there were rulers.? I take his meaning to be that a leader whose existence is unknown to his subordinates is really the most brilliant one.
Five Catties of Fish
When I took the job of director of the Qingdao Refrigerator Factory in December 1984, the existence of the company was at stake. Indeed, most people thought its situation was hopeless. The factory‘s net debt stood at RMB1.47 million, and I was the fourth director appointed in that single year. The previous three had either left on their own or been kicked out—no one was able to shoulder the responsibility. More than 800 workers were anxiously awaiting pay that was several months in arrears. Not surprisingly, the employee turnover rate was high. An additional 51 workers applied for a transfer to a different company when my appointment was announced. There was no time for idle talk. The first thing I focused on was the employees‘ salaries. When I think back to the first half year of my tenure that is the challenge I vividly remember, because I had to face it every month. We were not a state-owned enterprise, and given our debt load, the banks were not willing to lend money to us. But luckily, another option materialized. China‘s policy of reform and opening to the outside world meant that wealth was accumulating beyond the cities, in the urban-rural functional areas. I was able to borrow money from the nearby production brigade. Certainly, employees were very happy simply to get their pay, but I wanted to go further. Soon after my arrival, when the Chinese Lunar New Year came around, I borrowed again to buy each worker a New Year‘s gift of five catties of fish. It may seem laughable now, but that gesture had
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an immediate and positive effect. It put hope into employees‘ hearts that our factory had a chance. I then borrowed tens of thousands more Yuan to replace the truck that was many employees‘ transportation to and from work. The truck made for a terrible ride, especially for those who carried children in their arms, so I went to the added expense of buying a bus. Again, it was a small change by today‘s standards, but it had a real impact on morale. How could a factory that was obviously getting better and better be about to fail? Once I had won some goodwill, I started demanding good work. There was very little discipline in the factory up to that point; people tended to do things as they saw fit. Rules and regulations existed in writing but had never been seriously upheld. I spelled out the terms for people: I would guarantee payment of their salaries every month, but only on the condition that they strictly obeyed the working disciplines I established. Then I set forth my new rules, beginning with ?Urinating or defecating in workshops is prohibited? and ?Stealing company property is prohibited.? These were actual habits to be combated. The government at that time did not allow companies to fire workers. Those who violated factory rules could be given demerits or, much more seriously, be deprived of factory membership (that is, no longer part of the company‘s collective ownership) and placed on probation. Once, when we were cleaning a warehouse, some workers were seen carrying away materials. We caught one of them and within an hour posted the consequences on the factory bulletin board: That worker was deprived of factory membership and placed on probation. This punishment came as a huge shock to people.
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INTERNSHIP REPORT Article 2: Haier to buy Panasonic?s Sanyo white goods units Haier to buy Sanyo washing machine, fridge units in Japan, SE Asia and the deal value about $130 million
Tokyo: China‘s Haier will buy Panasonic Corp‘s Sanyo Electric washing machine and refrigerator units in Japan and Southeast Asia for about $130 million, in a move that will give the Chinese appliance giant better access to the world‘s third-largest economy, sources said. Panasonic said on Thursday the two companies have agreed with the transaction, but did not disclose the financial terms. The sale fits in with Panasonic‘s strategy to restructure businesses that overlapped with those of Sanyo Electric, the Japanese electronics maker said. Haier, which outbid at least one rival eyeing Sanyo‘s energy-efficient refrigeration technology with the ¥10 billion deal, has been seeking to expand in Japan‘s tough white goods market, four sources familiar with the matter said. Haier, which partnered with Sanyo in 2002 to gain a toehold in Japan, has taken a share of over 50% in the market for small refrigerators, and has been preparing to compete with Japanese makers head-on in mainstream washers, air conditioners and refrigerators with lower prices, one source said.
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?Japanese makers have an overwhelming market share in Japan only because this is Japan,? said one source involved in a competing bid. ?If Haier can produce a lineup of low-cost and energy-efficient appliances here, it could be a real threat to Japanese manufacturers.? The white goods market in Japan is dominated by domestic heavyweights Toshiba , Mitsubishi Electric and Hitachi as well as Panasonic. More may follow Haier‘s purchase is the latest in a flurry of deals by Chinese firms seeking an entry into Japan. In May, Chinese textile group Shandong Ruji became the biggest shareholder in Japanese apparel maker Renown Inc, while Chinese automaker BYD Co acquired a factory from Japanese metal die maker Ogihara Corp in March. The Haier deal is likely to be followed by similar sales, as Panasonic puts more operations on the block following its acquisition of Sanyo, the sources said. Panasonic could be looking to streamline its semiconductor, battery and TV businesses, Goldman Sachs analyst Takashi Watanabe said. Panasonic will sell Sanyo‘s holdings in about 10 units and affiliates that handle development, manufacturing and sales, the sources said. The units to be sold generate annual revenue of roughly ¥80 billion ($1 billion), one source said. Panasonic and Haier are expected to reach the final agreement by September, Panasonic said. Most of the businesses‘ about 2,000 employees will be transferred to Haier, sources have told Reuters. Panasonic will sell Sanyo‘s washing machine unit Sanyo Aqua and all the shares owned by Sanyo in Konan Denki, a maker of washing machines, to Haier, Panasonic said. The transaction would also include sales of Sanyo‘s shares in refrigerator makers Haier Sanyo Electric and Haier Electric Thailand, to Haier, it said. A Vietnam-based maker and distributor of refrigerators and washing machines, as well as other units in Indonesia, Philippines and Malaysia will also be sold to Haier. Panasonic‘s shares edged up 0.54%at ¥929, compared with a 1.45% fall in the benchmark Nikkei average.
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