Haier Purchase Maytag

Should Qingdao Haier go ahead with the decision to purchase Maytag Corporation?

In my opinion, Qingdao Haier should not go ahead with the Maytag acquisition, but should focus on building the Haier brand in the U.S market by increasing their product distribution through all available channels.

Haier has seen success in the U.S market in just a short period of time and will approach $1 billion in sales in the U.S. market in 2005. The company sales have grown rapidly in many appliance categories including refrigerators, freezers, wine cellars, dishwashers, clothes washers and dryers. The company success has been attributed to product feature innovation, quick product design and delivery in response to retailer needs, competitive prices, product quality and the development of new product categories in the household appliance market that larger U.S manufactures overlooked. Although acquiring Maytag may increase their overall sales, but it will do nothing to help the company capitalize on the brand success that they have achieved so far. It seems that acquiring Maytag may undercut the Haier brand in the U.S market, Best Buy decided to no longer sell Maytag’s large appliance because customers liked the style and innovation products and were responding positively to products made by new foreign suppliers such as LG Electronics, Samsung and Bosch-Siemens. Since Haier America is rapidly building brand equity in the U.S., it should continue to do so with their current strategy

Haier multi product, single-brand strategy is obviously different from Maytag’s multi-brand strategy. Acquiring of Maytag most probably involve the divergence from Haier’s multi-product, single-brand strategy to a multi-brand strategy. This change in strategy will require changes to the operations as well as Haier’s culture and values. The Maytag acquisition also has the potential to impact Haier’s U.S. sales by competing side-by-side with Haier-branded products.

If Haier was not interested in...