The broad differentiation is best fit to what Haier had done for their competitive strategies. The company decided to differentiate itself from other Chinese companies by focus on producing a high-quality product which was a rare thing at the time. They only sell the best. After a soaring profit in its second year, the company still focused on quality and brand building and didn’t drop their production standard. When China’s refrigerator market was over supplied, the company raised its price instead of cutting down as its competitor and the products still sell at a 15% premium.
The company went further to provide an after-sale service - a new breed of its kind for Chinese companies. The word-of-mouth of Haier premium service strengthens its position in the market even further.
Based on the company 2015 review from few resources, it seems this strength has weakened.
Major complains are about a poor product quality. A white good product should last about 10 years but it is only 2-3 years for Haier. Then an after sale service is slow and un-organize. The company also gets a negative feedback on company transparency, social policies and practices. Is this result from a company cutting cost in respond to a global economic climate, and at home?
In my view, the company should first decide if they still want to be on a broad differentiation (quality) or not. If so, then they must start doing the SWOT and VRIO of the company. So, they can gain back their position as a high quality product and after sale service reputation in the market again.