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Haier’s (2019) ecosystem revolution: From Rendanheyi 2.0 to Rendanheyi 3.0
By Michael Jacobides, Lisa Duke
2019 was an important year for Haier. Its new version of its radically decentralised structure, dubbed Rendanheyi 2.0, based on many independent ‘Ecosystem Micro-enterprise Communities’ (EMCs) had been devised to help it respond to the shifting ways of adding value in the digital, internet-based economy. In 2019 BrandZ declared that Haier was the first and only Internet of Things (IoT) ecosystem brand.1 By the close of the year, a handful of EMCs had established themselves based on user demands, including the Internet of Clothing, the Internet of Food, U-vaccine, the Internet of Blood, Smart Home Whole-set Experience EMC, Gas Stove & Water Heater EMC, COSMOPlat RV EMC, Agriculture EMC and XCook. More dynamic EMCs would be created as opportunities were identified. Ecosystem competition was growing from other companies in China, keen to leverage their user bases. And, while the ME and EMC structures were successfully implemented in China, it was harder to do this in Haier’s international operations.
Learning objectives
- Consider the choices facing a company to better identify and serve consumer needs.
- Explore how to use organisation (re)design to revive a firm and how to combat bureaucracy, and evaluate the merits and demerits of different systems, more or less centralised and more or less entrepreneurial (vs supportive).
- Illustrate the challenges of shifting from products to broad ‘webs’ of needs, and in particular the shift from product lines to ecosystems.
- Understand the mechanics and inter-organisational arrangements that can make flexible but complex structures work.
- Consider how to manage an entrepreneurial force within a firm and what the trade-offs are – especially as they relate to ecosystems.
- Be able to identify the challenges of becoming an ecosystem player and the different configurations – to centralise or decentralise.
- Learn how to evaluate whether structures can be ‘translated’ from one area to another and from one region to another – with a focus on a leading Chinese firm.
Details
| Publication Date: | July 2020 |
| LBS Case Code: | CS-20-14 |
| Topic: | Strategy |
| Subjects: | Corporate strategy, Ecosystems, Entrepreneurship, Innovation, Organisational development, Technological innovation |
| Industry: | Consumer goods, Manufacturing, Technology |
| Geography: | China, International |
| Pages: | 10 |
| Format: |
