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152234 Business Model Innovation

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152234 Business Model Innovation

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Course Code: 152234
University: Massey University

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Country: New Zealand

1. Identify the key issues and decisions/actions that enabledHaier to become a successful enterprise
2. What was the original business model? How is the new model different? What is innovative about it? 
3. Drawing from the readings so far, as well as others found on the reading list (or through your own research), reflect on the importance of business model innovation in for Q the situation.Some questions you could answer include:

In what business(s) does Haier compete?
•Who is (are) their customer(s)?
What is the “job to be done”?
What (if any) is (are) the company’s unique core competence(s)?
What is (are) the customer value proposition(s)?

Business Model

Internet is becoming increasingly available, the cost of connecting has reduced, there is more creation of devices with Wi-Fi capabilities and sensors mounted into them, the cost of technology is gradually going down, and the penetration of smart phone is increasing rapidly.  This is what has led to the conception of a term referred to as ‘internet of things’.
Internet of Things is simply networking of physical objects or computing devices which include cars, machines, home appliances, and more – that use sensors and APIs that enable them to send and receive data. Xu, Ding, Li, & Wang (2018) this concept, not only has the capability of impacting how we are living, but also how we are working. It is basically about connecting devices with an off and on switch to the Internet. The truth is that Internet of Things creates many of the imaginable connectivity and chances which tend to occur nowadays that we can’t comprehend. It is not difficult to see how and why the Internet of things is such an important topic today.  The best thing to be done is to thoroughly educate ourselves about this topic especially, how it affects   how we work and how it also affects our lifestyle (Xia, Yang, Wang, Vinel, 2012).
HAIER is a home appliance company which has fully recognized itself around the internet of things. This is one of the largest and fastest growing companies that is always ahead of technological changes.  Ashton (2009) now that another economy is almost emerging, with similarly broad effects it is now once again changing and adapting, it now revolves itself around the Internet of Things (IoT) which mainly involve the interconnection of several devices and activities of humans combined with sensors, robotics, and artificial intelligence. For the company to reach at its maximum potential, it had to adopt a more swift and proper model to realize its objectives. It adopted Rendanheyi –which is a model that ensures that none of the employees feel distressed or overlooked thus allows the organization to renovate step by step as a result of the changes Internet brought about to the usual patterns of economic level. This framework is re-considered to be the connectivity which ought to exist among the users and the employees of the company and not forgetting the firm itself and the market. 
There has been advancement in the Internet to the point it has embraced dynamism both in organization and management concepts and models. (Milito, Zhu & Addepalli, 2012, August) this has led to advancement, development and adoption of several business models such as Rendanheyi model by Haier Company. Haier is a company that was founded by Zhang Ruimin who is currently the CEO and the chairman of the Board of Directors. In the year 1984, Zhang Ruimin, who by then was a young entrepreneur, was given a post as the Director of Haier. By that time, the company had quite a huge number of debts. (Fernández, Sánchez, Álvarez, López, & Iborra, 2017) it produced a low quality refrigerator which ranged up to to 10,000 in number each year. Most of the workers were in terrible state, some were unkempt and incompetent. Zhang had to destroy around 76 refrigerators. Working together with the co-founder and President of Haier, Ms. Yang Mian Mian and other leaders, they have strategically led to the growth of the company.
Recently Haier through its CEO, displayed its growth in the Innovation Model, Rendanheyi at the Global Center for Innovation Model Research. Rendanheyi is a model that elucidates the connection among employees and users. Another model that was proposed alongside Rendanheyi was Market Chain, which basically connects the company with the market. Rendanheyi has always had three concepts which has enhanced its growth. The first one, is that the three has been a transformation in the enterprise from closed kind of system to an open source system. With the outside contributor, according to Gubbi, Buyya, Marusic, & Palaniswami (2013), there has been a monitoring of self-governance in microenterprises which have communication that flowers. Secondly, transformed number of employee and also from executors of top-down. Thirdly, transformation of the purchases of offering, from the customers to users of the products and services that are designed to solving challenges and increasing the customers’ satisfaction.
For Haier to remain a leader in the market, what it does is to reshape and reorganize beside Internet of Things. This company has been the fastest-growing company in the sector of home appliances commodities.  According to Inki (2016) the development of technology, the company has shifted to sensors and artificial intelligence which are the world’s booming technologies. The company, has adopted a strategic business model canvas, which has played a vital role for its growth through the implementation of several model components. Some of these components include; Key partners who have enhanced it’s growth, Customers who are the major key players. These customers through rendanheyi model, have been developed and equipped. Others are suppliers, Value chain components which bases itself on creating better quality.
When Haier implemented rendanheyi model, it completely changed its structure to fit more entrepreneurs. The company came up with microenterprises which are located across the globe. Each microenterprise has a leader who has power of decision making, hiring staffs, controlling distribution.
Rendanheyi 2.0, an introduced next phase for company, aims to enhance the achievement of its objectives or rather mission which is all transforming to become better shareholders. In this model, employees have the capability of becoming entrepreneur with decision-making authority, they are able to enable distribution benefits. Rendanheyi model has completely changed the way Haier company approaches these creativity and innovations. Kreicbergs,  & Carlsson, 2017) this has made the company to overstretch and overcome competitors to become the leading in the market. For instance, they have established incubation platform called Hai Chuang Hui(HHH), that has been investing in startups ventures of its employee among others. This is after applying several other business models which could not match rendanheyi one.
Haier has faced a lot of competition from the local and internatinal markets such as USA and its environs. To curb this, there was need to venture more into Internet and Internet of Things. Internet of Things (IoT) refers to connection through the internet of objects from several devices which are equipped with several sensors, actuators, and many technical. This is the next stage or phase in the evolution of the internet. Pernuš, (2016) to create smart objects, what is done is to insert identity, sense, networks and ability to process information or items and objects. The ability to sense basically is developed via sensors, these gives the objects the ability of acting on it. Haier, can use IoT in several areas, for instance, they can adopt using self-driving cars. Moreover, the vehicles say, two can be connected through IoT and when approaching a corner, one of the car can alert the other one hence, avoiding causing accidents (Wortmann & Flüchter, 2015). Haier can also use thermostat which can commune with the lathes which is used for cooling purposes in the factory. The thermostat can switch off the moment it reaches desired temperature thus saving Haier a lot of money.
The company can also use IoT to create new revenue sources or streams, improving regulation compliance, it can also improve existing business model.
Haier can also experience some economic uplift. It leads to high productivity growth within the company especially the moment of diminishing. In addition to all these, there are other application areas in IoT which the company can venture into and lead to it people blossoming. These includes, smart homes, in agriculture, in industrial manufacturing etc. Haier can also venture into research and investment on this area to experience enormous growth. Such ventures include, developing product sensors, building devices and selling (Stragapede, 2017). Nevertheless, despite not having delved deep into these stuff, Haier, has tried to focus on some key areas, such as development of user sensors, or development of devices which monitors the behavior of the users. This has enabled the company to track its customers by knowing how they feel about a certain products, and how they react to some products too.
The following are some of the functional features which Haier can implement to more success. The core one is connection and normalization, (Weber & Weber, 2010) these means that the platforms should be able to retrieve important data from several devices. It also needs to put the devices in one software. The second, is managing devices, this means that ensuring and checking that the devices in connection are operating well and properly. The other one is platform for database. Most IoT stuff might not be kept in a database, its better if kept well, both structured and unstructured. This will enhance real-time analysis of the data which are in servers.
Internet of Things is a new game changer for the Internet & it is such a very significant research topic for researchers in computer science & information technology. It’s definitely a very impactful revolution that will lead to the success of enterprises and will also l completely change the way to get our day to day tasks done. When it is applied to any business model, it’s more likely to yield success. Haier, after applying rendanheyi model, which is a Win-Win model for to the employees, it has successful kept the company above the other competitors. This model, was so vital to the point that it unified the employees to the company, whereby it connected employees to users. That is, employees after sometime, could become users and acquire authority within the company. The rendanheyi model has changed the way innovation would be approached. It has already boosted Haier’s position in today’s Internet economy, and it has provided more leverage in the internet of things IoT world. Still another very vital model that was used still by the same company, was known as the Chain Model, this one was the connection between the organization and the market.
Xu, H., Ding, J., Li, P., & Wang, R. (2018). Edge computing-based security authentication algorithm for multiple RFID tags. International Journal of Intelligent Information and Database Systems, 11(2-3), 132-152.
Ashton, K. (2009). That ‘internet of things’ thing. RFID journal, 22(7), 97-114.
 F., Milito, R., Zhu, J., & Addepalli, S. (2012, August). Fog computing and its role in the internet of things. In Proceedings of the first edition of the MCC workshop on Mobile cloud computing (pp. 13-16). ACM. Architectural elements, and future directions. Future generation computer systems, 29(7), 1645-1660.
Fernández, D., Sánchez, P., Álvarez, B., López, J. A., & Iborra, A. (2017, June). TRIoT: A Proposal for Deploying Teleo-Reactive Nodes for IoT Systems. In International Conference on Practical Applications of Agents and Multi-Agent Systems (pp. 70-81). Springer, Cham.
Gubbi, J., Buyya, R., Marusic, S., & Palaniswami, M. (2013). Internet of Things (IoT): A vision, Bonomi
Inki, T. (2016). Käyttäjien osallistumisen motivaatiotekijät älykaupunkialueella eksperimentointiin.
Kreicbergs, A., & Carlsson Stiernspetz, E. (2017). Value Creation in IoT:-A Case Study at Telenor Connexion
Pernuš, K. (2016). Uporaba odsluženih pametnih telefonov za video nadzor hiše (Doctoral dissertation, Univerza v Ljubljani).
Stragapede, V. (2017). Smart tourism: perspectives for Italy.
Weber, R. H., & Weber, R. (2010). Internet of things (Vol. 12). Heidelbe Yang, S. H. (2014). Internet of things. In Wireless Sensor Networks (pp. 247-261). Springer, London. rg: Springer.
Wortmann, F., & Flüchter, K. (2015). Internet of things. Business & Information Systems Engineering, 57(3), 221-224.
Xia, F., Yang, L. T., Wang, L., & Vinel, A. (2012). Internet of things. International Journal of Communication Systems, 25(9), 1101-1102.

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