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Chinese Firework Case Analysis Essay

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Case Title
The Chinese Fireworks Industry- revised

Date
October 8th 2012

1. Issue identification:
Jerry Yu is considering whether to invest in Liuyang fireworks factory, so he made an evaluation of the Chinese firework industry. Here is a brief identification of the issue:

1.1 History of fireworks:
There is an old-line of the Chinese fireworks, which is tightly combined with varieties of celebrations and festivals in China. Especially, Liuyang is known as “the home of fireworks and firecrackers” and good at making varieties of fireworks. And fireworks and firecrackers has become the pillar industry of Liuyang.

1.2 Product:
Fireworks mainly include two categories: display fireworks and
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Department of Transportation. The fireworks are all of high- quality, so no special storage was required.
Also, in the most Europe, similar regulations were in place for safety considerations, only the requirements were regarded as less stringent. In Canada, regulations were extremely restrictive. However, over the past decade Chinese fireworks companies had made great strides in the Canadian market.
As to the domestic market, during the 1990s, increased concerns over environmental pollution and safety of human life and property led more and more cities to regulate he consumption of fireworks and firecrackers. However, all this began to change in the mid-2000s. Beijing lifted a 12-year ban on fireworks in 2005 and other cities followed suit. Over the next ten years, many legal restrictions were lifted.
Offensive strategy to increase the sales of fireworks:
Speaking of Liuyang, in 1997, seeing the decline of its fireworks sales, Liuyang Firecrackers and Fireworks Industry Department, the government agency in charge of the overall development of the pillar industry, decided to start an offensive strategy. First, it opened local offices in most of the 29 provinces, major cities and regions to promote Liuyang fireworks. Second, it regulated the prices that Liuyang fireworks companies could quote and sell in export sales. Third, it resorted to a government-to-government relationship in order to secure contracts for large public fireworks displays
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