Geely Motor Case Study

Entering an untapped international market can strengthen a business tremendously—but what if the costs outweigh the benefits for the market itself? China has long been an important player on the global stage, but recent advances in manufacturing, natural resources, and energy production have catapulted the expansive country to the forefront of international trade. Currently the world’s fastest growing major economy, China is set to eclipse the United States as the world’s largest economy by 2016. Among various domestic and international plays, one of China’s most fascinating uses of its

The legal system is another issue to be considered when doing business in China because it is still viewed as being in a developing stage. Contracts, for example, are highly influenced by this difference. In the Chinese culture, contracts describe how relationships will be developed whereas in the United States, the contract is a binding agreement that spells out the specific terms, conditions and expectations from each party involved. As Company X pursues the possibility of expanding business to China, it must understand that the Chinese business culture does not place as much emphasis on the binding force of a written contract.

One of the key objectives of the Federal-Mogul Motorparts global communications function is to position positively the company’s latest news and developments with trade, business and consumer media throughout the world. Whether it’s a trade show, a recruiting fair or a facility tour with media in attendance, when managed properly, these types of activities provide reporters with the right tools and messages for them to develop news stories that portray Motorparts in a positive light.

The following examines the nation of China and its trade relations with the world, particularly the United States. The focus is primarily on China’s culture and how it impacts business dealings with other countries. Areas examined include: Religion, Management Philosophy, and Business Etiquette. Also discussed is China’s growing status as a world super power and how that has impacted the global business landscape. Likewise, various trading partners are examined and the effects of doing business with China, specifically for the United States. Points of concern for the United States are things such as the

China is the largest market in the world, and probably the hardest business environment. This narrative reflex China’s immense diversity, complexity, and its enormous competitive intensity is unrivalled versus the world.

Nothing is more important for global companies today than having the dexterity to be simultaneously local and international, to swiftly respond to regional preferences while scaling operating tactics and manufacturing improvements around the world. And as Honda's success in the international arena demonstrates, this capability is directly linked to unremittingly reexamining with every new automobile model - more broadly, with every new undertaking what is already believed to be

General Motors is one of the largest car manufacturing companies in the world. Best known for their automobiles, General motors have become a household name and an empire. It did so not only by selecting the right brands and manufacturers to work with but by remaining innovative and creating designs as rapidly as society develops. If you don’t think of GM when thinking of the auto industry, surely one of their many popular brands comes to mind.

Much like any manufacturing, the American auto industry is directed to global competition. As declared beginning, the car was first developed in Germany and France. In 1995, the United States and Japan made a business contract that supplied more seller outlets and provided natural replacement part is selling in each other’s countries, (Nauss 1995). This makes auto components and replacement auto pieces for Japanese cars manageable to reach in the United States and vice versa. Not only does this supply for more USA works, but it more supplies for more Japanese operates in the car industry,(Nauss

As a Wholly Owned Foreign subsidiary in the Chinese market Our Aero Engine Assembly and Maintenance firm will encounter significant challenges as a Greenfield start up within the Chinese markets and our Human Resource Strategy will be key to competitive advantage.

The current structure of the US auto industry is a who’s who of Fortune 500 companies, with long track records of success, and gold mines of innovation. The current market structure in place has many of the same foundations as the industry of the pre World War II era, with some important foreign additions from Japan and other countries (“Markets Data Center”, 2011).

General Motors Company designs, manufactures, and sells cars, trucks, and automotive parts. GM is headquartered in Detroit, Michigan and employs approximately 215,000 people globally (General Motors Company SWOT Analysis, 2016, p. 3). The organization is a multinational company with operations in North and South America, Europe, and Asia, primarily in China. GM’s North American product lines are Buick, Cadillac, Chevrolet, and GMC. Vehicles manufactured and sold in South America and Europe include those sold in America as well as Holden, Opel, and Vauxhall. Vehicles produced and sold in the Chinese market include the Baojun, Jiefang, Wuling, Buick, Chevrolet, and Cadillac (General Motors Co., paras 1-2).

With China emerging as a global power in business within the last decade, knowing about doing business in China has become more important than ever. There are both many advantanges and challenges with doing business in China in this modern era, and understanding both sides of this coin is the key to being successful in China. Some aspects to keep in mind include the cultural barrier, the price of the work force in China compared to the United States, and have the “made in China” brand be accepted back in the United States.

China is becoming more westernised, particularly the ‘cosmopolitan’ city of Shanghai, where demand for Western products is increasing rapidly as disposable income rises in line with China’s strong economic growth. Michel’s wanted to establish a foothold in the market at an early stage to demonstrate a long-term commitment, which has been identified as essential to compete successfully in the Shanghai market (per Tim Harcourt, Austrade Chief Economist).

Fock, H K. Y. and Woo. K.S. (1998). The China Market: Strategic Implications of Guanxi. Business Strategy Review, 9(3):

China has long been considered a nation that produces poor quality products. All Chinese products have long had “a reputation for shoddy workmanship” in the eyes of overseas consumers and the abysmal failure of the “Landwind SUV, made by Chinese automaker Jiangling Motors,” during its international “safety test that scored 0 out of 5 in passenger-cab protection” surely didn’t create an exception for their automobile products (Dess, Lumpkin, Eisner, 2010). This puts Geely automotive at an extreme disadvantage when compared to their industry competitors (such as Toyota, Chrysler, and Volkswagen etc.) in overseas markets as they will need to work hard to differentiate their brands from the detrimental brand recognition of other Chinese product-based company’s. They have not attempted to remedy this weakness directly (by advertising industry crash test comparisons, promoting the life span of their vehicle in comparison to competitors etc.); however, they have attempted to work around it by focusing on their research and development which increases product innovation and gives Geely unique and hard to imitate competitive advantages. This weakness of perceived poor quality by their overseas consumers will