Chang'an Automobile and the Chinese automotive industry

2011 ◽  
Vol 1 (4) ◽  
pp. 1-30 ◽  
Author(s):  
Michael Roberto ◽  
Grace Chun Guo ◽  
Crystal X. Jiang
Keyword(s):  
Automotive Industry ◽  
Economies Of Scale ◽  
Joint Venture ◽  
Central Government ◽  
Emerging Market ◽  
Auto Industry ◽  
High Growth ◽  
Foreign Firms ◽  
Content Type ◽  
The Usa

TitleChang'an Automobile and the Chinese automotive industry.Subject areaInternational businessStudy level/applicabilityUndergraduate/graduate/executive education.Case overviewChina has become the world's largest producer of automobiles, surpassing the USA and Japan. The Chinese auto industry differs quite significantly from those countries though. While the industry exhibits a substantial degree of concentration in the USA and Japan in early 2011, it remained highly fragmented in China. The Chinese Central Government had announced a desire for consolidation, yet it remained unclear whether a significant shakeout would occur in the near term.Like many Chinese automakers, Chang'an partnered with well‐known global auto makers to develop, produce, and distribute its products. In the coming years, Chang'an hoped to develop more independence from its foreign partners, including the production and distribution of self‐branded cars. However, the company grappled with how it could strive for independence while managing its existing joint ventures. Executives worried too about how to compete with foreign automakers who had achieved global economies of scale.The case provides a rich description of the evolution of the Chinese auto industry, and it documents how the Chinese industry differs from other global markets. Readers can analyze the extent to which they believe scale economies provide foreign firms an advantage over smaller Chinese rivals, and they can evaluate the conventional wisdom regarding the industry's minimum efficient scale. The case also provides a detailed account of Chang'an's rise to prominence. The case concludes by offering an in‐depth description of the firm's key rivals, and it presents the key questions being considered by Chang'an executives in 2011.Expected learning outcomesEnables students to examine how and why an industry's structure can differ substantially across geographic markets. Enables students to examine whether the need to achieve economies of scale may cause substantial consolidation in the Chinese auto industry. Provides an opportunity to evaluate the pros and cons of the joint venture strategies employed in China. Provides an opportunity to examine how a relatively small firm can position itself against large multinationals in a high‐growth emerging market.Supplementary materialsTeaching notes.

Institutional impacts on ownership decisions by emerging and advanced market MNCs

2017 ◽  
Vol 24 (3) ◽  
pp. 454-481 ◽  
Author(s):  
Rushiun Liou ◽  
Kevin Lee ◽  
Scott Miller
Keyword(s):  
Institutional Theory ◽  
Fixed Effects ◽  
Emerging Market ◽  
Multinational Companies ◽  
Institutional Distance ◽  
Foreign Firms ◽  
Positive Direction ◽  
Content Type ◽  
Cross Border ◽  
The Usa

Purpose Emerging-market multinational companies (EMNCs) utilize cross-border merger and acquisitions (M&As) to acquire strategic assets that compensate for their resource deficiencies. Therefore, developed markets have become important destinations for EMNCs. Institutional distance constitutes a major source of competitive disadvantage for foreign firms competing with indigenous firms. The purpose of this paper is to examine the ownership pattern of cross-border M&As in the USA, and determine if EMNCs respond to institutional distance differently than advanced-market multinational companies (AMNCs). Design/methodology/approach Based on the extant literature in institutional theory as well as internationalization strategy, a quantitative study was carried out. Hypotheses were proposed and tested using fixed effects panel regressions. Findings This paper finds that both AMNCs and EMNCs take smaller ownership positions when there is greater cognitive and normative distance. The negative association is stronger for AMNCs than for EMNCs. Further, the larger the regulative distance in the positive direction, meaning a higher level of development in the host market than in the home market, the more AMNCs and EMNCs are led to opt for a higher ownership position, with EMNCs being less influenced by regulative distance. Research limitations/implications Though findings are robust and stable, this study is limited to observations that only have US target firms. Originality/value By integrating the literature from institutional theory and strategy, this paper offers a clearer understanding and distinction of the acquisition decisions made by EMNCs and AMNCs.

What makes up intentions to purchase the pioneer? A theory of reasoned action approach in India and the USA

2018 ◽  
Vol 13 (5) ◽  
pp. 734-757 ◽  
Author(s):  
Tarek Mady
Keyword(s):  
Social Norms ◽  
Purchase Intention ◽  
Structural Equation ◽  
Theory Of Reasoned Action ◽  
Reasoned Action ◽  
Dominant Role ◽  
Emerging Market ◽  
Equation Modeling ◽  
Content Type ◽  
The Usa

Purpose The purpose of this paper is to extend the research paradigm focusing on behaviorally-based first-mover advantages (FMA) by applying the widely-accepted Theory of Reasoned Action (TRA) and offers insights into differences between a mature market (USA) and an emerging market (EM) (India) regarding how intentions to purchase the pioneer are formed. Design/methodology/approach Utilizing samples of 208 USA and 194 Indian consumers, hypotheses examining the underlying beliefs, attitudes, social norms and purchasing intentions regarding pioneer brands are developed and tested using structural equation modeling. Findings Insights from the study suggest the TRA provides a means for assessing behaviorally-based FMAs across cultures, even as manifestations of purchase intentions differ significantly. According to the TRA and findings of this study, intentions are a function of overall attitudes and social norms. In the USA, individual attitudes were found to play a more significant role than social norms in formulating purchase intention. In India, social norms played a more dominant role in intention formation. Originality/value The study represents one of the first empirical attempts to shed light on the extent of behaviorally-based FMAs in an EM and how manifestations of intention to purchase the pioneer differ from mature markets. The study expands the behavioral paradigm of analysis to include one of the most sought-after EMs today (India) and provides one of the first empirical studies to utilize the TRA in addressing behaviorally-based FMAs.

scholarly journals THE EMERGENCE OF THE AUTOMOTIVE INDUSTRY IN CHINA

2021 ◽  
Author(s):  
Olga Krause ◽  
◽  
Nadiya Golda ◽  
Iryna Pinyak ◽  
◽  
...  
Keyword(s):  
Automotive Industry ◽  
Automobile Industry ◽  
Economies Of Scale ◽  
Joint Venture ◽  
Developed Countries ◽  
Engineering Industry ◽  
General Motors ◽  
Small Range ◽  
Foreign Companies ◽  
Car Market

The engineering industry, including the automotive industry, belongs to the strategic branches of the country’s economy and to a large extent determines the level of development. The Chinese automobile industry dates back to 1953, and the first automobile factory, the First Automobile Works (FAW), was started in Beijing. Over the next few years, several more car factories were established in Nanjing, Khanhai, Jinan and Beijing. The requirements of funds, technologies and automotive modernization stimulated the attraction of external investment. A number of restrictive measures have been adopted to curb external competition, reduce car imports and attract innovative technologies, including high tariff and non-tariff barriers, screening, and restrictions on foreign capital, Limiting market share to foreign companies. When signing the joint-venture agreement, the Chinese side insisted on technology transfer and subordination to the Chinese leadership. Volkswagen first built a car factory in China. Today almost every progressive car company is represented in the Chinese car market, such as Mercedes-Bens, Ford, General Motors, Suzuki, Daihatsu, Honda, Subaru, Citreon, Toyota. Most of them have partnerships with one of China’s top three car manufacturers. American, European, and Japanese automakers see China as a promising market as demand for vehicles in the US and Europe shrinks. To the Chinese automobile market, the cars are made according to the requirements of the local consumer – conservative, with high-quality design, low and middle price segment. Since 2009, foreign automobile companies have accounted for 85% of the Chinese car market. About 60% of the cars sold in China are locally produced. However, China’s automobile industry is highly fragmented and mostly consists of small companies that produce a small range of components. Such production is labour-intensive with relatively low use of advanced technologies compared to car manufacturers in developed countries, often lacking economies of scale. Research expenditure accounts for a large part of the expenditure structure. Most companies produce low-tech parts with significant import presence.

Dynamics of country image: evidence from Malaysia

2020 ◽  
Vol 32 (8) ◽  
pp. 1675-1697 ◽  
Author(s):  
Dana-Nicoleta Lascu ◽  
Zafar U. Ahmed ◽  
Irfan Ahmed ◽  
Tan Hui Min
Keyword(s):  
Free Market ◽  
Emerging Market ◽  
Welfare System ◽  
Country Image ◽  
Labor Costs ◽  
Market System ◽  
Content Type ◽  
Technological Research ◽  
The Usa ◽  
Free Market System

Purpose Previous research has posited country image to operate at two levels: the country’s macro image, based on general politico-economic descriptors of the country, and the country’s micro image, based on perceptions of products from the country. The purpose of this paper is to further explore this premise in a practical study, using a psychometric assessment of macro and micro country images by ascertaining the nature of differences in macro and micro images of leading exporters, the USA and China, for consumers in Malaysia, a top import destination of US and Chinese goods; the images of Malaysian goods were similarly assessed. Design/methodology/approach The study used a systematic sample, with questionnaires distributed to adult respondents using a street intercept. Interviewers asked every other passer-by to fill out a questionnaire, and stood in close proximity to address any questions from respondents. The study hypothesized that there is a significant difference between country macro and micro image, respectively for the USA, China and Malaysia, and that there is significant relationship between country macro image and country micro image in each country, respectively, USA, China and Malaysia. Findings The study found support for the reliability of existing country micro and macro image measures, and further refined them for increased validity. The study compared between the countries and found significant differences on both macro and micro dimensions of country image. The US scored highest on technological research, high quality products, standards of living, labor costs, welfare system, industrialization, civilian government, development, literacy, free-market system and democracy, followed by China on technological research, industrialization, development and free-market system, with Malaysia scoring higher on product quality, labor costs, welfare system, civilian government is civilian/non-military, literacy, free-market system and democracy. Research limitations/implications A broader study of countries that share geopolitical and cultural similarities might offer additional insights into country macro and micro image. Practical implications The study cautions marketers to assess the acceptance of their products in the context of their country’s macro and micro image perceptions in target markets, and steer those perceptions in a manner that would be beneficial to their marketing efforts. Originality/value The conceptualization of the macro and micro aspects of country image has been one of the less studied dimensions of country image. This study is the first to address these dimensions from an emerging-market perspective, suggesting that, at the macro level, country perceptions regarding technology, economy, and politics contribute to an overall impression of the country, which would then influence the desirability of its products originating there. For the micro country image, products from countries perceived as innovative, excelling in product design, and producing prestigious products, are likely to be perceived as desirable.

Strategic merge: a gain or a gamble – the case of Telco China

2019 ◽  
Vol 9 (2) ◽  
pp. 1-23
Author(s):  
Wing Sun Li
Keyword(s):  
Undergraduate Students ◽  
Business Performance ◽  
Joint Venture ◽  
Low Cost ◽  
Emerging Market ◽  
High Tech ◽  
Competitive Strategies ◽  
Content Type ◽  
Differentiation Strategy ◽  
Academic Level

Learning outcomes By reviewing the case study, readers are expected to understand the constraints of competitive strategies in a shifting environmental landscape; the difficulties of foreign companies to sustain in an emerging market with government interventions; the subtlety of joint venture (JV) formation by partners with very divergent background, priority and agenda; evaluation of behavioural orientations of partnership and JV operational arrangements as determinants of a successful JV strategy. Case overview/synopsis High-tech companies can enjoy super profits from their products when only a few competitors can compete with them technologically. However, these companies also nurture a high-cost operational culture that sets a constraint for their further growth when superiority of the technology can no longer be maintained. High-tech companies may reposition their businesses with a strategic shift from differentiation strategy to cost focus strategy. The attendant shift as well as synchronization problem in an organization may require a larger effort to revamp. This case describes a global telecom infrastructure company with successful business performance in China in her early establishment with a pre-emptive technological edge. Mitigation of technological superiority and the rise of local competitors have forced the Company to opt for a cooperative strategy with a local player in the establishment of a low-cost joint venture. Does the new joint venture facilitate the strategic shift or just create an illusion of cooperation? Complexity academic level Undergraduate students and post graduate students taking strategic management course. Supplementary materials Teaching Notes are available for educators only. Please contact your library to gain login details or email [email protected] to request teaching notes. Subject code CSS 11: Strategy.

International student perceptions of experience in the West

2019 ◽  
Vol 12 (2) ◽  
pp. 147-166 ◽  
Author(s):  
F. Robert Buchanan
Keyword(s):  
Higher Education ◽  
International Students ◽  
Student Perceptions ◽  
Foreign Students ◽  
International Student ◽  
Emerging Market ◽  
American Business ◽  
Content Type ◽  
The Usa

Purpose The purpose of this exploratory study is an examination of some perceptions of US education, as experienced by foreign MBA students. Design/methodology/approach A longitudinal field study captured perceptions of a group of 51 international students over a one-year interval. The first anticipatory survey was done in India, and the follow-up was made in the USA at the end of a foreign sojourn semester. Inter-item correlations and t-tests were used to examine variance in student perceptions, highlighted by qualitative elements. Findings In general, the students went home, less impressed than they had expected to be in terms of the perceived general quality of the American business education, as well as their abilities to make friends with the local people. Additionally, the observed preparation of the American students for master’s studies was not nearly as high as the foreign students had anticipated. Research limitations/implications Results are not generalizable to broad populations, as the sample was small and localized. Social implications Emerging markets are successfully luring locals and sojourners based on cost and proximity as they achieve greater legitimacy in their institutional credentials. This could challenge the preeminence of Western higher education, especially in light of concerns arising from marketization and rigor. Meanwhile, developed market institutions need to be strategically mindful of their international guests as a resource rather than a commodity. Originality/value Extant internationalization studies tend to focus on administrative viewpoints, whereas this research examines the perspective of international students, which may be indicative of lessening gaps between perceptions of quality of developed and emerging market higher education.

Innovation and market liquidity: the case of ADRs

2020 ◽  
Vol 32 (4) ◽  
pp. 633-641
Author(s):  
Manuel Lobato ◽  
Javier Rodriguez ◽  
Herminio Romero
Keyword(s):  
Adverse Selection ◽  
Trading Volume ◽  
Design Methodology ◽  
Market Liquidity ◽  
Foreign Firms ◽  
American Depositary Receipts ◽  
Patent Citations ◽  
Content Type ◽  
The Usa ◽  
Depositary Receipts

Purpose Patents and patent citations provide a solid signal to investors about a firm’s innovation agenda. This signal can be even more useful for investors demanding securities from foreign firms, given the asymmetric information and adverse selection risk they face. This study aims to examine the patenting activities in the USA performed by non-US companies that trade as American Depositary Receipts (ADRs) in US stock markets. Design/methodology/approach The authors examine the effect on the trading volume of a sample of ADRs following the publication of their first patent in the USA. Findings The results show that the publication of a first patent has no effect on the liquidity of these ADRs when compared with same-country ADRs without patents. Originality/value This study enriches the literature on the relation between innovation, information and the stock market.

The return on investment from international patient programs in American hospitals

2019 ◽  
Vol 13 (2) ◽  
pp. 171-182
Author(s):  
Ishani Patel ◽  
Tricia J. Johnson ◽  
Andrew N. Garman ◽  
Samuel Hohmann ◽  
Paola Pescara ◽  
...  
Keyword(s):  
Health Systems ◽  
Return On Investment ◽  
Economies Of Scale ◽  
Business Case ◽  
Economic Benefits ◽  
International Programs ◽  
Operating Expense ◽  
Content Type ◽  
International Program ◽  
The Usa

Purpose Hospitals catering to the unique needs of international patients often make substantial investments in their international program. Research has yet to evaluate the return on investment (ROI) of establishing these programs. The purpose of this paper is to quantify the economic benefits and costs of international patient programs and evaluate the ROI of international patients for US hospitals by program maturity and size. Design/methodology/approach Operational information about 29 health systems with international patient programs in the USA was obtained from the US Cooperative for International Patient Programs (USCIPP) Annual Benchmarking Survey. A Spearman correlation coefficient was used to test the association between international program investments and revenue. Mann–Whitney U tests were used to test whether ROI differs significantly by program maturity and size. Findings It was found that 14 (48.3 per cent) international programs were established and 10 (34.5 per cent) programs were large in size. The median estimated organizational total gross revenue less operating expense for all programs was positive ($15.6m). Total gross revenue less operating expense was higher for large programs ($105.6m) than for small programs ($9.2m) (p < 0.001) and higher for established programs ($40.2m) than for new programs ($8.5m) (p < 0.001). Originality/value The results suggest that hospital investment in international programs yields substantial returns for the health systems studied. New programs rely on staff from other areas of the organization while developing operational processes and relationships with providers and payers abroad. Examining the ROI can help hospitals develop a business case for an international program and understand any economies of scale from increased investment.

Air Asia India: competing for air space in an emerging economy

2017 ◽  
Vol 27 (5) ◽  
pp. 516-532 ◽  
Author(s):  
Tulsi Jayakumar
Keyword(s):  
Multinational Enterprises ◽  
Business Models ◽  
Joint Venture ◽  
Low Cost ◽  
Emerging Market ◽  
Secondary Data ◽  
Emerging Economy ◽  
Competitive Strategies ◽  
Content Type ◽  
Country Specific

Purpose The purpose of this paper is to understand the competitive landscape of emerging market economies (EMEs) and the implications of business models and strategies used by multinational enterprises (MNEs) to enter and operate in such landscapes. It does so by considering the aviation sector in an emerging economy – India, and by studying the strategies pursued by AirAsia India – the Indian joint venture of AirAsia Investment Limited and Tata Sons.. Design/methodology/approach The paper follows a case study approach. Secondary data sources from the library, company website and newspaper articles have been used to build a case that would encourage students to discuss and analyze the competitive strategies followed by MNEs in EMEs. Findings Emerging markets offer attractive investment opportunities to MNEs across several industries. However, their markets for intermediate goods and services possess imperfections. Competitiveness in such markets will require going beyond country-specific and firm-specific advantages. MNEs will need to integrate location-specific advantages with internalization advantages of these market imperfections to operate successfully in the complex environments of EMEs. A one-size-fits-all approach of transposing successful strategies from home markets will fail to create value. Practical implications MNEs, such as AirAsia, will need to develop participatory skills to leverage the location-specific-advantages of EMEs and reduce their own curse of foreignness to be able to succeed in EMEs. Originality/value This paper contributes to extant literature by studying the competitive strategies pursued by a global leader in an EME. The case of the “World’s Best Low-Cost Airline” – AirAsia’s India operations seeks to go beyond the Eclectic Paradigm and the country-specific and firm-specific advantages framework, to provide a location-internalization paradigm for operating in EMEs.

Brazil's automotive recovery awaits new incentives

2018 ◽  
Keyword(s):  
Economic Crisis ◽  
Automotive Industry ◽  
Auto Industry ◽  
Automotive Sector ◽  
Content Type ◽  
Employment Conditions

Subject Outlook for the automotive sector. Significance The Brazilian automotive industry, one of the worst-affected sectors during the prolonged economic crisis, has been showing signs of recovery. Production and sales have experienced some improvement recently, although they remain below pre-recession levels. Production levels have been higher than domestic sales, as some output has been exported. The sector may play a key role in jump-starting the Brazilian economy. Impacts Domestic auto sales still depend on improvements in income, credit and employment conditions. New investments may be postponed by automakers if a decision is not taken on “Route 2030”. EU-Mercosur trade discussions may directly affect the Brazilian auto industry.

Sign in / Sign up

Export Citation Format

Share Document