Case1_Notes - Basics Need to create Chinese-American joint...

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Basics Need to create Chinese-American joint venture o Wants to become major player in Asia Cultural differences troublesome between Chinese and American partners o Work styles also differed Details Electrowide, Inc. (US) and Motosuzhou (China) joint venture o “In order to compete successfully in today’s globally expanding economy, Electrowide realized it needed to quickly serve markets and that the best way to do this was to locate production in Asia.” Electrowide, Inc: manufacturer of automotive electronic products o Changing strategic direction by becoming a “ major, aggressive player in Asia” o Objective for joint venture: Needs Asian partner to help manufacture and sell engine management systems for Chinese-made vehicles Would promote business growth and provide product development expertise in the region Motosuzhou: assembly-line manufacture of engine control subassemblies o Government organization o High power distance (strong hierarchy) Creates long approval process for decisions o Achieve economies of scale, but competition grows o Objective for joint venture: “develop a long-lasting relationship that will work in harmony with local government policies… …as well as to gradually acquire technology through transfer by importing equipment and designs and adapt them to the automotive industry.” BUT not too quickly Hard to conduct business in China – government becoming more restrictive with JV o Grows economically BUT scoffs international trade “US firms must forge alliances based on common interests to ensure effective market entry” o “If the Chinese leaders are threatened and demeaned… China will surely behave in an increasingly disruptive fashion.” Gain China’s cooperation by focusing on its vast need for the investment and technology that America has to offer America’s aggressive transformation mission: seek global pursuits at a rapidly expanding rate in order to become a $10 billion international enterprise o America seems to be looking for an “aggressive, rapid” transformation, while China is
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