1. What is the strategy for Geely’s international market expansion? 2. What pote
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Question
1. What is the strategy for Geely’s international market expansion?
2. What potential obstacles might Geely encounter as it attempts to integrate its Volvo acquisition and expand its international presence? Can it overcome these obstacles?
Case 28 Zhejiang Geely Automotive's Purchase of Volvo* In 2011 Geely Automotive Chinese carmaker, but it had put in place a plan desi to catapult it to international standards. Geely had started off manufacturin was still a relatively unknown year. The firm employed 12,000 workers, including gned more than 1,600 engineers and technical personnel. In the governmental approval 86, and it had o establish a new base in Jinan of Shandong Province nning to set up a com addition , Geely had gotten g home appliances in 19 only been manufacturing automobiles since 1997. But n eastern China. Geely was pla and chairman of the board, Shufu Li, plete vehicle production base in Harbin, capital of Hei short period longjiang Province, in northeastern China. It was nearing had ambitious plans for Geely. In a relatively short period of time, he had steered Geely into becoming the largest privately owned carmaker in China. But he would not longiang Province, in n the conclusion of talks with the ment . The first phase of the project would have capac- ity of around 100,000 to 150,000 vehicles annually. This p to world-class able to compete with stop there-he hoped to bring Geely u would be the automaker's eighth manufacturing facility and Toyota. Mr. Li believed that only in China. Additionally, Geely had signed an agreement standards. He wanted Geely to be by becoming as good as the best foreign brands could Geely compete both in China as internat with Cixi city government of Zhejiang Province to build ell as internationally. a RMB18.8 billion (US$2.81 bilion) auto industrial city He knew this would be difficult, as independent Chinese automakers are known to have problems in operations, with annual production capacity of the Cixi economic development zonc Geely produced automobiles under five key brand groups: Geely, Maple, Gleagle, Emgrand, and Englon. car manufacturer to have developed its own range of engines, which had capaci- er to 1.8 liters, supporting auto- Geely was ranked as one of the country's top 500 firms. It was a fully integrated independent auto firm with a complete auto ecosystem from design and R&D; to production, dis- design, safety, quality, and brand-building. As part of this plan, Geely's parent company, Zhejiang Geely Holdings, acquired the iconic Swedish automaker Volvo from Ford The firm was the only Chinese . This case presents the situation and challenges faced by Geely as it attempts this epic ties ranging from transformation from refrigerator class automaker lit matic and manual transmissions. By 2010 manufacturing to wor Geely's History Geely Motors was based in the historically important tribution, and service. Geely began to attract attention as city of Hangzhou, the capital city of Zhejiang province. the company experienced rapid growth. Through a broad Geely, whose name denotes fortune and luck () in distribution network consisting of 500 4 (sale, spare- Chinese, was founded by Mr. Shufu Li in 1986. Geely's tto is “nasson n professional dedication, innovation, parts, service, and survey) shops and nearly 600 service stations all over China Geely sold over 330,000 vehiclesExplanation / Answer
1 - The Founder of Geely Mr Shufu Li Always believed in becoming a world-class brand which would make them on par with some international brands like Toyota, Ford etc. This would also ensure that Geely invests in research and development which would make their cars niggle free.
Geely has expanded rapidly in China since its inception in 1997 (automotive market), now they are eying same expansion in internationally. For that Geely had tried to acquire companies of its interest, for instance, they had acquired the Drivetrain systems, a leading transmission developer based in Australia, this helped them in entering the market of Australia. Secondly, they had acquired Volvo, one of the trusted brand, from Ford which had added tag makers of Volvo in their pocket
Moreover, Geely designs market specific products to enter that market, they used to research and design the products which would be suitable for that particular market, which helped them in proper penetration. They also had many Joint ventures with foreign companies to manufacture their products, they had an agreement with Manganese holdings for manufacturing of iconic London Black Cabs. The above-said strategies have helped Geely to mark and expand its presence internationally.
2 - Volvo is a Swedish brand which is known globally for upscale cars and one of the safest cars on roads, whereas Geely is Chinese brand who is yet to leave a footprint globally and even in China it is seen as low-cost car manufacturer with low safety standards. There would be obstacles which Geely might face as it attempts to integrate its Volvo acquisition and expand its international presence, following are few
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