2009

Appellation Shanxi: Grace Vineyard

Kirby, William C., Michael Shih-ta Chen, and Keith Chi-ho Wong
May 2009

Grace Vineyard was a rare family-owned, private winery in China that was set on establishing itself as a world-renowned, quality vintner. Judy Leissner, the second-generation company leader, was at a crossroads in how she wanted to grow the business that her father founded in 1997. Their wines were rapidly growing a strong following and had won international awards. How could the company capitalize on this success? Should Grace expand its operations to multiple Chinese provinces? Should Grace continue as a premium boutique winery serving a growing but ultimately limited niche market in China, or should it seek to make a mark internationally? Or should Grace respond to buy-out offers?

Xi'an International University: The Growth of Private Universities in China

Kirby, William C., Michael Shih-Ta Chen, Keith Chi-ho Wong, and Tracy Yuen Manty
May 2009

Huang Teng founded Xi'an International University (XAIU) as a private institute of higher education in 1992. Throughout its ensuing years, the school filled a niche and met the demand of students who did not test into one of China's public institutions. In 2008, it was seeking to grow by aggressively pursuing opportunities in other provinces and municipalities. Huang's plan was to franchise his university throughout China. However, in pursuing this strategy in Beijing, Shanghai, and Guangzhou, China's largest cities, Huang was not receiving warm responses. Local officials feared XAIU would jeopardize the survival of locally run private universities, and competition among private universities was heating up as institutions from the United Kingdom and Hong Kong partnered with public universities to form joint-ventured "independent colleges." Buoyed by the success of XAIU, Huang was confident that despite these setbacks, his franchise model would work. But was an alternative plan of expanding into second- or third-tier cities compromising too much of the groundwork that had already been laid, would it jeopardize XAIU's funding opportunities, and finally, would it hurt the academic quality and integrity XAIU had built up at home?

From xiaonei to hainei: The Quest for the Social Networking Service Market in China

Lassiter, Joseph B., Michael Shih-Ta Chen, and Keith Chi-Ho Wong
May 2009

Wang Xing, the founder of Hainei.com, one of the fastest growing social networking service (SNS) providers in China, was preparing to raise funds from venture capitalists. Since late 2003, Wang had established several Internet startups in China. Xiaonei.com, which he founded in December 2005, had been the most notable in China and around the globe for its resemblance in website design and marketing strategies to those of Facebook. The market landscape of SNSs in China had changed drastically since Wang founded Xiaonei.com, with domestic and local competitors flocking into the market. With all his experience and knowledge in the SNS market, Wang had to convince the potential investors that his new venture could warrant sustainable growth and profitable returns.

Baosteel Group: Governance with Chinese Characteristics

Paine, Lynn Sharp and G.A. Donovan
April 2009

The new outsider-dominated board of directors of China's state-owned Baosteel Group must decide whether to modify the Group's structure. With the completion of a pending acquisition, the Group will control four publicly listed steel-producing subsidiaries, and board members are concerned about competition among the subsidiaries and about the subsidiaries' public shareholders. Selected by the Chinese government as the first company to take part in a pilot project on corporate governance in state-owned enterprises, Baosteel and its board are under intense scrutiny by Chinese and overseas investors in the listed subsidiaries as well as by China's political leadership and the media. The case provides background on Baosteel, China's SOE reform, the Chinese government's pilot project on corporate governance, and the functioning of Baosteel's newly constituted board of directors.

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2008

The Hong Kong & China Gas Company Ltd.: Negotiating Joint Ventures in China

Sebenius, James K., Michael Shih-ta Chen, and Medha Samant
December 2008

To deliver 5-6 major new Chinese joint ventures annually, Hong Kong China Gas executives began extracting cross-border negotiating lessons from their 80 existing Chinese JVs. Chairman Alfred Chan and CEO Peter Wong knew that HKGC's growth strategy required significant mainland expansion through negotiating joint ventures to run gas and water distribution systems in diverse urban and rural locations throughout mainland China-often in the face of entrenched local interests who could have blocking power. Discussions with HKGC's negotiation teams revealed an increasingly sophisticated negotiating approach from target identification and party mapping, to "social mapping" and building guanxi, to creative deal design and tactics, in order to most effectively work out issues of equity, management control, territory, and exclusivity.

The Chubb Corporation in China

Jin, Li, Michael Shih-ta Chen, and Aldo Sesia Jr
December 2008

The Chubb Corporation, headquartered in the U.S., was the holding company for a number of property and casualty insurance companies which operated in 29 countries. In 1979, the Chinese government, as part of its "reform and open" policy invited a delegation of Chubb executives to discuss insurance issues. In the mid-1990s, Chubb opened representative offices in Beijing, Shanghai, and Shenzhen to do market research and assess the potential of the Chinese insurance market. In 2000, China authorized Chubb (one of only three foreign insurers) to sell insurance in the country. During the next five years China's non-life insurance industry grew from $8.3 billion in 2001 to $15.9 billion in 2005. Yet in 2007, domestic insurers continued to dominate market share and, Chubb had not realized the profits it had anticipated. The case provides an overview of property and casualty insurance, the Chinese insurance market and the challenges that foreign-based insurers have in entering an emerging market. Students are asked to decide what Chubb's China strategy should be moving forward.

PCCW now

Hagiu, Andrei, and Waishun Lo
August 2008

In 2007, PCCW had to formulate a strategy for growth of its successful NOW TV platform and its quadruple play implementation outside of Hong Kong. Launched in September 2003 by PCCW (Hong Kong's largest telecommunications operator), NOW TV had swiftly become the world's most successful commercial IPTV deployment. By the end of June 2007, the service had an installed subscriber base of almost 820,000 and offered a choice of 143 TV channels, 71 of which were exclusive. However, opportunities for growth were inherently limited to Hong Kong (7 million inhabitants), which meant PCCW had to find ways to expand its NOW platform or seek to license parts of it internationally.

Chunghwa Telecom Co., Ltd. (A)

Marshall, Paul W., Michael Shih-ta Chen, and Keith Chi-ho Wong
August 2008

In late November 2000, Chunghwa Telecom Co., Ltd., the once-monopolized telecom operator owned by the Taiwanese government, was on its way to privatization. Mr. C.K. Mao, Chairman of the company, who headed the job only three months earlier, after its prior chairman resigned unexpectedly in the midst of chaos brought by the resistance of its staff who feared losing their civil servant status after privatization. Also facing Mao was the forthcoming deregulation of the telecommunication industry on the island which would bring about new competitors on fixed-line services, in addition to the already competitive mobile communication segment where the company's once dominant market share was heavily eroded. Mao had to decide on the pricing strategies for the company's various product lines, including fixed line, mobile services, as well as data communication. He also needed to ponder on how to revise the company's compensation system to better motivate its staff in a deregulated market and communicate all these changes to the unionized labor force.

Wanxiang Group: A Chinese Company's Global Strategy

Abrami, Regina, William C. Kirby, F. Warren McFarlan, Keith Chi-ho Wong and Tracy Yuen Manty
June 2008

With an almost forty-year history as a business in China, the Wanxiang Group has navigated through the significantly different political and economic changes in China to succeed as a global leader in the auto parts industry and to develop into a broad business conglomerate. Beginning in 1994, when it first began its operations in the United States, Wanxiang started to expand its role as a parts supplier into a discerning acquirer of distressed companies in the U.S. While it saw acquisition as an exciting means for growth, company strategy at its Hangzhou, China headquarters also included vertical integration with a goal of developing a full-on electric car. Were these two goals divergent or complementary: mutually supportive or exclusive?

Taiwan Semiconductor Manufacturing Company Limited: A Global Company's China Strategy

Kirby, William C., Michael Shih-Ta Chen, and Keith Wong
June 2008

After fifty-five years in the semiconductor industry, Morris Chang, founder and Chairman of Taiwan Semiconductor Manufacturing Company (TSMC), was seeing a change. After four decades of regular double-digit growth the industry was still growing-but now at a much slower pace. In 2004, TSMC entered the China market, the world's second largest for semiconductors, by building a fabrication plant in Shanghai. Was China the market opportunity in which TSMC could bet on for expansion, or should its strategy be to focus on new product development and innovation?

Inner Mongolia Yili Group: China's Pioneering Dairy Brand

Abrami, Regina, William C. Kirby, F. Warren McFarlan, and Tracy Yuen Manty
May 2008

Setting up the goal to become one of the top 20 enterprises in the world dairy industry by 2010, the Inner Mongolia Yili Group had ambitious plans. As one of China's biggest national dairy companies, its main challenge was competing as a local company against joint-venture rivals who benefited from perks granted to "foreign" companies. To set itself apart, Yili focused on research and development and innovative ways to improve the industry. Proving that it could shift industry standards and lead a country not accustomed to dairy consumption, to a point where demand is outpacing supply, the Yili Group is making its mark to go global. As an Official Sponsor of the 2008 Olympic Games in Beijing and the Official dairy supplier of the games, it is betting that the brand can go further beyond China. Will the day that tykes from Topeka have a bottle of Yili milk in their hands be coming soon?

Fiyta-The Case of a Chinese Watch Company

Abrami, Regina, William C. Kirby, F. Warren McFarlan, Luc Wathieu, Gao Wang, Fei Li, and Tracy Yuen Manty
April 2008

Fiyta had long been one of China's foremost watch brands. However, as China's economy began to improve and the livelihood of many Chinese rose with it, their tastes began to change. Exposed to more luxurious foreign brands, many Chinese strived to purchase a Swiss or Japanese watch. How could Fiyta build up its brand image to a more sophisticated Chinese consumer? What marketing activities should it undertake to reinvigorate its brand? Is it meeting the needs of all segments of Chinese consumers? Should it?

China Netcom: Corporate Governance in China (A)

Abrami, Regina, William C. Kirby, F. Warren McFarlan, and Tracy Yuen Manty
April 2008

With its dual listings on the Hong Kong stock market and New York Stock Exchange, state-owned enterprise China Netcom was mandated to meet the listing requirements of these exchanges. From this initial step, China Netcom's Chairman, Zhang Chunjiang, began a program that sought to further develop the company's corporate governance practices to meet international corporate governance standards. The company hoped that its commitment in developing a globally-accepted governance structure would help the capital markets and potential investors understand that the company was a true, modern corporation, even with the state as a majority owner.

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2007

Will RacingThePlanet Ltd. Reach the Finish Line?

Isenberg, Dan, William C. Kirby
November 2007

Mary Gadams, founder and CEO of RacingThePlanet is facing one of the many logistical crises that her young Hong Kong-based venture faces as it stages its popular 4Deserts(tm) adventure marathon series in Atacama Chile, Gobi Desert Mongolia, Sahara Desert Egypt, and Antarctica. How can a small company in Hong Kong continue to effectively coordinate such a far-flung, complex, global operation?

Gome: Going Public

Jin, Li, Li Liao, Ruoran Guo, and Jielun Zhu
November 2007

Gome, China's largest electronics retailer, is plotting the best course to go public. Unlike many high-growth businesses in China, Gome has only moderate financing needs. Its charismatic and ambitious chairman Wong Kwongyu has built an expansive retail network in China and successfully used trade credits by suppliers and banks to make Gome a highly cash-generative business. The decision to go public has three inseparable components: why, where, and how. Does Gome really face substantial funding shortages for its operations? If so, are there any alternatives other than going public? If not, what are the other potential motivations to go public? Given these considerations, financial and otherwise, which stock market is the best one to list Gome's shares on? And between an IPO and a backdoor listing, which option suits Gome the best in terms of timing, costs, feasibility, and risks? Assuming Gome chooses to go public via a backdoor listing, what is the process.

Gome Electronics: Evolving the Business Model

Abrami, Regina, William C. Kirby, McFarlan, F. Warren, Gao Wang, Fei Li, Tracy Yuen Manty, and Wai Shun Lo
September 2007

After 20 years of expansion, Gome Electronics has become China's largest consumer electronics retailer. It has opened stores in almost every province in China, acquired some of its competitors, and went public in Hong Kong. However, it has begun to experience a slowdown in growth as sales per-square-meter have declined. The company is now being challenged to develop new ideas for growth, including experimenting with its product mix, renegotiating its relationships with suppliers, and developing new business models to maximize profitability.

China Merchants Bank

McFarlan, F. Warren, Chen Guoqing, Zhu Hengyuan, Bin Yang, Michael Shih-Ta Chen, Wai Shun Lo, and Yan Yang
August 2007

Founded in 1987, China Merchants Bank (CMB) is a pioneer in the use of technical innovation and IT as a competitive tool in the rapidly evolving Chinese banking sector. With a relatively small branch network when compared to its larger competitors, CMB uses an IT-driven strategy to introduce an "all-in-one" card, which integrates a suite of financial products to drive its personal banking business enabling CMB to be ranked 6th among China's commercial banks and 2nd among the other national commercial banks in terms of total assets as of June 2006. Underlying its excellence in personal banking is CMB's leadership in developing its credit card business. By April 2006, CMB had issued a total of over 5 million credit cards, capturing one-third of the Chinese credit card market. In September 2006, CMB's IPO in Hong Kong fetched about $2.4 billion and, given deregulation in the banking sector in China, CMB's President was presented with new challenges and opportunities concerning how such funds should be productively allocated to ensure CMB's competitiveness.

BYD Company, Ltd.

Huckman, Robert S., Alan D. MacCormack
July 2007

Considers whether BYD Co., Ltd., the largest Chinese maker of rechargeable batteries, should enter the Chinese automobile industry by acquiring Qinchuan Auto, a state-owned car manufacturer. Set just after BYD's initial public offering on the Hong Kong Stock Exchange in 2002, it describes the development of BYD's labor-intensive approach to battery manufacturing-an approach decidedly different from its more capital-intensive Japanese competitors and one that took advantage of the abundant supply of low-cost labor in China. Highlights the unique benefits and challenges created by BYD's operations strategy and asks students to determine whether the capabilities developed by the company in battery manufacturing can productively be applied to the automobile sector. Asks students to consider which, if any, aspects of BYD's operations constitute sources of sustainable competitive advantage for the company.

Chiaphua Group Vietnam

Retsinas, Nicolas P., and Michael Shih-Ta Chen
April 2007

As part of its expansion and diversification strategy, the Chiaphua Group explored real estate investments in emerging markets. The Group was one of the largest privately held company groups based in Hong Kong, with international investments in a variety of manufacturing and property development. A family member, Raymond Cheng, had narrowed the list of potential markets to Singapore, Malaysia, Indonesia, and Vietnam. Notwithstanding a history of instability and conflict and substantial government control of markets, Raymond concluded that Vietnam was the best option. Revolves around how to assess the market in the absence of hard data, and what would be the appropriate entry points. Illuminates how relationship-driven investments can be the foundation of a long-term investment strategy. Issues also involve how, by working with government through a structured forum (along with personal relations), laws and regulations can evolve to facilitate real estate investments.

WildChina (A)

Isenberg, Daniel J., and Shirley Spence
April 2007

WildChina (A) tells the story of Mei Zhang, a Chinese-born HBS alumna, and her pursuit of a dream: to share her passion for travel, her appreciation of China's beauty and culture, and her desire to start her own business. Describes the startup of WildChina, a tour company targeting a high-end clientele with unusual and high-quality products, and its survival of two business crises. The focus is on Zhang's decision to bring in a COO, transition him to CEO, and assume the position of Chairperson. Also describes communication and control challenges faced when Zhang moves to Los Angeles with her family, and tries to remain involved in her Beijing-based business. The decision Zhang faces is how to proceed when, in the midst of sales and operational problems and financial pressures, her CEO announces that he will be leaving the company in a matter of months.

Li Ning--Anything is Possible

Wathieu, Luc, Gao Wang, and Medha Samant
April 2007

A leading sporting goods company in China competes aggressively against global brands Nike and Adidas, with marketing strategies adapted to geographic segments. In the main cities, where competition takes place at a very conceptual level, Li Ning has chosen to adopt a very controversial "oriental theme" for its brand, while becoming at the same time a major sponsor of international athletes of the highest caliber.

The Challenges of Launching a Start-Up in China: Dorm99.com

Kirby, William C., F. Warren McFarlan, and Tracy Yuen Manty
March 2007

After graduating from Harvard Business School in June 2006, Ken Pao and Bill Li were ready to fully commit to the Internet start-up they had been working on since they first stepped foot on the business school campus. They moved to Beijing, rounded out their management team, received venture capital investment, developed joint-venture partnerships, and set key milestones to create a full-impact product launch for their social networking Web site catering to the college market. On the day of their launch, they faced a setback from China's Ministry of Education and were forced back to square one. Discusses the pluses and minuses of partnering with China's government ministries, the highs and lows of entrepreneurship, and the numerous opportunities available to entrepreneurship in China today.

Li & Fung 2006

McFarlan, F. Warren, William C. Kirby, and Tracy Yuen Manty
March 2007

Describes the opportunities and strategy facing one of the most innovative global supply-chain companies, and the strategy it has chosen to deal with the expanding demand for its services. Li & Fung links thousands of factories in India, China, and elsewhere to nearly a thousand large retailers, primarily in the U.S. and Europe. It basically does the supply-chain job faster and more accurately with the aid of a sophisticated information system than anyone else.

Li Ka-Shing

Bridget Gurtler, Nohria, Nitin
March 2007

From his humble beginnings in China as a teacher's son, a refugee, and later as a salesman, Li provides a lesson in integrity and adaptability. Through hard work, and a reputation for remaining true to his internal moral compass, he was able to build a business empire that includes: banking, construction, real estate, plastics, cellular phones, satellite television, cement production, retail outlets (pharmacies and supermarkets), hotels, domestic transportation (sky train), airports, electric power, steel production, ports, and shipping. Teaching Purpose: To examine leadership.

Li Ka-Shing and the Growth of Cheung Kong

Nohria, Nitin, Anthony J. Mayo, and Mark Benson
March 2007

Events in the history of Cheung Kong's growth reveal how Li Ka-Shing applied his skills as a "first-class noticer" to complex political and socioeconomic environments. While Li's determination to succeed is legendary, so are his skills in reading and responding to the policies and norms of the People's Republic of China, British colonial Hong Kong, and the post-World War II international system. Since Li became the taipan of Hutchison Whampoa in the late 1970s, he has adjusted his ownership shares in a vast portfolio of businesses--including ports, energy, real estate, retail, telecommunications, and new media. Illustrates how Li applied his business acumen and his ability as a first-class noticer to decisions about raising or lowering his stake in these businesses, and whether to acquire new ones. After starting Cheung Kong Inc. in 1950, at age 21, Li built upon his knowledge and contacts in the plastics industry to become Hong Kong's King of Plastic Flowers. In the 1960s, amid political turmoil and labor unrest on both the mainland and in colonial Hong Kong, Li purchased rights to properties on Hong Kong island that were selling at distressed rates. Li's successes in industry and real estate continued, and he cultivated contacts and built a strong reputation that set the stage for his purchase of the hong Hutchinson Whampoa, thereby becoming the first Chinese taipan. As taipan, Li reorganized and reallocated his various financial holdings in the 1980s and 1990s as conditions were in flux due to the Westernization of China after Deng Xiaoping succeeded Mao Zedong, and amid concerns about the transfer of Hong Kong from Britain back to China in 1997.

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