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Published by: Asia Case Research Centre, The University of Hong Kong
Published in: 2005
Length: 19 pages
Data source: Field research

Abstract

At the dawn of the 20th anniversary of its involvement in China’s passenger-car industry, Shanghai Volkswagen (SVW) found itself caught in changed external and internal environments, with factors critical to its past success gone or quickly diminishing. This is a management strategy case primarily concerned with first-mover advantages and disadvantages in global expansion, especially into emerging markets, and strategic change and repositioning. While taking first-mover’s risks has rewarded Volkswagen with a dominant market position and high profitability, it is possible that such dominance and profitability will not be sustained in the long run as the competitive landscape transforms. The test is whether SVW can quickly adapt to the new environments and establish a new set of competitive advantages that will position it favourably against its rivals. The case also sheds light on other globalisation issues including localisation versus technology transfer, local partnership and governmental relations, and the effect of local industry policies on corporate performance and strategies.
Location:
Other setting(s):
2004

About

Abstract

At the dawn of the 20th anniversary of its involvement in China’s passenger-car industry, Shanghai Volkswagen (SVW) found itself caught in changed external and internal environments, with factors critical to its past success gone or quickly diminishing. This is a management strategy case primarily concerned with first-mover advantages and disadvantages in global expansion, especially into emerging markets, and strategic change and repositioning. While taking first-mover’s risks has rewarded Volkswagen with a dominant market position and high profitability, it is possible that such dominance and profitability will not be sustained in the long run as the competitive landscape transforms. The test is whether SVW can quickly adapt to the new environments and establish a new set of competitive advantages that will position it favourably against its rivals. The case also sheds light on other globalisation issues including localisation versus technology transfer, local partnership and governmental relations, and the effect of local industry policies on corporate performance and strategies.

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Location:
Other setting(s):
2004

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