Key Problem

Qianjiang Group was having problems after obtaining
Benelli. Originally,
things were working out smoothly but as time went by, QJ began facing many difficulties
especially cultural difference. Also, Chinese companies have various ways of conducting
business compared to Italian companies. QJ also had competition with Japanese
companies within Europe.

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Analysis (Boston
Matrix)

In regard to the Boston matrix, products are allied
with: question marks, stars, dogs and cash cows in terms of the market share
and market growth. The collection of products that were evaluated comprised of:
scooters, motorcycles, off road, parts and accessories.

After the merge and acquisition, scooters ceased to be
distributed in China. This was because they lacked competitive advantage when
it came to pricing and therefore, are considered as dogs. Marked share and
market growth are low hence, profit is not high. The production of these
products in the Chinese market should be halted, so as to enable the company to
restructure their product lines to other various models that can end up
becoming stars or cows.

Furthermore, when the merger was concluded, they
restructured the making of scooters: they mapped out the models in Italy and manufactured
the scooters back home in China by QJ. After this process, the scooters were shipped
to Italy with Benelli’s brand. Using this tactic makes them stars. This is due
to the fact that, the merged firm introduces rebranded models at lower prices
and hence, increases its market share and market growth.

Also, in the year 2009 the manufacturing of scooters
was to be increased seven times due to market trends. Therefore, the mapped-out
designs and the models were transferred abroad. They then attained a lot of
competitory advantage after the knowledge transfer. This kind of situation enables
them to be considered as cash cow because of their good result. Cash investments
were made in so as to help with further development. The Chinese therefore
decided to begin production in house which lead them to enter into an agreement
with the local professional and schools to provide a space for students with
proper education. This help them lower manufacturing cost and also, to decrease
prices on the market. After they are capable of obtaining more market share,
they can effortlessly attain the title stars in the future.

Lastly, there is no classification that would suit the
question mark products. This is because both brands are dominant and trend
setters in both countries. Also, both companies continued to progress in the
segments they produced in with competitive advantage although they did not
enter into the foreign markets after the acquisition.

 

 

Options

1:
Specialize
each part for each segment: Since the Chinese are low quality oriented, and the
Italians have distinctive taste in terms of quality and comfort; this option
provides an opportunity for the Italians to make the design for the product and
establish the trends of the market and provide explicit instructions on how a
product should be made. Also, the Chinese will be in charge of the labour with
the requirement written using the Italian understanding. After each part has
been fulfilled in the required segment, they will then assemble the parts and
sell them using the Italian brand which is recognized by buyers as exceptional.

2:
Develop
two lines of products: The distinction in both cultures in regard to product
understanding: Chinese buyers are more focused on price. Also, an advantage is
that they are a big market with a strong buying potential. The downside to this
is the fact that these Chinese only want to buy low price products that meets
their needs. Furthermore, Italian’s on the other hand look for style and
quality when purchasing an item. Hence, developing two product lines of one
been low cost products that would fit the Chinese tastes and unique designed
vehicles for Italians will help close the gap of difference in culture. Although
the want to satisfy both countries, their approach in regard to the
motorcycles/scooters should remain the same because both lines would be sold in
both markets.

3: Combine both
countries knowledge: Since the
merger had a lot of technical issues attached to it, creating delays in
delivering products in the long-term; this option can enable both companies
have a common ground. By combining both countries knowledge through a workshop
and creating certain speciality for the workers on both sides, they will be
able to adjust an re-organise themselves and their skills so as to cooperate
with another as a team. This will definitely help them grow together and also
close the barrier in terms of culture between them. They will be able to adapt
to one another culture so as to create a good working force.

 

Recommendation

The criteria I used was writing done the benefit of
each option and then making my judgement based on the one which will be
beneficial to both countries equally. Therefore, with reference to my analysis
and options, I suggest option 2. If they are able to develop two product lines,
then it gives them the opportunity to learn each other’s culture. It will also
enable them to stick to the organization structure but develop upon a few
things when it comes to producing vehicles for a different country. Therefore,
they will be using the same organization structure throughout but change a few
things in order to suit the other parties taste and preference. This brings
about collaboration and team work since each party wants to make sure they
exceed the buyers’ expectation and meet requirements. Also, it will enable them
to attain competitive advantage over their counterpart thus, the Japanese
companies with Europe.

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