Cdg: Managing In China’s Economic Transformation Harvard Case Solution & Analysis

Cdg: Managing In China’s Economic Transformation Case Study Solution

Figure 1.3: Bulk Commodity Index (BCI)

Table 1.1: Bulk Commodity Index (BCI)

Current Issues:

Currently, China Data Group (CDG) wants to develop their products and markets by expanding it in United States and Japan for the purpose of reducing the costs of the products and by grabbing the global opportunity.

The main hurdle in the development of China Data Group (CDG) is the act done by its vice president (VC) of sales Mr. Ming Chen.

He bought a new cell phone for its potential client from company’s funding around the cost of one million United States dollars for the purpose to win the bid for China Data Group (CDG) and he got success in it but unfortunately some of the executive of the company passed the comments that what he had done to get the bid are totally wrong act and can badly hit the company’s image in future related to its professional quality services and said that this act is supporting to the personal connections rather than the professionalism and quality(Roy Y. J. Chua, 2010).

Samson Yuen, who is the chief operating officer of China Data Group (CDG) dialed the number of the company’s cofounder Mr. Roc Yang and told about the Mr. Chen and his team that they have gifted the 1 million United States dollars cell phone to one of its potential client for the purpose to win the potential bid for the company. This act is totally showing towards the development of its personal relationship rather than the professionalism and company’s quality of the services.

Samson Yuen said that this act is totally un-understandable that why Mr. Chen had done this because China Data Group (CDG) is the market leader and can win the bid on the basis of their professionalism and quality services.

He also said that China Data Group (CDG) do not need to offer such an expensive gift because these actions can harm the company’s reputation.

Possible Risks:

1. According to Mr. Samson Yuen, the chief operating officer (COO) of the company, the main risk is on the company’s brand and quality of services due to action done by the Mr. Chen, the vice president (VP) of sales department by gifting the 1 million United States dollars cell phone to one of its potential client which is the largest risk on the company’s reputation.
2. More of it, as it has been stated in above paragraphs that company is going to expand their business in United States and Japan where the gift system is considered as the company is offering the bribe. So the biggest challenge and the risk for the company is to understand the foreign culture where they are going to expand their business and needs to develop the strategy according to the needs and wants of country and its culture.
3. Another big risk for the company on its quality. By delivering small and large amount gifts to its existing and potential customers, the company’s executive are delivering the image in the market that the company is providing low quality services that is why they need bribes to attract and retain customers to buy their products.

Alternates for Solving the Current Issues:

Alternate 1:

Alternate one is reflecting the opportunity to hire the home talent for the purpose of getting the cultural advantage to globally expand its business. By and large, worldwide work can offer organizations special favorable circumstances regarding expanded efficiency, propelled language abilities, differing instructive foundations and the sky is the limit from there.

In case of Netflix, when it was extended to Amsterdam not long before, the organization applauded the city for authorizing Netflix to obtain trilingual and universally condemned of workers who can skil fully "get customers and societies in the majority of the domains crosswise over Europe."

In addition to this, widespread aptitude may likewise improve development yield esoteric an organization. In such cases when that is one inspiration behind why outside business sectors that welcome worldwide business people and gifted specialists regularly have denser and progressively effective start-up stratospheres.

Alternate 2:

In order to reduce per unit costs while expanding globally, company should establish the smooth relationship with local businesses by engaging them in different activities. In addition to this, a solid greater indicator by making a supporting environment of courtesy items and directions, which can come by means of foreigner influences.

These influences can strengthen the scrabbling of the association while limiting the money related threats.

1. Position collusion/accomplice/distributorship programs.
2. Build up a organic system technique and plot of action.
3. Manufacture an inner union group to administer and cultivate connections.

Spreading your business abroad isn't for the timid, yet for most organizations it will be inescapable as worldwide markets offer more remarkable open doors for expansion. By focusing on subtleties and re-appropriating authoritative capacities, the troublesome activity of "going worldwide" can create incredible outcomes.

Company’s Current Strategy:

Currently, company is following the exchange of gifts strategy which is common in Chinese market and competitors are following these exchange of gifts strategy more than the China Data Group (CDG) Company Limited is doing with their existing and potential clients to attract them for the purpose of making purchases.

Recommendations:

As the major changes facing by the Chinese market, company should expand globally but make sure that their plans must be full proof against the global culture. For this purpose, company should hire some local managers to run their business in United States and Japan due to attract more customers in less time and deliver their services in best way through their own cultural style.

The act done by Mr. Chen is not bad or wrong but it is only acceptable in Chinese market not in other countries, so, company should made different plans and strategies for different countries for the purpose of smoothly running the business in different cultures at the same time and maintain good customer relationship and delivering good quality services by showing professionalism..............

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