Negotiation in China: How Universal Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Negotiation in China: How Universal?

Q.1 what strategy would YOU suggest to Universal Studios in terms of negotiating with the Chinese Central Government?

Solution No.1

Universal Studios should carry out environment screening in China prior to devise any strategy for its operations. PEST analysis is one of the tool that can guide the company to evaluate the macro-environmental factors that are directly/indirectly related to the operations. It will assist the universal studio significantly in making strategic evaluation of the investment that has to be made in Chinese market.

PEST Analysis

Political Factors

The People’s Republic of China party ruled by the Communist Party of China. As far as tariffs are concerned, they are usually high.The political government of the People’s Republic of China is stable and attracts the foreign investors. It is divided into 23 provinces, five independent regions, and four municipalities.

Economic Factors

Chinese economic growth mostly financed by debt, particularly banks. Gross domestic product (GDP) of China is $ 17.632 trillion as per the estimates and forecasts for 2014. The GDP growth rate is around 9.5 percent, GDP per capita is $ 12,893, the unemployment rate is about 4.1 percent, and the inflation rate is2.7 percent.

Social Factors

The majority of the composition of the people in the China encompasses Chinese, i.e., every fifth person in the country is Chinese. The population of the country is 1,350,695,000, itspopulation is four times than that of the US.There is an increase in industrialization and urbanization in China that attracts the investors to become a stakeholder for the country. People in China are hardworking and keen to work, that is the reason there is a huge percentage of the working class at different age groups.As far as the government of the China is concerned, various corrupt government officials penetrating the investors and causes social unrest in the region.

Technological Factors

The people in China are profoundof technology and are highly adaptive with the changing technology.More than 500 million internet users exist in the country. Broadcast subscribers in the China serve more than 55 million broadband subscribers. Technology is cheaper in the China and the telephone system in one of the world’s number one.

Discussion

By understanding the above factors, Universal Studios will be able to better communicate with the Chinese government. Apart from practicing PEST analysis, Universal Studios have to ensure that there will be an industrialization in the country, they will provide ample employment opportunities for the Chinese people as well. Universal Studios will also ensure the Chinese government that the entertainment and leisure industry in the country will be benefited a lot after the creation of a theme park. Universal Studios will attract the Chinese government by indicating that there will be a boost in the technology in the long term that will be favorable for the country. Universal Studios should be able to communicate the advantages of investment to the Chinese government in a positive manner. Some of the other factors that Universal Studios needs to communicate to the Chinese government are as follows:

Investment in the country will stimulate the economic growth and promote industrialization and facilitate the labor force.
Rate of employment in the country will be raised.
There will be a transfer of resources and technologiesthat facilitate the country in the long run.
Foreign direct investment will be effective and boost the domestic markets as well.
It also decreases the cost of production because Chinese labor market is already cheap.

Q.2 Comment generally, what would be YOUR suggestions in terms of: park location, ownership structure,and park size, nature of theme zones, local employment and related hospitality training.

Solution No.2

Universal Studios should opt a location near Shanghai Happy Valley or Shanghai Ocean Aquarium to attract the large number of audience. As far as ownership structure is concerned, Universal Studios should make an agreement with the local firms in order to better understand the infrastructure. By approaching the local firm, Universal Studios will be able to better design the policies. It will assist in purchasing raw materials, understanding government legislationsand trade policies. The Park size should be around 12,000 to 13,000 hectares just like the Shanghai Disney Land.The Park should offer the facilities including hotels and restaurants, gaming, etc.

Transportation facility should also be provided to the people to make it convenient to visit the park. Emergency services also will be beneficial for the people, Park should offer all the required services in case of any mishap. Global expansion will favor the domestic employment and contributes to the GDP as well. Local employment will be benefited from it and Chinese people will get various employment opportunities.The Park should offer better customer services.....................

This is just a sample partial case solution. Please place the order on the website to order your own originally done case solution.

This is a fictitious case in which the universal studies, the main theme parks and resorts in the U.S. company must negotiate with the central government of China to build its first theme park in the country. Students are divided into groups, and each student is assigned a role as one of the negotiators, or as an observer. Topics covered in the negotiations include the location of the new theme park, in the ownership structure, size, nature of the topic areas, workplaces and hospitality training programs. The case allows students to experience the difficulties of negotiating in a cross-cultural environment. "Hide
by Tao Zhigang, Shangjin Wei, Penelope Chan Source: University of Hong Kong, 20 pages. Publication Date: July 20, 2011. Prod. #: HKU956-PDF-ENG