Strategic Management Case Study: Geely And Volvo

Case Study on Geely and Volvo

International American University

Aashish Gautam

MGT 590: Strategic Management

Shashwat Dhakal

APRIL 25, 2016

Brief Overview

The automobile industry of China has grown drastically over the past decades. From producing 2 million vehicles in 1990, the production increased to around 9.5 million in 2008. Due to this huge number of prospect buyers of vehicles have grown in China.

The financial crisis in the world was triggered due to the failure in insurance and banking companies poor decisions on lending on US real estate that turned to crisis. This led to recession in world 's economy and reduced the consumer 's consumption behavior dramatically. Chrysler and GM which were in world top automobile industry

The founder Li Shu Fu is rather an ambitious person. Instead of belonging to a little farmer 's family, he always dreamt of becoming someone big and used to be involved in lots of small businesses. He started his automobile company, Geely from the year 2001 and targeted the masses of China. But as there were more than 50 domestic and foreign automotive brands, the competition was really fierce. Due to that, Geely only managed to have 2.5% share of the total Chinese market (GEELY). SO, Geely needs to start focus on overhaul and differentiate its products from others in order to have better coverage. In spite of its ambition of international expand, they have faced various issues and they

First of all the government of China must be liberal and welcome all the foreign investors with a better terms and conditions and Geely could also use a special task group for watching out the operations and business environment in China that would directly report to Volvo, ensuring the Volvo 's autonomy in the market.

Lastly, as both of them have differences and come from business environment unlike each other they both need to understand that they need the hands of one another to survive and succeed in the market. It is true that the failure risk is high, but always remember higher the risk higher the reward. Thus, to achieve higher reward they need to work collaboratively with each other putting their differences aside and create an environment of sharing and learning. So, if they work accordingly and succeed in the global market it would be the biggest and the most accomplished victory of China in terms of the