Lecture

1
Lecture 18 Class Discussion CP Group Case

• Reading 1. Case CP Group (on reserve)
• 2. Case summary and preparation questions
• (on web)
• Key activities of the class
• 1. Group presentation of the case (Soft copy
  due)
  
• 2. Class case discussion (summary, update,
  lessons learnt)
  
• 3. Written group reports due

2
Getting in TrimOver the past year, C.P. Group
has

• Sold Ek Chor China Motorcycles 50 share in a
  Shanghai motorcycle factory
  
• Sold a majority stake in Lotus Supercentre, a
  Thai warehouse-store chain, to Britains Tesco
  
• Sold 11 of its 7-Eleven operations to
  Singapores Government Investment Corp.

3
Getting in TrimOver the past year, C.P. Group
has

• Sold TelecomAsias minority stake in Apstar, a
  Chinese satellite operator
  
• Sold 19 million worth of shares in Kopin Corp.,
  a hi-tech electronic research and development
  firm in Boston
  
• Sold shares in a Shanghai brewery to its Dutch
  partner, Heineken

4
Getting in TrimOver the past year, C.P. Group
has

• Expressed interest in selling Sunnys
  Supermarket, Vinythai and Petroasia, and in
  finding a foreign partner for its insurance
  businesses.
• Closed several TelecomAsia subsidiaries,
  including a paging unit, equipment distributor
  and software consultancy

5
Past Success of Overseas Chinese Businesses
Circumstances Make Heroes

• Favorable Environment
• Booming regional expansion
• Limited competition (local and foreign)
• Large export markets
• Favorable government policies

• Strategies
• Flexibility/entrepreneurship
• Networking
• Selection of industries (e.g., local industries,
  proportionally limited competition)
  
• Conglomeration

• Success
• Growth
• Asset accumulation

• Useful Chinese Traits
• Drive to succeed
• Insecurity
• Family
• Thrift

6
Established Business Formulas Are No Longer
Adequate to Sustain Success Reasons for Pessimism

• Increasingly Unfavorable External Environment
• Intensified global and local competition
• Unfavorable local environment
• Limited export growth

• Challenges/Problems
• Lack of strategic thinking
• Unrelated businesses
• Lack of positioning in global industries
• Lack of growth drivers (technology, brand name,
  etc.)
  
• Lack of professional management
• Succession problem

• Sustained Success

• Problematic Chinese Traits
• Distrust of non-family
• Hierarchical management style
• Lack of drive among younger generations

7
In Search of a Chinese Management Style Real
Heroes Can Stand the Test of Time

• Needs for Change
• Build a competitive organization with
• professional management team
• clear strategic focus
• invest in growth drivers
• Leveraging unique capabilities
• flexibility
• networking/alliance competence
• entrepreneurial drive

Intensified Competition

• Sustained Success

Professionally Prepared Younger Generation O
wners