Strategic merge: a gain or a gamble – the case of Telco China

Wing Sun Li (DBM, United International College, Zhuhai, China)

Emerald Emerging Markets Case Studies

ISSN: 2045-0621

Publication date: 13 July 2019

Abstract

Learning outcomes

By reviewing the case study, readers are expected to understand the constraints of competitive strategies in a shifting environmental landscape; the difficulties of foreign companies to sustain in an emerging market with government interventions; the subtlety of joint venture (JV) formation by partners with very divergent background, priority and agenda; evaluation of behavioural orientations of partnership and JV operational arrangements as determinants of a successful JV strategy.

Case overview/synopsis

High-tech companies can enjoy super profits from their products when only a few competitors can compete with them technologically. However, these companies also nurture a high-cost operational culture that sets a constraint for their further growth when superiority of the technology can no longer be maintained. High-tech companies may reposition their businesses with a strategic shift from differentiation strategy to cost focus strategy. The attendant shift as well as synchronization problem in an organization may require a larger effort to revamp. This case describes a global telecom infrastructure company with successful business performance in China in her early establishment with a pre-emptive technological edge. Mitigation of technological superiority and the rise of local competitors have forced the Company to opt for a cooperative strategy with a local player in the establishment of a low-cost joint venture. Does the new joint venture facilitate the strategic shift or just create an illusion of cooperation?

Complexity academic level

Undergraduate students and post graduate students taking strategic management course.

Supplementary materials

Teaching Notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

Subject code

CSS 11: Strategy.

Keywords

Acknowledgements

Disclaimer. This case is written solely for educational purposes and is not intended to represent successful or unsuccessful managerial decision making. The authors may have disguised names; financial and other recognizable information to protect confidentiality.

Citation

Li, W.S. (2019), "Strategic merge: a gain or a gamble – the case of Telco China", Emerald Emerging Markets Case Studies, Vol. 9 No. 2. https://doi.org/10.1108/EEMCS-07-2018-0165

Publisher

:

Emerald Publishing Limited

Copyright © 2019, Emerald Publishing Limited

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