Strategic merge: a gain or a gamble – the case of Telco China
Publication date: 13 July 2019
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.
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.
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CSS 11: Strategy.
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.
Li, W.S. (2019), "Strategic merge: a gain or a gamble – the case of Telco China", , Vol. 9 No. 2. https://doi.org/10.1108/EEMCS-07-2018-0165
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