1. Understand how the corporate lifecycle could trigger a necessity of making a tough decision to develop new business ventures based on the corporate lifecycle theory; and how changes in the external environment could hasten such a decision.
2. Analyze how a company can leverage its internal organizational structure to share and utilize cross-departmental resources and capabilities to support new venture businesses according to the synergy effect perspective.
3. Undertake a resource-based view analysis to evaluate the external and internal resources needed for corporate new venture development.
4. Identify the best course of action for the decision-maker by comparing, contrasting, applying and evaluating the two different models of corporate new venture development in the e-commerce business: the centralized organizational model and the decentralized organizational model and evaluate the pros and cons associated with each mode in the context of Dahan’s external and internal environments.
Since its inception in 2003, Dahan’s traditional business in SMS (Short Message Services) and data had gained thousands of customers across China and won top rankings in the industry. Despite its achievements, Dahan encountered difficulties when it entered the new e-commerce market, as the domain knowledge about the new business was very different from the domain knowledge in its traditional business. Furthermore, the emerging B2B e-commerce industry was very different from the traditional business in that the former mainly targeted corporate clients and the latter targeted individual customers in the B2C industry. This case examined the critical decisions that Xiaofen Huang, the CEO of Dahan E-Commerce Corporation and Co-Founder of Dahan Tricom Group, had to make and external, especially Internal, resources the Dahan Group needed in developing its new venture.
Specifically, this case explored how Huang would go through the mental process to make the best possible decision to help the company not only to survive, but also thrive in the rapidly-changing and competitive digital environment: it urgently needed to finalize an organizational incubation model to support the further development of its e-commerce and future new venture activities with two options to choose from: the centralized organizational model or the decentralized organizational model. A key challenge facing Huang was to decide which option was best suited to motivate salespeople in different departments to help one another, especially in the new B2B e-commerce business and to grow that new business.
In the case, Dahan’s growth aspirations and its motivation to transform its traditional business into a new e-commerce business were discussed. Second, when external challenges were examined, how Dahan explored the B2B e-commerce business using a trial-and-error learning process was explained. Third, when internal challenges were examined, how Dahan incubated its new B2B e-commerce business and its practices for leveraging and sharing resources/capabilities, as well as cross-departmental and cross-divisional collaboration through a resource-based lens, were illustrated. Last, the most critical learning in the case presented an immediate decision-making dilemma on which organizational incubation models to choose from for further new business development, where students learn to analyze both external and internal factors and consider Dahan’s available resource and founder’s aspiration, available strategic options to derive a best possible decision to suit the stage of the company’s lifecycle and founders’ vision.
Complexity academic level
This case was designed for use in undergraduate courses on corporate innovation, new venture development, corporate innovation, corporate entrepreneurship, e-commerce and growth.
Teaching notes are available for educators only.
CSS 11: Strategy.
The authors wish to thank Dr Michael Goldman, the Editor-in-Chief, Dr Kerryn Krige, the Associate Editor, and anonymous reviewers for their constructive feedback. We gratefully acknowledge the funding from the University of San Francisco’s Center for Business Studies and Innovation in Asia-Pacific, the Humanities and Social Sciences Research Project of the Ministry of Education (Project No. 22YJC630168), the Natural Science Foundation of Zhejiang Province (Project No. LQ22G020007) and the Teaching Reform Project of Zhejiang University of Technology (Project No. JG2022044). The authors especially wish to thank Huang and her team for their collaboration in developing this case. We also wish to thank Dr Anne Chapple for her impeccable professional editing.
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.
Xie, Z., Chen, R.R., Wei, W., Yang, X. and Huang, Q. (2022), "Corporate new venture development at Dahan Tricom: the case of a new B2B e-commerce business", , Vol. 12 No. 4. https://doi.org/10.1108/EEMCS-11-2022-0415
Emerald Publishing Limited
Copyright © 2022, Emerald Publishing Limited