YC Company: decreasing profit margin in overseas market

Abstract

Subject area

Strategic management.

Study level/applicability

This case is suitable for graduate students, postgraduate students and MBAs.

Case overview

YC Company is a foreign trade SME operating in the lighting fixtures export business in Ningbo City, a major outdoor lighting products manufacturing base in mainland China. Established by Li Lele in 2008, the sales revenue and gross profit of YC Company have been increasing every year, reaching $ 4.06 million and ¥ 1.00 million, respectively, by the end of 2011. However, the growth rate of profit lagged far behind the growth of sales revenue. If this situation were not controlled, YC Company would hardly survive in this increasingly competitive market. Li Lele, the CEO of the company, was trying to find a way to enlarge the profit margin.

Expected learning outcomes

This case lets students learn more about strategic management. Students are expected to learn: how to precisely identify and map a problem; and how to select a better solution by analyzing the context and using some strategic analysis tools, such as Porter's Five Power, Smile Curve, SWOT. In the learning process, students are expected to acquire a better knowledge of some strategic management theory/method, international business, the condition of small and medium trading companies in China.

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.

Citation

Jun, Z., Yingrui, H., Lele, L. and Greeven, M.J. (2013), "YC Company: decreasing profit margin in overseas market", , Vol. 3 No. 1. https://doi.org/10.1108/EEMCS-12-2012-0214