Less than 10 years after its founding, the Chinese start-up BYD (Build Your Dreams) had become one of the world’s largest battery producers. In 2003, BYD diversified into automobile manufacturing with the idea of becoming a leading producer of electric cars. Warren Buffett became a large outside shareholder, and Daimler a joint venture partner in a specialized subsidiary. By November 2010, BYD had become a more diversified, profitable firm employing 180,000 people and producing, among other products, more than 500,000 cars. But there were more and more signs that things were not going as well as expected, raising questions about BYD’s competitive advantage and its sustainability. Was the goal of its founder Wang Chuanfu just a pipe dream? Or were his investments in electric cars and other alternative energy projects just too early for the market?
Keyword
Innovation
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New Energy
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Competitive Advantage
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Multinational Corporation (MNC)
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Intellectual Property
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Build Your Dream(BYD)
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Electric Car/E-Vehicle
Greatview nurtured a dream of becoming the world leader in liquid food packaging within 20 years. After listing on the Hong Kong Stock Exchange on December 9, 2010, the company began to contemplate overseas expansion. Many European potential clients began to pursue cooperation with Greatview. Meanwhile, it also built a factory in Germany to compete in western Europe, which accounted for one-third of the global aseptic packaging market. The company also faced great challenges, including a lawsuit alleging patent infringement filed by Tetra Pak in July 2010, as well as possible harm from price competition due to higher production costs in its European plant versus its domestic plants. Greatview needed to re-consider its globalization strategy.
Keyword
Aseptic Packaging Industry
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Market Competition
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Patent Infringement
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Survival of New Start-Ups
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Globalization
In 2003, a group of spin-offs from Tetra Pak launched Greatview, a company that provides liquid aseptic packaging materials and related services. The company was founded by Chairman Hong Gang and Bi Hua, both former executives of Tetra Pak. They successfully organized a well-experienced team and founded a factory willing to be run by them under a Trustee agreement. Then the real challenge came — the competition with their former employer Tetra Pak, which dominated 95% of the market share in China. Would the team of middle-aged entrepreneurs be able to win market share from Tetra Pak, or would Greatview end up being bought by Tetra Pak, as numerous other market challengers had been? How Greatview could survive in the market was the challenge that faced these entrepreneurs.
Keyword
Aseptic Packaging Industry
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Market Competition
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Patent Infringement
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Survival of New Start-Ups
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Globalization
Facing strong competitors, Greatview struggled to survive. The company placed its focus on small customers and managed to lower production costs. The Chinese dairy market saw a boom in 2005, and Greatview, with a capital injection from PE firms, seized its opportunity to grow before Tetra Pak’s capacity could catch up with the market growth. Greatview’s real break came when it won an anti-trust lawsuit that forced the Tetra Pak–dominated market to open. By 2009 Greatview had become the second largest roll-fed supplier of aseptic packaging in China. How could Greatview achieve sustainable growth? The company would need to steer clear of a mine field of IPR lawsuits and heavily invest in R&D. There was another question to be addressed: facing its global competitor, Tetra Pak, should Greatview pursue globalization as well?
Keyword
Aseptic Packaging Industry
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Globalization
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Market Competition
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Patent Infringement
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Survival of New Start-Ups