Harvard Business Review Business Case Brief Guidelines There are typically no right or wrong answers for a case, and unanimous decisions in a class are atypical, which provides for interesting and active sharing of concepts and ideas. However, the approach taken to address the issue(s) outlined in each case and the strength of the analysis you provide is very important. The more thoroughly you read and analyze a case the more prepared you will be for discussion and the more you will learn. A case analysis should comprise the following components: ● Problem specification for the organization after examination of the important opportunities and/or threats facing the firm ● Outlining of the available alternatives to resolve the organization’s problem, along with the pros and cons of each. ● Provide your recommendation of the preferred alternative solution based on your careful analysis, along with your reasons why you are making the recommendation. Cases will differ in complications and challenges as well as in available data, however, some factors to consider will be competitive analysis, customer buying habits, target audience characteristics, customer satisfaction, price position, supply chain performance, product performance, sales force capabilities, etc. The case write-up should contain the identification of the main decision problem, alternatives with pros and cons, the chosen course of action and justification for the same. It usually helps to include supporting quantitative analysis where applicable. It is also helpful to use subheads and prioritize the more important considerations. Please limit the case brief to no more than 2-4 pages, 12 point font, 1.5 line spaced, 1 inch margins. If you choose to include appendices, they should only include supplementary data and analysis, not case data provided in the case itself.
Problem Specification
1436 is the first pure Chinese luxury fashion brand, competing with numerous international companies in the industry. Under its CEO, Jane Wang’s leadership, the brand is geared towards the international market after conquering China, but a debate ensues regarding whether 1436 is ready to internationalize. The leadership debates about whether to remain in China and become stronger before moving abroad, conquer Asia before the world, or internationalize to compete in the global market, including the West. Although the CEO appears sure about many aspects of the business, such as the current growth and market position, the decision to become global appears problematic as she considers the need to be careful and sure about the strategic direction. The CEO and some of its leaders are unsure about competing in the global market presently or strengthening the company before beginning global operations. While the decision might appear straightforward, it is challenging and the management should consider the three strategic options, remaining in China, focusing on Asia, or going global, as well as their pros and cons before the final decision.
Strategic Options
Remaining in China
One of the strategic options for 1436 is to remain in China and strengthen the brand further before internationalizing. Remaining in China will help Jane to build a brand that will stand the test of time and a strong foundation that will succeed in China and globally. While 1436 has grown to compete with global luxury brands, it needs time to establish itself locally before going global. Furthermore, the management needs time to make a careful decision and create mechanisms to support the global strategy, such as a new organizational structure. The brand will also have the chance to benefit from the Chinese market, growing economy, and the increasing middle class consumers. The Chinese market offers a significant opportunity for 1436 to grow before going global. However, the decision to remain local means that the company will lose the chance to enjoy the global market and the chance to be the first Chinese luxury fashion brand in the global market. The company will also retain the current market share, limiting the firm’s revenue and image. The management will also fail to learn from other brands and companies by restricting its operations to the local market.
Leveraging the brand in Asia
Before moving abroad, the company should consider neighboring countries to test the waters. The firm can operate in Japan and Korea among other Asian countries then move further abroad. The decision will involve less capital investment than moving further to regions, such as Europe. Besides, it will provide the opportunity for the company to determine its readiness to explore other markets outside China. The decision to focus on Asia before other global markets aligns with the management’s strategic move to strengthen the brand before going global. However, the decision has some drawback, such as the fact that expanding in Asia is not very different from operating in China due to similarities in consumer needs and culture. Thus, the company will not have the experience of a truly global market by focusing on Asia instead of moving to western markets.
Going Global
Some 1436 leaders feel that the luxury brand is ready to internationalize. In fact, Jane feels like the company has the resources and expertise necessary to compete in the global market, even with western luxury brands. Besides, the company will enjoy numerous benefits of going global. First, the Erdos brand has a global reputation, which will sell 1436 to the global audience. Secondly, through internationalization, the company will have the benefit of a large consumer base and take advantages of economies of scale to improve its revenue and competitiveness. Lastly, going global will increase its market share and appeal to more consumers to achieve long-term success. However, the management should consider possible drawbacks of going global, such as the possibility that the brand is not yet ready for the global market. While the Erdos brand has a global reputation, 1436 should stand on its own before going global. Furthermore, the decision involves a huge capital investment without any certainty of returns on investment. The decision is hasty and might cost the company a considerable loss if the brand fails to succeed in the global marketplace.
Recommendation for the Most Preferred Alternative
The most preferred alternative strategic decision for 1436 is to remain in China and go global later. While the decision to expand globally is appealing, the brand is not prepared to internationalize and will require time to prepare as it grows. The growing Chinese economy and expansion of the middle class provides a chance for the brand to grow and become financially stable to compete with global brands. The Chinese market has witnessed a change in consumers’ mindset and preference for luxury products. Hence, the local market provides the chance for 1436 to create a strong foundation and plan strategically to become global. Thus, instead of rushing without a clear strategic plan, Jane and her management should remain in China as they strategize and prepare the brand for the global market.
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