ln today's fast moving and globalized world, international expansion plays an incredibly crucial role for companies.
The reasons for internationalization can be quite different: Saturated domestic markets, a high number of competitors, diversification, revenue opportunities, economies of scale and so on. However, these reasons all have one thing in common. lt is about growing the company by expanding the business field. Because in times of globalization, those who do not learn and grow will not stand still but fall behind.
This report examines the international business management of the Chinese company SANY, which mainly operates in the global construction market.
To do so, chapter two provides a brief overview of the company and its milestones in internationalization. After the presentation the used business models, it comes to the interesting part of SANY's value creation both internally as well as in the foreign markets. The main and ending part of the paper is focusing on recommendations to achieve three main targets in the future, which includes growth, technology as well as ethics and culture.
Table of Contents
1. Introduction
2. SANY´s background
2.1. Main Figures
2.2. Internationalization milestones
3. Business model
4. Value creation
4.1. Internal value creation
4.2. Value creation abroad
4.2.1. Service
4.2.2. Value Creation through Putzmeister Acquisition
4.2.3. VRIO model
5. Recommendations
5.1. Growth and further value creation
5.2. Increase benefits of both, customer and SANY, through technology
5.3. To be a better global corporate citizen
6. Conclusion
Aims and Topics
This case study examines the international business management of Chinese construction equipment company SANY. It considers how the company has expanded internationally and created value at home and abroad, before presenting recommendations concerning growth, technology and corporate citizenship.
- Internationalization milestones and market entry
- Direct sales and distributor-based business models
- Internal value creation and customer service
- The acquisition of Putzmeister
- Technology and future growth opportunities
- Ethics, values and corporate culture
Excerpt from the Book
Business model
Having looked at the company's background, it is now time to examine SANY's business models. In general, the company uses two different business models, which are shown in the chart below.
As can be seen in the chart, SANY's two business models are licensing and direct sales to end customers. However, this has not always been the case. The key here is SANY's adaptability to market developments.
In the very beginning, SANY only sold directly to customers and also began exporting abroad. Over the years, market demand changed more to a rental concept. For example, in 2000, more than 30 percent of SANY's customers were construction companies, and more than 50 percent of them owned their equipment, meaning they bought it directly from SANY. Nowadays, companies prefer to rent the equipment instead of buying the equipment, which leads to a huge shift in SANY's business models. Nowadays, the second business model through dealers and rental companies accounts for more than 80 percent of sales (Lal, R., Lippert, S., Hua Dai, N. and Deng, D., 2013, p.8).
Distributors and rental companies have been integrated into the sales channel to ease the liquidity burden on the organization. This is because the distributor still pays SANY in the forms of a one-time payment (Lal, R., Lippert, S., Hua Dai, N. and Deng, D., 2013, p.8).
To dive deeper into the business model of SANY, the following presents its business model canvas. This tool gives a quick but very precise overview of the company.
According to the Business Model Canvas, it is important to highlight some key points to know for what follows.
SANY's main activities are very related to its value creation, namely revenue generation, very good research and development processes, internationalization process, and after-sales support. These activities also represent the main revenue cost structure, which is listed on the left side at the bottom of the canvas. Through the excellent after-sales service, SANY is in very close relationship with its customers, which are mainly the distributors and the end customers. The part of value proposition is part of the next chapter “Value creation” (Lal, R., Lippert, S., Hua Dai, N. and Deng, D., 2013, p.6-7).
Chapter Summaries
1. Introduction: Introduces international expansion and outlines the case study’s focus on SANY’s business management and value creation.
2. SANY´s background: Presents company figures and major milestones in SANY’s international expansion.
3. Business model: Examines direct sales and the distribution and rental channel, using a business model canvas to organize the analysis.
4. Value creation: Examines internal activities and value creation abroad, including service and the Putzmeister acquisition. It also applies the VRIO model.
5. Recommendations: Addresses growth and value creation, technology, and global corporate citizenship.
6. Conclusion: Brings together the discussion of internationalization, value creation and investment strategies.
Keywords
SANY, international business management, internationalization, construction equipment, business model canvas, value creation, Porter’s value chain, VRIO model, Putzmeister, foreign direct investment, customer service, technology, corporate citizenship
Frequently Asked Questions
What is this work about?
It is a case study of SANY’s international business management and value creation.
What are its central topics?
The discussion covers international expansion, business models, customer service, acquisitions, technology and corporate citizenship.
What is the primary aim of the study?
The study examines SANY’s international management and value creation, then develops recommendations for its future activities.
What method does the author use?
The author conducts a case-based analysis drawing on published sources and uses the business model canvas, Porter’s value chain and the VRIO model.
What does the main analysis examine?
It examines SANY’s business models and internal and international value creation, including service activities and the Putzmeister acquisition.
Which keywords characterize the work?
Key terms include internationalization, value creation, business models, foreign direct investment, customer service and corporate citizenship.
Why is Putzmeister discussed?
The acquisition of the German company serves as a specific example of SANY’s foreign direct investment and its relationship to value creation.
How does the study address technology?
It considers technology in product development, production, equipment use and after-sales service.
What does corporate citizenship mean in this discussion?
The author organizes the discussion around ethics, values and culture, including working conditions, environmental awareness and respect for local cultures.
- Citation du texte
- Jakob Scheidel (Auteur), 2021, International Business Management. Case Study "Sany: Going Global", Munich, GRIN Verlag, https://www.grin.com/document/1040011
