Essay About Byd Company And Internal Analysis Of The Current Byd Company

Byd Company, Ltd. Qinchuan Auto Acquisition
Hult International Business SchoolBYD COMPANY, LTD.Qinchuan Auto AcquisitionTheerapat PalawongseMarch, 2015ShanghaiIntroduction        BYD, founded by Wang Chuan-Fu in1995, recently became the world second largest manufacturer of rechargeable battery and raise more than 1.6 million Hong Kong dollar from the initial price offering. Now came on the edge of decision to acquire Qinchuan Auto Company, state-own enterprise (SOE) from Xi’an province, China. This paper will provides insight draw from both external and internal analysis of the current BYD Company, what make them successful. Follow by the analysis of acquiring Qinchuan. Finally will provide suggestion to this issue. Internal Analysis        By using core competencies (Figure 1), BYD has strong Research and Development (R&D) in both process and product. This gives them the comparative advantage (CA) over the Chinese competitor. Where locating plant in Shenzhen, China, gave them the opportunities to exploit low labor cost. When combine with its R&D, BYD can compete with the Japanese competitor that use capital intensive by using jig and labor to form automate. Additional from domestic knowledge Wang had gave the ability for human management of Chinese employee. This makes BYD able to develop strong corporate social responsibility (CSR) that fit Chinese employee. BYD has completely control over value chain (Figure 2) in battery production, as its believe that fully control of production process will yield a better quality product. Therefore BYD had applied R&D in every process to improve and develop both production process and product quality. Looking at resources analysis (Figure 3) it show that BYD has strong reputation on innovative and R&D department. This gave BYD acquisition proposal from Qinchuan. Even all these give BYD current CA, but the competitor can still imitate these, even though it might in high cost for them.External Analysis        Five force (Firgure 4) shows that there is high potential of new competitor to enter the market and soon BYD might be catch up by the local competitor, if it didn’t have strong CA. Furthermore, PEST analysis (Figure 5) suggests that BYD has used the benefit from special economic zone, Shenzhen and located them inside industrial park to grow. The drawback was the spillover effect of knowhow to other competitor within the area. SWOT (Figure 6) also support this issue and when combine with the weakness lack in government connection, was very curcial in operating in China see Stalkholder analysis (Figure 7), as government is really important for sustainable growth in this environment. This make BYD wishes to expand and implement the vertically intergration supply chian of headset to gain other form of CA.