Case Study of Saic Acquiring Ssangyong Motor Company
Case Study of SAIC Acquiring Ssangyong Motor Company
By Cheryl, Linda, Vianne, Ivy, Danna and Bob
Class 1, English Trade, SCNU
2011/12/01
Content
1. Introduction 2
1.1 Scale of Entry and Strategic Commitments 2 1.2 Establishing mode 2
2. External macro environment analysis 3
2.1 Political 3 2.1.1 Country’s situation 3 2.1.2 Shanghai’s situation 3 2.2 Economic 4 2.2.1 Cost of production 4 2.2.2 Currency exchange rates 4 2.2.3 Cost of capital 5 2.3 Social 5 2.3.1 Ssangyong Motor Company’s own situation in 2004 5 2.3.2 Powerful Labor Union of Korea and the stuff of Ssangyong 5 2.4 Technological 6
3. Industry environment analysis 6
3.1 Rivalry 6 3.2 Power of buyers 7 3.3 Threat of new entrants 7 3.4 Threat of substitutes 7 3.5 The life cycle of car industry 8
4. Analysis of internal environment in SAIC Group 8
5. SWOT analysis 9
6. Conclusion & Possible Solution 10
References 11
1. Introduction With the robust and sustainable growth of the economic in China, more and more Chinese enterprises turn their eyes to the targeted market in foreign countries for the sake of achieving the economic of scale enterprise as well as improving their international competitiveness, which makes the volume of the cross –border acquisitions grow at a rapid rate for two decades. However, acquisitions often produce disappointing result. According to a research done in 2001, nearly 70% of mergers and acquisitions failed to achieve expected revenue synergies. SAIC’s acquisition over Korea Ssongyong is with no exception. SAIC-- Shanghai automobile industry corporation is one of the third largest carmakers in China at the turn of the century, whose main businesses are the manufacture, development and investment of the passenger cars and commercial vehicles and relatively financial services. To enlarge the market share and with the desire for independent brands and R&D
By Cheryl, Linda, Vianne, Ivy, Danna and Bob
Class 1, English Trade, SCNU
2011/12/01
Content
1. Introduction 2
1.1 Scale of Entry and Strategic Commitments 2 1.2 Establishing mode 2
2. External macro environment analysis 3
2.1 Political 3 2.1.1 Country’s situation 3 2.1.2 Shanghai’s situation 3 2.2 Economic 4 2.2.1 Cost of production 4 2.2.2 Currency exchange rates 4 2.2.3 Cost of capital 5 2.3 Social 5 2.3.1 Ssangyong Motor Company’s own situation in 2004 5 2.3.2 Powerful Labor Union of Korea and the stuff of Ssangyong 5 2.4 Technological 6
3. Industry environment analysis 6
3.1 Rivalry 6 3.2 Power of buyers 7 3.3 Threat of new entrants 7 3.4 Threat of substitutes 7 3.5 The life cycle of car industry 8
4. Analysis of internal environment in SAIC Group 8
5. SWOT analysis 9
6. Conclusion & Possible Solution 10
References 11
1. Introduction With the robust and sustainable growth of the economic in China, more and more Chinese enterprises turn their eyes to the targeted market in foreign countries for the sake of achieving the economic of scale enterprise as well as improving their international competitiveness, which makes the volume of the cross –border acquisitions grow at a rapid rate for two decades. However, acquisitions often produce disappointing result. According to a research done in 2001, nearly 70% of mergers and acquisitions failed to achieve expected revenue synergies. SAIC’s acquisition over Korea Ssongyong is with no exception. SAIC-- Shanghai automobile industry corporation is one of the third largest carmakers in China at the turn of the century, whose main businesses are the manufacture, development and investment of the passenger cars and commercial vehicles and relatively financial services. To enlarge the market share and with the desire for independent brands and R&D
References: He Zhiyi, Ke yinbin, 2011, 10 cases on the transnational M&A of Chinese Enterprises, 94-122 Hill.C.W.L, 2008, Global Business Today, 394