Preview

How Geely Waited for Volvo

Good Essays
Open Document
Open Document
749 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
How Geely Waited for Volvo
Case study: How Geely waited for Volvo
By Pedro Nueno and Gary Liu

The story. Li Shufu, founder of Chinese automotive maker Geely Group, had long wanted his company to buy Volvo, the Swedish carmaker. Volvo would provide the innovation, branding and technology needed to propel Geely in particular and China’s auto industry in general, into global markets.
The financial crisis of 2008, and the big losses suffered by the US auto industry, gave Mr Li an opportunity that was, in his words, like “a world famous movie star marrying a peasant in China”.
More

ON THIS STORY
Volvo seeks small car partner
Volvo names BP’s Svanberg as next chairman
BP/Volvo Svanberg
GM threatens to block sale of Saab to China
Volvo to cut production in Europe and Brazil
THE CASE STUDY
Case study Price offers at McDonald’s
Case study Rethinking an expansion strategy
How to handle a poor appraisal
Case study Arm’s ‘connected community’

The challenge. Apart from the difficulty of getting anyone at Volvo – or Geely – to take the proposal seriously, the deal would be complex, additionally so because it would be international.
In 2007, Mr Li sent a letter to the US headquarters of Ford, Volvo’s owner, that expressed its interest in purchasing Volvo. The letter was ignored.
Early in 2008, Mr Li met a senior Ford executive at the Detroit auto show. Ford was courteous but appeared unimpressed by Geely’s small size.

The initial strategy. Mr Li set up an acquisition team. He invited Rothschild, an investment bank with experience in acquisitions, to help with the deal.
Rothschild was assigned responsibility for the overall co-ordination and the valuation analysis of Volvo’s assets. The acquisition team also included: Freshfield, the law firm, and Deloitte Touche Tohmatsu, the accountants.
Freeman Shen, then vice-president of Fiat China, with experience in European and US companies, also joined the team.

The ongoing strategy. Geely deployed a number of tactics:
● Keep lines

You May Also Find These Documents Helpful

  • Good Essays

    Bear Stearns Case Summary

    • 427 Words
    • 2 Pages

    takeover activity. The firm was very adept at disguising takeovers until the last minute. Its ability…

    • 427 Words
    • 2 Pages
    Good Essays
  • Good Essays

    Like many business Ford Motor company has its dilemmas as well. Facing Ford Motor’s was a shut down their exiting ling of the Mercury vehicle. The Mercury line tried to be revamped into a model of vehicles people wanted. In May 2010 Ford reported double digit sales (Hirsch, 2010). This was not strong enough to save the Mercury line which accounts for five percent of the total company sales. By shutting down this line, Ford would be able to focus on other lines that were becoming more popular. The major characters are Ford Motor Company, General Motors, and the Government.…

    • 1512 Words
    • 7 Pages
    Good Essays
  • Better Essays

    Ernst & Young (1994), Mergers and Acquisitions, John Wiley & Sons, New York, NY, pp. 234-9. Retrieved 2012-02-03…

    • 999 Words
    • 3 Pages
    Better Essays
  • Good Essays

    Business in China

    • 698 Words
    • 3 Pages

    After reading the article I believe that a US company will partner up with a company that will provide them with tangible assets and other services. As the fastest-growing major economy in the world, China continues to offer global companies attractive investment and business opportunities. However, doing business in China also means navigating the complexities that arise from China’s unique historical, political, and cultural contexts (Burkitt, 2012). Establishing a company in China can be a trying and tedious task requiring elaborate approval and registration procedures. Despite the challenges, leading US companies are succeeding in China by developing collaborative relationships with Chinese stakeholders and demonstrating the agility to continuously adapt their strategies to the country’s dynamic environment. Applying for approvals from various authorities is common in China. Navigating China's complex business and regulatory environment to submit the applications to the right channels is an extremely tedious process that the enlightened businessman would rather leave to a partner in China. These companies are positioning themselves for long-term success by embracing the Chinese proverb qiu tong cun yi, which means “seeking similarities while respecting differences.” In doing so, they are co-opting China’s long-term interest in stability and prosperity into their business strategies, China investment regulations and compliance issues (Chu, nd).…

    • 698 Words
    • 3 Pages
    Good Essays
  • Better Essays

    cut out the middle-man by working directly with the factories in China that supplied his company’s…

    • 1282 Words
    • 6 Pages
    Better Essays
  • Powerful Essays

    had led to the merger with BOE. Among other steps, he decided to hire a consulting firm…

    • 5474 Words
    • 21 Pages
    Powerful Essays
  • Powerful Essays

    Case Study of Lenovo

    • 5742 Words
    • 23 Pages

    Mr Liu’s success as a leader, manager and founder of the company could be concluded in the following aspects,…

    • 5742 Words
    • 23 Pages
    Powerful Essays
  • Good Essays

    Blackstone

    • 1046 Words
    • 4 Pages

    The product of months of intense and secret analysis within the firm, the move- the sale of…

    • 1046 Words
    • 4 Pages
    Good Essays
  • Better Essays

    Levendary Cafe

    • 1132 Words
    • 4 Pages

    The main pro of how Levendary entered into the Chinese market was by utilizing the skills of Louis Chen. Chen was a very high-energy and motivated entrepreneur. Chen was bilingual in English and Mandarin Chinese and was very familiar with neighborhoods in Shanghai, China through his decade of experience as a retail property developer. Chen also brought with him a network of contacts to help speed up processes such as permitting, incorporating and staffing stores.…

    • 1132 Words
    • 4 Pages
    Better Essays
  • Better Essays

    Tom Ford

    • 1290 Words
    • 6 Pages

    Bibliography: Full Time Ford. (2011, July 5). Retrieved August 6, 2012, from Tom Ford Does China: http://www.fulltimeford.com…

    • 1290 Words
    • 6 Pages
    Better Essays
  • Good Essays

    | * Role: Leverage Buyout Advisor for * Problems: 1) evaluate proposed bid price2) help ICL reaches its objectives3) On top of this, Deutsche…

    • 1043 Words
    • 5 Pages
    Good Essays
  • Good Essays

    Ford Motor Company Case

    • 1705 Words
    • 8 Pages

    In this Case we focus on the Ford Motor Company and the decision to implement a virtually…

    • 1705 Words
    • 8 Pages
    Good Essays
  • Powerful Essays

    Geely Company Analysis

    • 2590 Words
    • 11 Pages

    Although it’s hard for a new automotive manufactor enter in US market, which is roughly saturated and full of strong competitors, Geely still has its own advantages and oppotunities. Its super-low price becomes a brick to knock the door of US low end vehicles market. Some other famous and successful brand bulid a good model for Geely in car image, design etc. Also, US market is huge and American people have a high consumption, if Geely can catch the oppotunities, the chance to success will be great. Now, let’s take a look at its company background.…

    • 2590 Words
    • 11 Pages
    Powerful Essays
  • Powerful Essays

    As one of the four largest independent private automobile manufacturers in China, Geely Auto has been expanding rapidly. The sale of Geely has increased from 200 units in 1998 to 329.100 units in 2009. In addition, in 2010, the purchase of Volvo greatly increases the reputation of Geely. Although the acquisition just happened few months ago, it is believed that it will beneficial to increase the market share.…

    • 4561 Words
    • 19 Pages
    Powerful Essays
  • Good Essays

    Three days later, Lafley met Kilts’s personal office in Rye, New York. They spoke the entire afternoon and agreed to expand negotiations to include select senior managers. At one points , Kilts asked Lafley why he didn’t bring any bankers or lawyers. Lafley said they won’t necessary. Kilts, Gillette CFO Chuck Cramb, and vice chairman Ed DeGRaan met with Lafley and his CFO, Clayt Daley, to work out the merger teams. Culture and tone were major issues for Lafley. “we were looking for a collaborative culture,“ he said. “In fact, I decided that we were going to be collaborative in the negotiations. We had a friendly deal here, and there was no reason not to have the cards on the table.” Lafley called someone that both he and Kilts respected, Rajat Gupta, former managing director of McKinsey, who urged Kilts to give Lafley an open look at potential cost synergies and a peek at Gillette’s planned technological innovations. Kilts agreed. But come December 2005, they halted negotiations, realizing that they couldn’t strike an…

    • 497 Words
    • 2 Pages
    Good Essays