Byd Auto

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International Expansion Opportunities for BYD Auto|
Country-Based Project |
Master of International Business
Course: Global Business Operations
Course Code: Intbus 721
By Liwen Ji (1401148),
August, 2010

1. Executive Summary1
2. Introduction1
3. Internal Analysis: Strategy and Structure1
3.1 Company Background1
3.2. Value Chain Analysis2
3.3. Porter’s Generic Strategy3
3.4. Product Lifecycle & BCG Matrix4
4. External Analysis5
4.1. Initial Country Screening5
4.2. The Economist Model of Country Analysis5
4.3. Porter’s Five Forces7
5. Market Entry Strategy8
5.1. Timing of Entry and Market Entry Mode8
5.2. International Strategy8
6. Recommendation/ Summary9
7. Conclusion9
8. Appendix10
9. References16

1. Executive Summary
This study is committed to analyze the international expansion opportunities for BYD Auto, a China-based car manufacturer which is considering promoting its electric vehicle into other countries. In this article, a series of theories and framework have been used to analyze the company internal situation as well as external environment and risks. First of all, after briefly introducing the company, a value chain analysis and Porter’s generic strategy reveal the company’s value creation activities and overall strategy. A product lifecycle analysis and BCG matrix then identifies the property of the company’s products. The second part of this article mainly focuses on the destination of expansion as well as the suitable entry mode and strategies. After analyzing four countries – Australia, United States, United Kingdom and Brazil using the Economist model, the advantages of United States become obvious and incomparable. The further research indicates the recommended strategy is to form a joint venture with a local car manufacturer and undertake global standardization strategy.

2. Introduction
The accelerating consumption of fossil fuel by automobiles has resulted in disastrous effects. Air pollution is risking public health, while global warming is intimidating the life of human beings. At this moment, when changes to an environmentally friendly world are urgently demanded, a number of corporations have taken measures to cater for this trend. BYD Auto is one of them. Using its expertise in battery production, BYD Auto developed its own all electric automobile – e6. This study will recommend a series of strategies by which BYD Auto can bring e6 into the world.

3. Internal Analysis: Strategy and Structure
3.1 Company Background
Established in 1995, BYD Co. Ltd was originally a high technological corporation in China specialized in IT products including rechargeable batteries and mobile handset components. In 2009, BYD was recorded by the CWRA (China World Records Association) as the world’s largest Li-ion battery producer. Till the end of 2009, it has built nine plants in China and subsidiaries around the world, hiring over 150, 000 employees. As its new business and main focus in recent years, BYD Auto was established in 2003 when the Group acquired Xi’an Tsinchuan Auto Co. Ltd. The Headquarters is located in Shenzhen, the first SEZ (Special Economic Zone) of China. Apart from the traditional fuel vehicles, the company is a pioneer in developing automobiles using clean energy by applying its technical strength in the battery field. The dual mode electric vehicle F3DM, for example, combines a pure-electric mode with a hybrid drive system that incorporates a small gasoline engine. The Pure electric auto e6 adapts ET Power Fe battery, which is one of the patents of BYD highlighted in its excellent safety, long durability, and the use of recyclable chemical substances in production. With this strong battery inside, e6’s top speed reaches 140km/h, and can be driven as far as 300 km once fully charged (See Exhibit 1). Within 15 minutes connected to any household power supply, 80% of the...
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