Geely Company Analysis
When globalization becomes a circumstance, many companies try to open oversea market. Here, we’d like to take a look at a Chinese private-own automobile company Geely. As china’s top car maker, Geely abstracted the world’s eyes recently. In 2004, Geely plans to export 5,000 vehicles to the Middle East, South America and North Africa after shipping 1,000 cars to Syria in the fourth quarter of 2003 at US$4,000-$6,000 each. This year, Geely wants to open US market. But with many strong competiters in car manufactory in US, with weak reputation around chinese product, How does Geely find an appropriate approach to develop its business? This paper will try to find the answer. First, we will introduce Geely background to help reader know its history and present situation. Then we will do SWOT analysis and Entry mode comparison toward its current status to find a better approach for Geely to enter in US. We will cover chapter 4 and chapter 14 in this paper.
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.
Geely automobile company was found on March, 1997 in Zhe Jiang China. It is a private own automobile company. The registered capital of this company is RMB 20 million. In 2001, Geely automobile became the first approved private company in terms of automobile manufacture in mainland China. The chairman of the company is Li Shu Fu. He has good relationships with the Chinese government leaders and Zhe Jiang province government leaders. China has high economic growth rates since 1980s. Many Chinese people make a lot of money every year. Most of them want to own cars or need cars for many reasons. So the Chinese car market become bigger and bigger. It provides a good opportunity to Li Shu Fu and his employees to realize their dream: “Make the best Cars, ordinary People Can Afford.” Geely automobile company hires many workers to produce different styles cars in Zhe Jiang province and operates big business in mainland China, Middle East, southern America and Africa. The operation of the company can affect the economic growth of Zhe Jiang province. So, Geely automobile company always gets support from the Zhe Jiang province government. Gerry automobile company is focusing on low-income market in mainland China. In the first half of 2003, Geely Company produced 34360 units of cars and renews the lowest prices of its products in the automobile industry, so the company shared 3.84% of the total Chinese car market. At the same, the company made technical cooperation agreement with German Rucker Company. The cooperation agreement helps Geely automobile to improve its products’ quality quickly. This company gets success in domestic market after its first car launched off in Linhai City Zhejiang Province. On June, 2003, the one hundred thousand Geely care launched off in Zhejiang Province. This company has import & export license and the ISO 9001 quality system certification, so it is very easy for the company to export its products to other countries. Gerry Company tries to enter in international market since its foundation. The company sells its products or establishes extensive trading relationship in different countries and areas since 2003. It seems to get success in Middle East, Southern American and Africa because the company exports large quantities of products to those areas per year. This company is looking...
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