The Chinese State Environmental Protection Agency

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Case Study Report

Introduction
This case study report will explore the company Phase Separation Solutions (PS2) and identify the key problems and alternatives. An analysis and application of models will then be conducted. Specifically, the five models chosen consist of a PESTEL analysis, Porters Five Forces, a SWOT analysis, the VRIN model and the organisational configuration model. An evaluation of alternatives involving advantages and disadvantages for the alternatives are then investigated. Finally, a conclusion and recommendations are presented for PS2.

Identification of Key Problems and Alternatives
Within the case study there are a set of key problems and alternatives presented. The first problem deals with whether PS2 should enter the Chinese market. To investigate this further, economic problems, regulatory problems, and the problem of potential limited markets in Canada and North America may compel PS2 to internationalise. Declining economic markets and volatile industry propensity in Canada and North America display limited sustainable future revenues and weakening PCB-contaminated soil allocation. Regulatory issues prohibit PS2 from transporting soils from the US to Canada in addition to PCBs only providing PS2 with short term momentum as PCB treatment is a declining market in Canada. Currently, in the Canadian market there is a potential limit in regards to the amount of PCB-contaminated soil and unfavourable cost advantages which may require PS2 to look abroad in order to increase their business activities. These factors raise issues of constraints in PS2s existing markets (Canada and North America) which will cause assessment whether PS2 should internationalise into China.

The second problem deals with which of the two opportunities should PS2 pursue. PS2 needs to weigh up the two options. Option one is a joint venture (JV) with Nanjing Institute of Environmental Sciences (NIES) in the remediation POP-contaminated soil while option two is a JV with Zhoushan Nahai Solid Waste Central Disposal (Nahai) in oil recovery from oil sludge. Either none, option one, option two, or both need to assessed and then selected. Would it be feasible to pursue both? Assessments of internal capabilities would need to be undertaken, focusing on financials and costs to determine the possibility of pursuing both options. In order to undertake both options, PS2 has to assess the cost and benefits. The third problem deals with whether PS2 possess the required resources and capabilities to pursue an equity-based entry. An internal assessment of resources and capabilities will need to be undertaken to determine current capacity and any future resources and capabilities needed to expand. Additionally, determining the affect cooperative opportunities with NIES and Nahai in China would do to impact the metrics of PS2 and the flow-on impact on corporate resources and the organisational structure.

The fourth problem deals with what ownership levels PS2 should assume for each option. Investigating both options and determining the percentage of ownership levels for both options (i.e. equal joint control, majority control or minority control) needs to be undertaken. Therefore contract negotiations with potential JV partners must suit PS2. Based on ownership levels, the fifth problem would be how PS2 would staff its Chinese operation(s) if they decide to pursue the opportunities in China. Organisational structures, systems, and staffing need to be considered when determining the JV and the collaboration of staff.

The sixth problem could be that the Chinese market is still in an emerging stage which brings about issues of lagged development of industry in terms of research capabilities and techniques of treatment facilities even though the potential size of this market appears a decent size for small firms such as PS2. The seventh problem deals with competitors (i.e. BEV) who have been seeking opportunities for geographical...
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