Volvo Geely

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SAVONIA UNIVERSITY OF APPLIED SCIENCES
Savonia Business

China’s Foreign Investment Analysis
Case Study of Geely Acquired Volvo

Zhang Huihui
Business Administration Bachelor’s Thesis
Degree Programme
International Business
April 2012

SAVONIA UNIVERSITY OF APPLIED SCIENCES
SAVONIA BUSINESS
Degree Programme, option

Degree Programme in International Business
Author(s)

Zhang Huihui
Title of study

China’s Foreign Direct Investment Analysis
Case Study of Geely’s acquisition of Volvo Car
Type of project

Date

Pages

Thesis

10 April 2012

42 + 3

Supervisor(s) of study

Executive organization

Abdelazim Hannoura , Anneli Juutilainen
Abstract

The objective of this research was to analyze the acquisition case of Volvo Car by Geely including the environment scanning, strategic management and acquisition implementation. The theoretical overview to strategic management explained the acquisition decision making process with various management tools. Furthermore, the benefits and principles of foreign direct investment which were presented in this part are sound base for the detailed discussion about foreign direct investment in China.

The study was accomplished mainly on qualitative research method due to the research limitation. Secondary sources are largely collected from a variety of publications, websites, journals, magazines etc. Meanwhile, the intensive case study provided a comprehensive picture of the acquisition case in a decision making process.

The result of the case study indicated the strategic goals for the acquisition between Geely and Volvo Car. It also pointed out the possible problems Geely are coping.

Keywords

foreign direct investment, acquisition, strategic management, Geely, Volvo Car Note

FIGURES AND TABLES
FIGURE 1

SWOT Matrix

FIGURE 2

PEST Matrixes

FIGURE 3

BCG Growth-Share Matrixes

FIGURE 4

Porter’s Five Force Model

FIGURE 5

Porter’s Diamond of National Advantages

FIGURE 6

Five Force Analysis of Geely-Volvo

TABLE 1

Top Ten Automobile Manufacturers in China in 2010

TABLE 2

World Motor Vehicle Sales by Brand in 2010

TABLE 3

EFAS Analysis of Geely’s Acquisition

TABLE 4

IFAS Analysis of Geely’s Acquisition

TABLE 5

Five Biggest Markets for Volvo Car and the Share in Chinese Market

TABLE OF CONTENTS
1. INTRODUCTION ................................................................................................. 5 1.1

Research Background ............................................................................. 5

1.2

Research Objective ................................................................................. 6

2 THEORETICAL FRAMEWORK ........................................................................ 8 2.1 Strategic Management ................................................................................ 8 2.1.1 SWOT Analysis .................................................................................. 8 2.1.2 PEST Analysis .................................................................................... 9 2.1.3 The Boston Consulting Group’s Growth ............................................ 11 2.1.4 Porter’s Five Forces........................................................................... 12 2.1.5 Porter’s Diamond of National Advantage .......................................... 14 2.2 Corporate Strategy ................................................................................... 16 2.2.1 Foreign Direct Investment ................................................................. 17 2.2.2 Strategic Acquisition ......................................................................... 19 3 RESEARCH PROCESS ....................................................................................... 23 3.1 Research Method ..................................................................................... 23 3.2 Data Sources...
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