Case Study of Saic Obtaining Ssangyong Motor unit Company Dissertation

Case Study of SAIC Acquiring Ssangyong Motor Company

By Cheryl, Bela, Vianne, Flowers, Danna and Bob

Class 1, British Trade, SCNU

2011/12/01

Content

1 . Introduction2

1 . you Scale of Entry and Strategic Commitments2

1 . 2 Establishing mode2

2 . External macro environment analysis3

installment payments on your 1 Political3

2 . 1 ) 1 Country's situation3

installment payments on your 1 . 2 Shanghai's situation3

2 . a couple of Economic4

installment payments on your 2 . you Cost of production4

2 . installment payments on your 2 Currency exchange rates4

installment payments on your 2 . a few Cost of capital5

2 . several Social5

installment payments on your 3. you Ssangyong Motor unit Company's individual situation in 20045 installment payments on your 3. a couple of Powerful Labor Union of Korea as well as the stuff of Ssangyong5 2 . 4 Technological6

3. Market environment analysis6

3. one particular Rivalry6

three or more. 2 Benefits of buyers7

several. 3 Danger of new entrants7

3. 4 Threat of substitutes7

3. 5 Living cycle of car industry8

4. Examination of internal environment in SAIC Group8

5. SWOT analysis9

6. Conclusion & Possible Solution10

References11

1 . Introduction

With the powerful and sustainable growth of the economic in China, increasingly more Chinese enterprises turn their very own eyes for the targeted market in foreign countries with regard to achieving the economical of scale enterprise as well as improving their very own international competition, which makes the amount of the combination –border purchases grow by a rapid charge for two decades. However , purchases often produce disappointing effect. According into a research done in 2001, practically 70% of mergers and acquisitions failed to achieve expected revenue groupe. SAIC's buy over Korea Ssongyong is by using no exception. SAIC-- Shanghai car industry organization is one of the third largest carmakers in China at the time for the century, whose main businesses are the manufacture, development and purchase of the passenger cars and commercial vehicles and relatively finance. To expand the market discuss and with the wish for independent brands and R& D features, SAIC experienced made up its' decision to acquire South Korea, Ssangyong Electric motor Co. Built in 1954, Ssangyong was Korea's fourth-largest automaker and centered the high end market intended for sport-utility automobiles at that time, which also had a strong R& D staff and intensive, global product sales channels that fit SAIC's ambitions to generate an independent car and branch out in to international markets. However , hard hit by Asian Financial disaster in 97, there was a depression time for the car market in Korea. Most of the well-known cars,such since Hyundai and DAWOO had been acquired simply by foreign countries. With the weighty burden of personal debt, Ssong had changed hands for several times but failed, which offered a fantastic opportunity to SAIC. With a lengthy period of bargaining, SAIC paid 4. one particular billion yuan for the 49 percent stake in 2004 and increased the share by more than 51 percent in the subsequent 2 years, indicating the largest aktionar in Ssangyong. 1 . one particular Scale of Entry and Strategic Commitments

Compared to the large- scale entry, SAIC applied to the small –scale by purchasing practically 50 percent share, which is a way to gather info on a foreign marketplace before deciding whether to with a significant scale and how best to get into. Besides, it could reduce the risks especially with the less encounter in oversea country. 1 . 2 Building mode

As it can be very easily seen that SAIC set up a wholly very own subsidiary in South Korea by acquiring the Ssongyong. Compared with the green field, acquisition is more suitable for the SAIC. Initially, acquiring the Ssongyong made the SAIC speedy to perform and build its presence inside the Korea industry, while the green field must take years to come. Second, the obtain can preempt competitors simply by enlarging the marketplace share. Third, lack of the international management, acquisition makes more feeling than the green field, since it has...

References: He Zhiyi, Ke yinbin, 2011, twelve cases on the transnational M& A of Chinese Corporations, 94-122

Mountain. C. T. L, 2008, Global Organization Today, 394

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