BYD COMPANY, LTD._PALAWOGNSE_THEERAPAT
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Hult International Business School
BYD COMPANY, LTD.
Qinchuan Auto Acquisition
Theerapat Palawongse
March, 2015
Shanghai
BYD COMPANY, LTD._PALAWOGNSE_THEERAPAT
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Introduction
BYD, founded by Wang Chuan-Fu in1995, recently became the world second largest
manufacturer of rechargeable battery and raise more than 1.6 million Hong Kong dollar from
the initial price offering. Now came on the edge of decision to acquire Qinchuan Auto
Company, state-own enterprise (SOE) from Xi’an province, China. This paper will provides
insight draw from both external and internal analysis of the current BYD Company, what
make them successful. Follow by the analysis of acquiring Qinchuan. Finally will provide
suggestion to this issue.
Internal Analysis
By using core competencies (Figure 1), BYD has strong Research and Development
(R&D) in both process and product. This gives them the comparative advantage (CA) over
the Chinese competitor. Where locating plant in Shenzhen, China, gave them the
opportunities to exploit low labor cost. When combine with its R&D, BYD can compete with
the Japanese competitor that use capital intensive by using jig and labor to form automate.
Additional from domestic knowledge Wang had gave the ability for human management of
Chinese employee. This makes BYD able to develop strong corporate social responsibility
(CSR) that fit Chinese employee. BYD has completely control over value chain (Figure 2) in
