To what extent have internationalization strategies enabled Sany to respond to the
challenges of the slowdown of the Chinese construction machinery market?
1. Introduction
2. The Situation Facing Sany
3. PEST Analysis
4. Internationalization Strategies of Sany
5. Evaluation of Sany’s Response
6. Conclusion
1. Introduction
The growth rate of construction machinery industry in China dropped rapidly in 2012 due
to the deduction of the investment in national fixed assets and the fall of the real estate
market (Fu, 2013). It is becoming increasingly difficult to ignore the slowdown of Chinese
construction machinery market.
This essay will take Sany Group Co., Ltd, a famous Chinese private enterprise, as an
example to illustrate how domestic enterprises use development strategies to reinforce
their marketing positions. The ‘PEST analysis’ (Henry, 2011), which is appropriate for
explaining the trend of internationalizaton, will be used in the essay. Subsequently, a series
of approaches which respond to the market changes will be described, analysed and
evaluated critically.
2. The Situation Facing Sany
Sany currently faces the issue of making new approaches to overcome the backdrops of the
Chinese market. However, the problem is compounded by the excessive acceleration of
internationalization (Fu, 2013). It seems that the past glory of Sany has vanished.
Sany Group Co., Ltd, which was founded in 1989 as a private enterprise, focuses on
machinery and equipment manufacturing industry. Sany’s leading products, for example,
concrete machinery, piling machinery and crawler crane, became the first among domestic
brands (Sany, 2013). In addition, Sany (2013) claimed that their concrete pump truck
replaced the imported one with the domestic market share of 57%. For many years, Sany’s
production and sales ranked first around the world. Sany (2013) points out that there are
approximately 60000 employees around the world. Specifically, Sany, with a market value
of $21584 million became the only Chinese machinery enterprise which was listed both on
FT (Financial Times) Global Top 500 and the Forbes Global Top 2000 (Sany, 2013). By
any measure, this is a successful business.
Sany had been regarded as the most successful construction machinery company in China
until a series of unprecedented problems happened in 2012, such as the ‘nationwide mass
layoffs’ (Liu, 2012). The issue of how Sany reacted to changes in the Chinese market was
selected because of the significant consequences it could have both on Chinese heavy
industry and international construction market.
3. PEST Analysis
The slowdown of the Chinese construction machinery market can be explained by the
