Yadea: Consumer-Oriented High-End Product Strategy

Between 2015 and 2018, competitors in China's two-wheel e-vehicle industry were embroiled in a price war. Yadea Group Holdings decided to differentiate its brand from competitors and move away from further price reductions, opting instead to raise prices and adopt a distinctive high-end product strategy. It planned to offer its products to Tier 1 and Tier 2 cities in China, and to expand into the international market. With upgraded product and service offerings, the company was becoming a market leader in China's two-wheel e-vehicle industry. However, its founder was well aware that competitors would soon imitate the company’s high-end product strategy and could potentially overtake its market position. In the current Internet-based business environment, new sales and rental models were constantly emerging, which meant Yadea Group Holdings risked losing market share to both domestic competitors and international investors. Therefore, the founder decided that the company needed to choose between two potential five-year plan options for the future: take advantage of the existing market or take the lead in a new high-end market.

This case is designed for modules on marketing strategy and building customer value in principles of marketing courses at both undergraduate and graduate levels. The case may be also suitable for other modules, including evaluating environmental threats, VRIO framework, and diversification strategy in strategy management courses. This case introduces the process for a company to position itself and design a corresponding marketing mix in the China's fiercely competitive two-wheel e-vehicle industry. After working through the case and assignment questions, students will be able to<ul><li>analyze the macro-environment of a specific industry and summarize its characteristics using the PEST framework.</li><li>explain a market's STP theory;</li><li>discuss the hierarchy and features of consumer demand based on the Kano model;</li><li>formulate an effective marketing mix to meet consumer demand at different levels, and to continue creating value for consumers; and<li><li>identify a brand's core competence, and implement a diversification strategy based on that core competence using the VRIO model.</li></ul>

• strategy
• higher-end
• two wheel vehicle