Kubota: How to Regain Competitive Advantage in the Chinese Agricultural Machinery Market

In 1998, after closely monitoring the development of the Chinese agricultural machinery market, Kubota Corporation established Kubota Agricultural Machinery Suzhou Co. Ltd. (Kubota) as its first wholly-owned subsidiary, in Jiangsu, China. Kubota’s market entry process began with semi-feed rice harvesters. It was followed by the gradual introduction and development of various other models of agricultural machines. The business grew continuously along with the development of the Chinese market economy, earning it a place among China’s leading companies in the paddy field market. Kubota then took steps to enter the dry field farming industry and become a comprehensive agricultural machinery enterprise. However, the results fell far short of expectations. The rise of domestic competitors continued to erode Kubota’s share of the paddy field machinery market. The company then faced more challenges related to intense competition, technological innovation, and the Chinese government’s introduction of the National IV environmental policy. Could Kubota regain its competitive advantage in China’s agricultural machinery market?

This case can be used in strategic management and business management courses at the undergraduate or graduate level. Using the establishment and gradual development of Kubota in China, this case helps students understand the characteristics of the Chinese agriculture industry and the competitive situation of the agricultural machinery market. Students will learn how company can create a competitive advantage in a highly competitive market environment by choosing the right development strategy. Specifically, after reading the case study and discussing the questions, students will be able to<ul><li>analyze the competitive environment of the Chinese agricultural industry using Porter’s Five Forces model;</li><li>analyze the changes in each stage of an enterprise using the SWOT framework;</li><li>understand the application of corporate and business level strategies;</li><li>determine whether a strategic adjustment is appropriate and investigate the reasons; and</li><li>understand the characteristics of competitive strategy.</li></ul>

• competitive advantage
• SWOT analysis
• Porter's Five Forces analysis
• strategic transformation
• competitive strategy
• corporate-level strategy
• business-level strategy