By 2007, China's Ping An Insurance Co. ("Ping An") had grown into the second-largest life insurer in China. Its goal was to become a universal financial services provider by expanding into asset management and banking. These three businesses were the foundation of Ping An's "three-pillar strategy". It had already made two domestic banking acquisitions, but none in asset management. In November 2007, Ping An acquired a 4.2% stake in Fortis, the Belgo-Dutch financial conglomerate, and planned to buy half of Fortis's asset management business, which would be a big step towards reaching its goal. Yet this ambitious overseas expansion plan was crushed by the adverse effects of the US subprime problem and the global financial crisis. The company needs to address important lessons, re-evaluate its overseas investment strategy and learn how to implement risk management in the future.
Wang's Fortune Tea, marketed as Wanglaoji in mainland China and considered to be the founder of Chinese herbal tea, grew from a strong regional brand in China with limited national market penetration to becoming China's top soft drink giant with 90% market share of the country's herbal tea industry. This case explores how Wang's Fortune Tea became China's top selling herbal tea brand. The case asks students to analyze the company's growth strategies and to consider if it can continue to sustain its competitive advantage while facing intense competition from domestic and international companies.
As a luxury fashion goods producer and marketer, what made PORTS different from other high-end European and American labels was its distinctive background as a China-based company with a Canadian history. The company and the brand, PORTS International, were originally founded in Toronto in 1961 and later acquired by a Chinese immigrant entrepreneur, Alfred Chan, in 1989. Despite being made famous in North America and UK during the 1970s and early 1980s, the brand lost its glory in the early 1990s because of a global recession and poor management. In 1993, Chan decided to rebuild the brand by moving to Xiamen, China where he established the new headquarters and factories. After that, the brand continued to be ranked as one of the top most desirable fashion labels in China. In 2003, the company went public on the Hong Kong Stock Exchange and started slowly entering the Western market. A new label, PORTS 1961, was created for the comeback and to target more high-end consumers. Although China was one of the world's biggest manufacturers of apparel products, China-made products were often associated with cheap, low quality and counterfeits. Since image is paramount in the world of luxury goods, how would PORTS overcome this perception of its goods, as well as other challenges, and further expand its presence in the local and global market?
Founded in 1996, China Minsheng Banking Corporation Limited ("Minsheng") was the first private commercial bank in China. By 2006, Minsheng had acquired almost US$130 billion in total assets and established almost 330 banking offices across the nation. The Banker magazine consistently praised Minsheng's development, ranking it number 310 in its top 1,000 business banks in the world in 2004, number 287 in 2005, and number 247 in 2006. In early March 2008, Minsheng obtained the green light from the China Banking Regulatory Commission to buy a 4.9% stake in US-based banking holding company, UCBH Holdings, Inc. ("UCBH") for US$95.7 million. The deal would eventually take Minsheng's stake in UCBH to 9.9%, totalling around US$200 million. The acquisition not only distinguished Minsheng as the first Chinese mainland institution to invest in a US bank, but was also viewed as a milestone for Chinese banks entering the US and international markets. On the flip side, UCBH would soon use this opportunity to make its own moves into China, leveraging its affiliation with Minsheng to totalingacquire other Chinese banks. This case examines the process of international expansion through acquisitions in the banking industry and the positioning of a growing bank in the global market, covering issues such as value creation, impact of government regulation and international barriers, the Chinese banking industry and its development, and the associated risks.