In 2006, European automotive supplier Interior Group and China-based China Textile established Interior JV, a joint venture in China to produce seat covers for automakers manufacturing in China. After a slow start, the joint venture began to secure orders and was moving towards a breakeven point. Nonetheless, it was still faced with teething problems, especially in product development time, internal quality and on-time delivery. Though Interior JV had adopted many processes that were used by its European mother company, operating in the foreign environment of an emerging market continued to pose challenges for the joint venture. Now Interior JV must address these problems in order to stay on top of the game.

Shanghai Inteva Automotive Door System Co. Ltd (formerly Shanghai Delphi) was a leading player in China's automotive component industry with a 30%market share. Nonetheless, between 2007 and 2009, it failed to meet its profit targets for three consecutive years. A number of factors contributed to this failure, some internal and some associated with the challenges of working in an emerging economy. If Shanghai Inteva is to stay competitive, it has to start making its targets.

In the mid-2000s, an American automaker opened an auto financing company in China, Shanghai-based C Automotive Finance Company (China) Ltd ("CAF"). CAF grew rapidly and broke even in three years. Nonetheless, the long cycle time of its application process led to rampant dissatisfaction among dealers and also lowered the number of car purchases financed by CAF as a percentage of total cars sold. The auto financing industry in China held great potential but was also becoming increasingly competitive as more and more foreign companies entered the market. In order stay on top of the game, CAF must improve the efficiency of its financing application process. What actions could CAF undertake to achieve this objective?

In 1994, US-based building-control systems specialist ECG US created a joint venture with China-based CIG Ltd, Realton JV, in order to manufacture and sell building-control system products, such as air-conditioning valves and fire safety equipment, on the mainland. The joint venture was out of control from the beginning. Sales were weak and, unbeknown to ECG US, the joint venture used complex maneuvers in order to gain contracts. With Realton unable to generate a profit, ECG US decided to dissolve the venture altogether by 2001. Nonetheless, the Chinese partner was adamant about continuing its operation, maintaining that Realton was profitable by Chinese accounting standards. As the two parties enter negotiation, how can they find a solution to this quagmire and protect their interests at the same time?

Kitchen Best is a Hong Kong-based electrical-appliance company. The company has a manufacturing facility in China and sells its wares to customers around the world. Henry Chan, the newly appointed CEO, has ambitious plans for the business. However, a series of instances of misconduct and unethical behavior makes him realize that the business is suffering from a lack of internal control. What type of internal control mechanisms should he put in place to ensure the future success of the company?

Herborist, a high-end Chinese personal care brand, had been steadily expanding its share in global markets since 2008. The brand distinguished itself by integrating traditional Chinese medicine with modern biotechnology and emphasising its green and organic ingredients. Whereas the Chinese were familiar with the concept, how would Herborist sell it to consumers outside mainland China who were used to using established Japanese brands, such as Shiseido and SK-II, or Western brands, such as Estée Lauder and Sisley? In 2001, Herborist chose to enter the Hong Kong market and test its product in this very competitive market that was dominated by the major Japanese and Western cosmetics brands. The company opened two Herborist-branded stores in major shopping centres but was forced to close them down two years later due to bad results. The company tried again in 2007, this time distributing its products through the Hong Kong personal health and beauty chain Mannings. In 2008, Herborist entered the Paris market with the help of the cosmetics chain store Sephora. Results were mixed; although some of its products became top sellers, the overall sales figures were not very promising. By 2011, Herborist was ready for the next step in its international expansion plan. Which markets should it target and what strategy should it adopt?

Taiwan-based memory manufacturer Power Quotient International Co. Ltd. (PQI) had an established system for selecting, assessing, and managing suppliers. A scoring system that assessed suppliers in areas ranging from technical expertise to service quality and responsiveness made it easy for management to spot suppliers' strengths and weaknesses and to decide whether to keep a supplier at arm's length or to cultivate a strong relationship with the supplier. PQI had just completed its biannual evaluation of suppliers, of which several required further investigation. These suppliers had received only average scores despite strong performance both technically and commercially. Meanwhile, the management wondered whether sharing its assessment results openly with suppliers might help improve its relationships with them.

Shenzhen-based Sunshine Fashion Co. Ltd "Sunshine" is a Sino-Japanese venture that has grown from mere original equipment manufacturing of cashmere sweaters for export to include retailing, with 220 retail points throughout China. In order to manage its retail operations, it has set up both regional and branch offices to handle stock and to support and monitor its retail points. It has installed an ERP system for tracking its goods and monitoring sales. The implementation of the ERP system has improved the situation. For example, the system has helped Sunshine manage its domestic business considerably through reliable and consistent reporting from the retail points and branch offices. Nonetheless, fraudulent behaviour among employees has cost the retail chain the equivalent of almost 5% of its domestic sales. What more can the management do to control such behaviour and reduce its loss?

PCL is a leading European consumer electronics, lifestyle and healthcare company that has been operating in the Chinese market since 1995. While its consumer electronics business has grown quickly in China, it has discovered that the costs of returned goods in its TV division equal 5% of its sales. Even more worrying is that 37% of the products returned are of good quality and have been returned without good reason. PCL has set up taskforces to study and remedy the situation and has uncovered a more serious problem within the organisation: control measures designed to handle returns have simply not been executed by its staff and third-party after-sales service centres. What can PCL do to ensure enforcement of company policies in the future?

This case is an update of the 2005 case on the human capital development of ASIMCO (Asian Strategic Investment Corp.) in China. ASIMCO is an automotive component group serving the Chinese motor vehicle industry. This case showcases ASIMCO's management development efforts in the very different cultural environment of China and its succession program, exploring the challenges faced by Western companies operating in China in the process.

Hong Kong-based Li & Fung Group was a trading company renowned for skillful management of its supply chain. The bulk of its business came from the trading of soft goods, which comprised garments and apparel, with the remainder consisting of hard goods such as furniture, fireworks and promotional items. Its major market was the US, followed by Europe, which contributed about one-quarter of its turnover. With the global economic downturn in 2009 following the collapse of the American housing and credit markets, and with the fashion industry expected to be severely affected, how could Li & Fung continue to grow its business and achieve the target of doubling its turnover to US$20 billion for the period 2008-2010?

Founded in 1987, Naxos had become the world's largest classical music label. It had reached this lofty position by being an innovative cost leader. The company's chairman, Klaus Heymann, had been quick to take advantage of a drop in the manufacturing price of CDs and the fall of the iron curtain. Recording with artists and orchestras in eastern Europe and paying musicians one-time fees instead of royalties, Naxos had developed a unique and effective business model. The company had also been a first mover in the web-based distribution of music. Having exhibited a knack for making the right move at the right time, what should Naxos do to sustain its success in the decade to come? This case was used in the Second McKinsey/HSBC Business Case Competition.

In the summer of 2007, Mattel, the largest toymaker in the US, made several recalls of products that had been made in China. The recalls led not only to a sharp reduction in Mattel's sales but also to public hearings in the US Congress, which significantly affected Mattel's reputation. Like other toymakers, Mattel has been relocating its production abroad, outsourcing the manufacture of parts and components. Indeed, 65% of Mattel's products are made in China. In contrast to its competitors, however, Mattel has understood the importance of quality control in this relocation/outsourcing process. In the 1980s, it reversed its earlier strategy of outsourcing to factories in Asia by owning and operating some plants in Asia for producing its most popular products. The product recalls show that quality control continues to be an issue. This case explores Mattel's strategy for organizing production, the trade-offs between in-house production and outsourcing, and the trade-offs between different production locations.

This case reviews the development and financing of the Dabhol power plant in India's Maharashtra state. This project was controversial from inception for three main reasons: the promoter (the now defunct Enron Corporation) sought to minimise its capital commitment in the project; the project economics relied on high final output pricing relative to prevailing (subsidised) price levels; and both project and financing transactions failed to protect adequately against political disruption. For practical purposes it may be considered an example of a failed project finance venture. This case explores in particular how risks associated with developing such ventures in a politically volatile environment may be mishandled by promoters and financiers. In principle it aims to illustrate the difference between managing operational risks and managing and mitigating project risks in an uncertain institutional setting.

In 2003, the Hong Kong government opened the market for electronic trading services. It awarded a license, the second of two, to GO-Business to design, implement, operate and maintain the front-end system of the Government Electronic Trading Service (GETS). The first license had gone to Tradelink, which had enjoyed a monopoly in the market for six years. GETS was a system that enabled traders to submit and apply for trade documents electronically. As a latecomer in the market for a compulsory government service that had been monopolized, GO-Business faced formidable barriers in competing with Tradelink. How could GO-Business position itself and what could it do to compete with Tradelink and gained market share?

PepsiCo introduced Lay's potato chips to China in 1997. As its chips business grew in China, it faced increasing difficulties in securing a reliable supply of quality potatoes. In the North American market, Pepsi relied on external suppliers for its potatoes, but in China, it ran into problems both in sourcing locally and in getting its US supplier to grow potatoes on its behalf. The matter was further complicated by the fact that the Chinese government had banned the import of potatoes. Faced with numerous obstacles in sourcing potatoes in China, how should Pepsi go about securing this critical input? Should it rely on external suppliers given China's immature agribusiness industry, or should it integrate backwards to grow its own potatoes?

In April 2006, Ocean Park, Hong Kong's only home-grown theme park, launched a syndicated loan to raise HK$4.1 billion for a master plan to revamp the park. The master plan represented the park's strategic responses to the arrival of Hong Kong Disneyland, which had opened the previous year. Faced with a formidable competitor, Ocean Park repositioned itself as a world-class marine theme park. Looks at how Ocean Park positioned itself against an international competitor and how Disneyland's failure to accommodate local culture consolidated Ocean Park's position