DJI, founded by 24-year old Frank Wang Tao in 2006, grew rapidly from an unknown startup in China to a leading global player in the Unmanned Aerial Vehicles (UAVs) market for hobbyists within seven years. DJI saw its revenue soar 79 times in three years (2010-2013) and its staff grow 50 to 1,500 across Asia, Europe and the USA. The case describes how a tech entrepreneur started serving a niche segment moved towards a broader consumer market, by opening up new horizons for aerial photography and videos enabled by its innovative products. The case outlines DJI's product development strategy to establish its competitive advantage and the entrepreneurial process for taking a technology concept from initial idea to developing the prototype, and subsequently launching the new product in the market. The post-startup issues encountered by a growing technology venture and the challenges faced in an evolving marketplace.
In 2008, more than 750 million cell phones were produced in China. A significant portion (20 percent, or about 150 million units) of these phones were produced by Shanzhai companies. These companies had rapidly taken a significant share (about 10 percent) of the worldwide market. This phenomenal growth was primarily due to nonconventional approaches to the global market in market positioning, rapid product development, and tightly coupled, responsive and efficient supply chain management. Though Shanzhai often has been perceived as a term for counterfeiting, in reality it is more than just copying. Modern cell phones contain sophisticated hardware, software and systems technology, yet Shanzhai companies of only 10 people could leverage a sophisticated (though informal) network of product designers, manufacturers, and distributors to make a successful business. This case describes the Shanzhai phenomenon, and how these companies operate. It also provides an example of one company that successfully transitioned from a Shanzhai culture to become a major mainstream force in the Chinese mobile phone industry. The case also discusses forces that challenge the future of the Shanzhai model.
In August and September 2007, Mattel made a series of product recalls, totaling more than 20 million toys. The recalls were for excessive lead and for magnets that could become loose. All of the recalled toys had been made in China. The Mattel recalls followed on the heels of a number of high profile safety problems with Chinese imports, including contaminated pet food and toothpaste, defective tires, and lead-painted toys. The recalls sparked intense criticism of Mattel and its Chinese supply chain, despite the fact that more than 85 percent of the recalled toys were due to design problems (magnets), not the result of improper manufacturing (use of lead paint). The case provides a basis for discussion of outsourcing and supply chain management. The basic toy manufacturing process is fairly simple, providing a forum for discussing these issues without the complication of advanced manufacturing technology or an involved supply chain. In this case, supply chain defects, such as the use of lead paint by vendors, can have severe consequences. The supply chain must be designed to prevent these defects. The case enables discussion of why companies outsource, managing a supply chain, and the appropriate use of inspection and testing. It also provides the opportunity to examine response to a crisis situation, and the relationship between a company and government.