Details Whirlpool's initial years in China and illustrates the problems that a global industry leader can face while entering a new, developing market like China. Although it is relatively easy to gain access to the larger cities, there are many barriers associated with establishing a brand presence and gaining a foothold in the lesser developed regions of China. Allows students to examine how Whirlpool should reposition itself in China, investigating specifically whether Whirlpool China should concentrate on selling or sourcing in the future.
Explores the predicament Louis Vuitton Moet Hennessy (LVMH), one of the world's leading luxury products makers, faces with respect to brand management while expanding operations in China. LVMH, a $13 billion group of companies with operations across the world--1,500 retail stores in about 60 countries--had conquered the luxury goods market successfully in Europe, the United States, and some parts of Asia. In the early 1990s, LVMH decided to expand its operations in China and South Korea. A decade later, LVMH made its entry into India. In 2004, Asia accounted for about 40% of the sales of LVMH. LVMH is determined to capture the growing Asian market. However, it faces several challenges in its expansion plans in Asia; one of its major concerns is protecting its brand against dilution. Although China is a huge market, phony branding is endemic there. In addition, LVMH's expansion plans in Asia introduced the issue of private ownership vs. franchising with regard to the profitability of companies in the luxury goods industry.
Since its inception in 1984, Lenovo Group Ltd. had grown from a company engaged primarily in the distribution of imported computers to being the largest IT corporation in the People 's Republic of China. Although Lenovo was able to hold onto its market leadership position, competitive pressure from Dell, IBM, Toshiba, and HP was increasing, with the company taking large hits, mainly at the hands of Dell. Engaging in a series of price wars to retain the low end of the consumer segment, Lenovo was also struggling to maintain its stronghold in corporate sales to Chinese government ministries and schools. With the PC market in China maturing rapidly, Lenovo's main challenge was to develop a business model that would not only combat Dell's direct selling model but would also take advantage of the group's traditional strengths. With a view to meeting the group's projected target of becoming a Fortune 500 company by 2010, Lenovo was looking toward tapping international markets as well as exploring product diversification strategies in the local market. Lenovo's predicament highlights the growing pains many Chinese companies faced in their efforts to become global players while defending their domestic market share from foreign rivals.