Yushan Bicycles-Harvard Case

1. Yushan Bicycles:
Learning to Ride Abroad

2. Introduction & Case summery
“Yushan” Taiwan's no 7 bicycle manufacturing company.
Established in 1985 by two semi professional cyclist.
Known for their straight line design and compact size.
Started producing E-cycle in 2007
International Strategy - 3 Phase expansion plan
created due to slowdown of domestic Market
 Asia Market
 Europe Market
 Oceania Market – Yushan in Australia (YA)

3. -
Problem started with Quarterly loss in Yushan Australia
YA was in a loss for some common technical and planning
issue.
 Hiring Staff, Lease office, Ware house space
Delivery delay for YA than Asia and Europe.
Inner system problem for stock recording.
Transfer pricing and currency fluctuation.
Knowledge on Australian Market
Introduction & Case summery

4. Financial data of the Company

5. Identification Of Problems
How to develop sales and product strategy for Yushan Australia
to grow profit and capture market share.
How to develop a better and on time supply chain system so
there will be no delay for the delivery of the product in the
subsidiaries.
How Hamilton can cultivate trust between him and the Head
Quarters so he can implement his own strategy and prove that
his plan took time but was effective.

6. Challenges of Yushan
Struggle to gain market share within Europe.
Transfer price to the Australian subsidiary.
It could not raise local price to match transfer cost.
Lack of trust in Australian subsidiary from Taiwan’s
head management.
Lack of communication among the different
subsidiaries.
Currency fluctuation

7. Challenges of Yushan
Motivation - customers seeking bicycles at reasonable price
and willing to pay more for additional attributes and
performance.
Organization Culture - Consumers of all over the world
are not same at their thinking.
Consumers perception - Consumers of Australia are so
health conscious & they used to sweating themselves.
Controlling - the profitability of its Taiwan based operations
ahead of that of offshore subsidiaries
Company Performance - Hamilton’s penetration strategy
that increase the sales volume for low price which will help to
capture the market share.

8. Strengths
Leading International Bicycle
Company
Penetrated to the global market
Reasonable control over production
and distribution due to backward and
forward integration
Weakness
Major dependence on the market as
the country of origin market
Despite being in operation for
decades, has standard procedures and
regulations for all portfolio items
Immutability possible by competition
Opportunities
New South Asian and Asia Pacific
regions available for expansion –
emerging markets
Acquisition of medium-sized similar
companies and shops in developing
countries
Threats
Increased marketing from competing
players, which might affect sales
negatively
An increasing number of independent
producers and marketers
Increased and saturating competition
SWOT

9. Solution and Recommendation
Yushan Australia seems to focus more on price
advantage as the main competitive advantage.
Instead they should have proper marketing plans to
target and position its products to different market
segments in Australian bicycle market.
I. Select the target market segment
II. Develop the marketing plan to address the target
market
III. Position the product well in order to gain higher profits

10. Solution and Recommendation
We propose to target E-Bicycle for the women
segment in Australia.
I. In Japan mostly women liked it. So it was successful
in Japan.
II. We can give the green concept for the women by
saying " Buy Yushan E-bike and make a future world
that where your child can breath freely.

11. Solution and Recommendation
Let's promote high end bicycle to children who use
bicycle for daily school travel.
I. Promote Yushan as a safe bicycle for children with
some added safety feature.
II.Address the market segment of parents and say
"Give your child the safest bike to go to school."
III.or "Your kid will not break it since it has the most
durable materials"

12. Solution and Recommendation
For Hamilton(General Manager, Yushan Australia)
I. Providing various offers like discounts, gift vouchers
to attract the customers.
II. Price must be reduced up to certain limits for those
models which people are not liking to purchase.
III. The transfer price conflicts - He needs to work on
developing the accurate forecasts and operate to
achieve a breakeven.

13. Solution and Recommendation
For Chih-hao Zonghan (Director, Sales & Operations)
I. He must suggest Hamilton to incorporate the possibility
of transfer price increase during the next negotiation.
II. He should make efforts to train the staff of YA in terms
of training them to operate the ERP system, marketing
the products, dealing with customer issues and
negotiating with the clients.
III. He must share and discuss the problems with all the
subsidiary managers.
IV.Hamilton and his team must get little bit more time for
proving themselves.

14. Solution and Recommendation
For Yushan Headquarters
I. There must be open communication between the
employees(staffs) and the managers for better understanding
of market.
II. New suggestions from anyone at any level must be
welcomed.
III. IHRM is a vital component of implementing the global
strategy of a firm.
IV. Companies goals and objectives must be clearly defined.
V. They should draw attention on the efficient production.

15. Conclusion
Yushan need to maintain all his subsidiary autonomy and
adapt the cultural aspects for entering into the market.
This company needs to hire a sales manager and
regional manager who is already having experience in
the country. So, they can managed easily.
Company need to reorganise for reflecting similar product
and organisational culture of the country but price
strategy does not favoured to establish market and falling
subsidiaries.

16. Thank you ……!!!