Nanjing Chuangqi Company

Identify the situation that this business is facing. Consider and evaluate how this business should manage their supply chain in the future. What decision would you make: Should I carry on with expansion plans or should I focus on the two current projects to gain scale economies? If I expand, should I buy equipment or subcontract?

One of the situation and the issues which company is facing right now is of globalization problem. The international companies are investing in the China market and were ready to capitalize the opportunity the country had to provide. Like as mentioned in the case study China had less of the import duty and because of which many of the international automotive giants were getting attracted to this market because of cheap labor and the less of import duty on the products manufactured. Because of big companies entering the market, it will be eventually difficult for the small companies making auto parts to survive in this situation. It would be hard to make a strong foothold in the market as the bigger giants would be penetrating the market and will not allow any room for the smaller companies to survive the globalization era.

The Nanjing Chuangqi as a company had mainly two products as their core competence which are steering shaft and its superior quality in making the universal joints. At this point of time while the company had was into this two market the demand for this product in the market was at the growth stage and lesser competitor presence in the market which allowed Nanjing Chuangqi as a company to have a stronger presence. If we see the product life cycle of these products at that point of time it was at the growth stage. Now, as the other smaller scale companies got to know the opportunity and getting the presence in the market, the demand for this product has lead to the maturity level which could be the source of concern to the Nanjing Chuangqi as a company. So in order to the stay in the market the company has to think of something innovative ideas to regain and capture the same market but with different product line which could be there USP which is Unique Selling Point.

So hence the conclusion from the above discussion would be to carry on with the expansion plans. As mentioned in the case, I would suggest the steering column module would be the right move. The best time to penetrate the market would be now as the company still presents the head start advantage and moreover knowing the customer base would also be advantageous for the Nanjing Chuangqi as a company and they can exploit it.

Now if we talk about the corporate strategy of the Nanjing Chuangqi as a company, it lacks the branding. It needs to position itself in the minds of the customers. It needs to distinguish itself in the market. The company is lacking the vision and mission.

From the above discussion and the hardships which the company is facing the suggested solutions would be; either becoming