Zongshen Imitation to Innovation

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Zongshen Case Study MIM 535 1. Identify the key questions Zongshen, as a leading player among China motorcycle manufacturer, intended to differentiate its products by transforming from imitation business model to innovation business model, competing with the foreign competitors such as Honda and Suzuki whom dominated the market, and becoming the most profitable motorcycle manufacturer in China. On the way to achieve this goal, Zongshen faces to two key barriers when it launched the Cyclone program. First, the performance of emerging business didn’t catch the company`s expectation, and exerts threat to Zongshen`s conventional core business. Second, given that in China, an emerging market, Zongshen is hard to find and retain right talent to assess the company moving forward and achieve its transformation goal. 2. Zongshen’s Cyclone Program As the case indicated, Cyclone program aims at developing innovative new products which Zongshen owned the intellectual property rights and intangible asset. The launch of Cyclone program assesses Zongshen identifying the positives and negatives, listed and prioritized as following: Positives: 1. Differentiated products (More competency ) 2. Intellectual Property Rights (Proprietary technology& Innovation ) 3. Intangible assets (R&D and new testing system investment) 4. Gain market share in emerging market 5. Long-term potential profitability 6. Build up new local brand image Negatives: 1. Scarify the development of conventional core business (e.g. resources allocation) 2. Hard to find right talents ( talent with “big picture”) 3. Trust issue with existing customer and market (Affected by old image –imitation) 4. Less profitable in short-term (price gap → “purple products”) 5. Product lines are too narrow 6. Chongqing is not the pioneer player of “E-bike”

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