Business Strategy Analysis of Geely Firm

Topics: Automotive industry, SWOT analysis, Volkswagen Group Pages: 13 (3421 words) Published: November 10, 2012
Business Strategy Analysis of Geely Firm
Table of Contents

1.0Executive Summary2
3.0Internal environmental analysis4
4.0External Environment Analysis5
4.1Political factors5
4.2Economic factors6
4.3Social factors6
4.4Technological factors6
4.5Environmental factors7
4.6Legal factors7
5.0Competitive environment analysis7
5.1The threat of the entry of new competitors8
5.2The threat of substitute products or services8
5.3The bargaining power of customers8
5.4The bargaining power of suppliers9
5.5The intensity of competitive rivalry9
6.0Key strategic competencies identification10
6.1SWOT Analysis10
6.2Key strategic resources identification11
7.0Evaluation to the strategic options11
7.1Strategy choice11
7.2Evaluation to Geely’s strategy12

1.0Executive Summary

The main purpose of this report is to analyze the business strategy analysis of Geely Firm. This report comprises the external environment analysis of this firm as well as the threats and opportunities it faces, and based on which to find out the proper strategic options for this firm by the exhaustive analysis and evaluation.

Geely Firm is an excellent auto manufacturer of China and also among the country’s top 500 firms. In the past ten years, Geely has grown fastest in all of the companies in the Chinese automotive industry. As an outstanding auto manufacturer, Geely has its unique organization culture as well as the business strategy, which deserves to be researched. According to some classical analysis, such as PESTEL analysis, 5-Forces analysis and SWOT analysis, this report finds out the status of its external business environment it faces and then based on which to evaluate its business strategy. The report tries to find out the appropriate strategy that the firm should to follow.


Geely was established in 1986 and started the auto manufacturing in 1997, now it has become one of the China’s top ten auto manufacturers, which is fully independent auto firm from research, design to production, distribution and servicing. In 2005, Geely Automobile Holdings Limited was listed on the Hong Kong Stock Exchange, which brings this company a large number of benefits. Now it has more than 8000 employees and six car assembly and power-train manufacturing plants in Linhai, Ningbo, Taizhou, Shanghai, Luqiao and Lanzhou in China. On March 28 2010, Geely group successfully accomplished the acquisition of Volvo.

As Ackoff said, any individual systems are purposive (Kirby & Rosenhead, 2005), so does Geely group. Hence the current mission of Geely should be evaluated from the social, cultural, and psychological mechanisms. From the social point, Geely always keeps its core value as “using our wisdom, integrity and hard work to build harmonious society”. From the above statement, it can be seen that Geely attaches importance to its social responsibility and works hard in the development of society (Geely, 2011). It takes Entrepreneurship, Diversity and Adaptability as its corporate culture. It encourages the employees to communicate, harmonize and cooperate. Besides, it also focuses on lifting the innovation ability of the employees. From the psychological point of view, the company tries to create a relaxed and amused atmosphere for all the employees. It tries to make the consumers enjoy the driving, the distributors enjoy the distribution and the suppliers enjoy the cooperation. The overall mission of Geely is to produce good cars for the ordinary people which they can afford and let Chinese cars come into the worldwide marketing.

Geely Group's annual business conference was held in Hangzhou Headquarters on December 28 2010. On this conference, the president of Geely Group, Jian Yang, proposed the "two changes, two adjustments" as the development strategic objectives of 2011, i.e., changing the "international...

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