Case Analysing

History, Development, and Growth of the Company

Western Energy Inc primarily an oil company conducted business in more than 100 countries and
employed more than 78000 people worldwide. With annual sales around $ 10 billion in the 1980s
and the early 1990s, WEI was among the top ten major energy firms in the United States. Arnold
Tanner was first the CEO and then chairman of the San Francisco based firm from 1962 to 1990.

American Copier Co was a copier producing company which took different strategy considering
Western Energy Inc. ACC formed shanghai joint venture late 1987, the 30 millions ACC shanghai
become number in china’s growing copier market by 1989 and planned to captured even greater
market share. They marketed different strategy- it was continuous low profile and aimed building
cooperative relations with local partners. Its copiers, duplicators, production publishers, electronic
printers, facsimile products, scanners, and computer products were marketed in over 130 countries.

SWOT Analysis

Identification of Internal Strengths and Weaknesses

WEI:

Strengths:

Weaknesses:

ACC:

Strengths:

 Substantial experience from its joint venture operations in Australia, Brazil, Germany, Great
Britain, India, and Japan.
 Greater official support for the joint venture than for its competitors.
 The name ‘Sanghai Beauty’ drowns the attention of the Chinese people.
 Vigorous quality standard extensive dealer network and an aggressive and skilfully executed
advertising campaigning accompanied with reasonable price leaded it to the success.

Weaknesses:
  The original feasibility study proved to be overly optimistic in its assumption of production
and size of the copier market in China. This miss calculation was perhaps unavoidable.

Nature of the external Environment

WEI:

 China started its open door policy in 1979 and wanted to achieve the American investment
in the country. So Western Energy Inc had the good opportunity to enter into the market.
 Developing the energy sector to support industrial development has become a priority goal
of the Chinese Government.

ACC:

 In order to purchase a copier, a prospective buyer first has to obtain permission from several
government agencies.
 Before entering into the market, China market was dominated by the Japanese makers,
including Canon, Minolta, Ricoh, and Toshiba. So it was very difficult to inter in to this
competitive market.
 It was only copier producer thus far to establish a joint venture in the country.
 Large concentration of components suppliers and the number of skilled labour in the area.
 The process to achieve the goal was too difficult since none of the local suppliers initially
had the technical expertise or equipment necessary to produce the quality components
needed by ACC Shanghai.
 ACC was renewed throughout the world for its quality products.
 Maintaining quality control culture in the venture to maintain quality at all level not just
interaction with the end users.

Corporate Level Strategy Pursued by the Company

WEI: The year 1990 left the company with a net loss $107 billion. In response Schon started a
major restructuring and divestiture program aimed at leading on proven strengths and having the
operational and financial flexibility to respond in a timely manner to unpredictable markets.

ACC: ACC heavily engaged in ‘vendor development’ in USA. Training suppliers was one of the
important corporate level strategy of ACC.
 Nature of the Company’s Business Level Strategy

WEI:

ACC:

 Low profile
 Building cooperative relationship with local partners.
 Low cost design, labour, and growing market.
 High percentage of the venture’s output exported
 China would be Mid-range to low-end ones suitable for China and the focus should be on
the domestic market.

Functional level Strategy

WEI:

ACC:

 Established a nationwide distribution sales and service in China.

 Advertising, campaigning was launched through television and news paper.
 Research and development Facilities in Canada, Great Britain, Japan, and the USA.
 Training the suppliers
 Coaching suppliers in materials management and handling
 Developing close working relations with the Shanghai Foreign Investment Commission.
 A customer satisfaction review board which meet on monthly basis was establish by ACC to
ensure its reputation products.

Company’s structure and Control Systems

WEI:

ACC: The board representatives from the venture’s marketing, service, distribution, management,
engineering and quality controlling department examined complains and conducted customer
survey to determine where improvement needed.

Recommendation

WEI:
ACC:

 Unskilled Suppliers should not be funded for training because of its high cost.
 Government rules and regulation should be softening.
 Training cost was high that should not be undertaken unless collecting the supplies
from other sources.
 The original feasibility study should be more consciously for the project.