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Fuyao Glass America: Sourcing Decision – Case Solution

Fuyao Glass America is a China-based automotive glass producer. It decided to expand its business to the United States. The company must decide on how to fulfill its business contracts. Should it utilize its new factory in Ohio or outsource to its factory in Tianjin, China?

​Willy Shih Harvard Business Review ( 618007-PDF-ENG ) August 10, 2017

Case questions answered:

• If the delivery of windshields will begin three years from now, compare the cost of production and delivery of windshields from Tianjin and Moraine plants.
• What are the risks and opportunities in the factors considered for sourcing?
• Would you consider shipping plate glass from China to the Moraine plant to reduce raw material costs? Why or why not?
• If you were Wen Li, which of the two sourcing options would you recommend to Cho? Justify your answer in detail.

Not the questions you were looking for? Submit your own questions & get answers .

Fuyao Glass America: Sourcing Decision Case Answers

1. if the delivery of windshields will begin three years from now, compare the cost of production and delivery of windshields from the tianjin and moraine plants of fuyao glass america..

The bill of materials cost comparison between The Tianjin factory and the Moraine, Ohio factory of Fuyao Glass America are as follows:

The total costs of the Moraine and Tianjin factories are $51.07 and $42.55, respectively. The major contribution to the costs of the Moraine factory is raw materials (44.7%), Labour costs (10.57%), SG&A, and Depreciation.

On the other hand, the high-cost contributors for the Tianjin facility are Packaging and Transportation (34.5%) and raw materials (31.2%). The total cost of the Moraine factory is greater than that of the Tianjin factory due to high raw materials, labor, and SG&A expenses.

The packaging and transportation expenses for the Tianjin factory are higher due to its location in China, with high shipping costs. Moreover, since the Tianjin factory is already established with the old assets recently replenished, its cost is also increasing.

The Ohio facility’s raw materials cost is higher due to increased input costs of the glass and other put-ins.

2. What are the risks and opportunities in the factors considered for sourcing?

The risks and opportunities in the factors considered for sourcing in each factory of Fuyao Glass America are:

Tianjin Factory

• The wage-earners are equipped with re-working skills, which improved yield by 2%.
• Trade restrictions can have a significant impact on imports from China.
• The Tianjin factory is already established, with production being run continuously (an increase of 13% in productivity in 1.5 years), so it is way ahead of the learning curve.

Opportunities:

• Implementation of newer technology will lead to

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Fuyao glass: americas sourcing decision description.

In today's global economy, what are the factors that go into production location choice? This case is set in the world's largest automotive glass producer as it expands from China into the United States. To meet a very aggressive cost target, management is faced with the alternatives of fulfilling the contract from its new Ohio factory, which can only produce above the target cost currently because it is still on a learning curve, or it can fulfill from its Tianjin, China factory which can produce below the cost target but will incur extensive shipping costs and require a far great amount of inventory holding. This case examines a core question facing managers who want to produce physical products for world markets.

Case Description Fuyao Glass: Americas Sourcing Decision

Strategic managment tools used in case study analysis of fuyao glass: americas sourcing decision, step 1. problem identification in fuyao glass: americas sourcing decision case study, step 2. external environment analysis - pestel / pest / step analysis of fuyao glass: americas sourcing decision case study, step 3. industry specific / porter five forces analysis of fuyao glass: americas sourcing decision case study, step 4. evaluating alternatives / swot analysis of fuyao glass: americas sourcing decision case study, step 5. porter value chain analysis / vrio / vrin analysis fuyao glass: americas sourcing decision case study, step 6. recommendations fuyao glass: americas sourcing decision case study, step 7. basis of recommendations for fuyao glass: americas sourcing decision case study, quality & on time delivery.

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Case Analysis of Fuyao Glass: Americas Sourcing Decision

Fuyao Glass: Americas Sourcing Decision is a Harvard Business (HBR) Case Study on Strategy & Execution , Texas Business School provides HBR case study assignment help for just $9. Texas Business School(TBS) case study solution is based on HBR Case Study Method framework, TBS expertise & global insights. Fuyao Glass: Americas Sourcing Decision is designed and drafted in a manner to allow the HBR case study reader to analyze a real-world problem by putting reader into the position of the decision maker. Fuyao Glass: Americas Sourcing Decision case study will help professionals, MBA, EMBA, and leaders to develop a broad and clear understanding of casecategory challenges. Fuyao Glass: Americas Sourcing Decision will also provide insight into areas such as – wordlist , strategy, leadership, sales and marketing, and negotiations.

Case Study Solutions Background Work

Fuyao Glass: Americas Sourcing Decision case study solution is focused on solving the strategic and operational challenges the protagonist of the case is facing. The challenges involve – evaluation of strategic options, key role of Strategy & Execution, leadership qualities of the protagonist, and dynamics of the external environment. The challenge in front of the protagonist, of Fuyao Glass: Americas Sourcing Decision, is to not only build a competitive position of the organization but also to sustain it over a period of time.

Strategic Management Tools Used in Case Study Solution

The Fuyao Glass: Americas Sourcing Decision case study solution requires the MBA, EMBA, executive, professional to have a deep understanding of various strategic management tools such as SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.

Texas Business School Approach to Strategy & Execution Solutions

In the Texas Business School, Fuyao Glass: Americas Sourcing Decision case study solution – following strategic tools are used - SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis. We have additionally used the concept of supply chain management and leadership framework to build a comprehensive case study solution for the case – Fuyao Glass: Americas Sourcing Decision

Step 1 – Problem Identification of Fuyao Glass: Americas Sourcing Decision - Harvard Business School Case Study

The first step to solve HBR Fuyao Glass: Americas Sourcing Decision case study solution is to identify the problem present in the case. The problem statement of the case is provided in the beginning of the case where the protagonist is contemplating various options in the face of numerous challenges that Produce Glass is facing right now. Even though the problem statement is essentially – “Strategy & Execution” challenge but it has impacted by others factors such as communication in the organization, uncertainty in the external environment, leadership in Produce Glass, style of leadership and organization structure, marketing and sales, organizational behavior, strategy, internal politics, stakeholders priorities and more.

Step 2 – External Environment Analysis

Texas Business School approach of case study analysis – Conclusion, Reasons, Evidences - provides a framework to analyze every HBR case study. It requires conducting robust external environmental analysis to decipher evidences for the reasons presented in the Fuyao Glass: Americas Sourcing Decision. The external environment analysis of Fuyao Glass: Americas Sourcing Decision will ensure that we are keeping a tab on the macro-environment factors that are directly and indirectly impacting the business of the firm.

What is PESTEL Analysis? Briefly Explained

PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in Fuyao Glass: Americas Sourcing Decision case study. PESTEL analysis of " Fuyao Glass: Americas Sourcing Decision" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.

How to do PESTEL / PEST / STEP Analysis? What are the components of PESTEL Analysis?

As mentioned above PESTEL Analysis has six elements – political, economic, social, technological, environmental, and legal. All the six elements are explained in context with Fuyao Glass: Americas Sourcing Decision macro-environment and how it impacts the businesses of the firm.

How to do PESTEL Analysis for Fuyao Glass: Americas Sourcing Decision

To do comprehensive PESTEL analysis of case study – Fuyao Glass: Americas Sourcing Decision , we have researched numerous components under the six factors of PESTEL analysis.

Political Factors that Impact Fuyao Glass: Americas Sourcing Decision

Political factors impact seven key decision making areas – economic environment, socio-cultural environment, rate of innovation & investment in research & development, environmental laws, legal requirements, and acceptance of new technologies.

Government policies have significant impact on the business environment of any country. The firm in “ Fuyao Glass: Americas Sourcing Decision ” needs to navigate these policy decisions to create either an edge for itself or reduce the negative impact of the policy as far as possible.

Data safety laws – The countries in which Produce Glass is operating, firms are required to store customer data within the premises of the country. Produce Glass needs to restructure its IT policies to accommodate these changes. In the EU countries, firms are required to make special provision for privacy issues and other laws.

Competition Regulations – Numerous countries have strong competition laws both regarding the monopoly conditions and day to day fair business practices. Fuyao Glass: Americas Sourcing Decision has numerous instances where the competition regulations aspects can be scrutinized.

Import restrictions on products – Before entering the new market, Produce Glass in case study Fuyao Glass: Americas Sourcing Decision" should look into the import restrictions that may be present in the prospective market.

Export restrictions on products – Apart from direct product export restrictions in field of technology and agriculture, a number of countries also have capital controls. Produce Glass in case study “ Fuyao Glass: Americas Sourcing Decision ” should look into these export restrictions policies.

Foreign Direct Investment Policies – Government policies favors local companies over international policies, Produce Glass in case study “ Fuyao Glass: Americas Sourcing Decision ” should understand in minute details regarding the Foreign Direct Investment policies of the prospective market.

Corporate Taxes – The rate of taxes is often used by governments to lure foreign direct investments or increase domestic investment in a certain sector. Corporate taxation can be divided into two categories – taxes on profits and taxes on operations. Taxes on profits number is important for companies that already have a sustainable business model, while taxes on operations is far more significant for companies that are looking to set up new plants or operations.

Tariffs – Chekout how much tariffs the firm needs to pay in the “ Fuyao Glass: Americas Sourcing Decision ” case study. The level of tariffs will determine the viability of the business model that the firm is contemplating. If the tariffs are high then it will be extremely difficult to compete with the local competitors. But if the tariffs are between 5-10% then Produce Glass can compete against other competitors.

Research and Development Subsidies and Policies – Governments often provide tax breaks and other incentives for companies to innovate in various sectors of priority. Managers at Fuyao Glass: Americas Sourcing Decision case study have to assess whether their business can benefit from such government assistance and subsidies.

Consumer protection – Different countries have different consumer protection laws. Managers need to clarify not only the consumer protection laws in advance but also legal implications if the firm fails to meet any of them.

Political System and Its Implications – Different political systems have different approach to free market and entrepreneurship. Managers need to assess these factors even before entering the market.

Freedom of Press is critical for fair trade and transparency. Countries where freedom of press is not prevalent there are high chances of both political and commercial corruption.

Corruption level – Produce Glass needs to assess the level of corruptions both at the official level and at the market level, even before entering a new market. To tackle the menace of corruption – a firm should have a clear SOP that provides managers at each level what to do when they encounter instances of either systematic corruption or bureaucrats looking to take bribes from the firm.

Independence of judiciary – It is critical for fair business practices. If a country doesn’t have independent judiciary then there is no point entry into such a country for business.

Government attitude towards trade unions – Different political systems and government have different attitude towards trade unions and collective bargaining. The firm needs to assess – its comfort dealing with the unions and regulations regarding unions in a given market or industry. If both are on the same page then it makes sense to enter, otherwise it doesn’t.

Economic Factors that Impact Fuyao Glass: Americas Sourcing Decision

Social factors that impact fuyao glass: americas sourcing decision, technological factors that impact fuyao glass: americas sourcing decision, environmental factors that impact fuyao glass: americas sourcing decision, legal factors that impact fuyao glass: americas sourcing decision, step 3 – industry specific analysis, what is porter five forces analysis, step 4 – swot analysis / internal environment analysis, step 5 – porter value chain / vrio / vrin analysis, step 6 – evaluating alternatives & recommendations, step 7 – basis for recommendations, references :: fuyao glass: americas sourcing decision case study solution.

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Fuyao Glass America Sourcing Decision Case Study solution

Introduction.

The current case solution is published by 247caseanalysis and focuses on Fuyao Glass America Sourcing Decision. The case presents an overview of the strategic and managerial issues that the Fuyao Glass America Sourcing Decision faces in the growth and development of the business. The case solution focuses on understanding the central issue(s) in the case. The case study solution then uses strategic tools and models to solve the case and makes strategic recommendations for the Fuyao Glass America Sourcing Decision (Abratt & Bendixen, 2018; Iacobucci, 2021).

The case study and the case solution for the Fuyao Glass America Sourcing Decision are intended to give a comprehensive and holistic perspective regarding real-world business situations and challenges to the reader. Like all HBS case studies, it is important for the reader to first read the case for the Fuyao Glass America Sourcing Decision. The proposed case study solution for the Fuyao Glass America Sourcing Decision has encompassed the needs of all stakeholders while addressing the central challenge effectively (Deepak & Jeyakumar, 2019).

External environment analysis

The Fuyao Glass America Sourcing Decision cannot directly influence the external environment. The Fuyao Glass America Sourcing Decision must ensure to assess and continually review the external environment to identify potential challenges and opportunities (Abratt & Bendixen, 2018). This is needed because:

The external environment is dynamic and keeps changing.

External environment factors and dynamics, directly and indirectly, influence Fuyao Glass America Sourcing Decision operations (Anthony, 2021).

PESTEL Analysis

The Fuyao Glass America Sourcing Decision needs political stability to maintain business development and growth globally.

The Fuyao Glass America Sourcing Decision must also pay heed to local and global taxation implications for operations carried on site, as well as in other countries.

The Fuyao Glass America Sourcing Decision is directly impacted by the policies and regulations devised by the governments in its host as well as home countries (Chernev, 2018).

Lower interest rates facilitate the Fuyao Glass America Sourcing Decision as it leads to increased instances of borrowing.

Lower interest rates also lead to increased consumer power, and increased demand for products of Fuyao Glass America Sourcing Decision (Deepak & Jeyakumar, 2019).

The operations and demand for Fuyao Glass America Sourcing Decision are directly influenced by the GDP and economic growth in the countries where it operates and exports (Buchanan & Huczynski, 2019).

Increased focus on education and higher literacy rates have allowed the Fuyao Glass America Sourcing Decision to benefit from a more skilled and talented labor pool.

The higher portion of the youth has also benefitted the Fuyao Glass America Sourcing Decision in creating a high demand for its products and services (Iacobucci, 2021).

Assessment of the population and consumer trends have allowed the Fuyao Glass America Sourcing Decision to refine its segmentation and targeting strategies – leading to improved positioning of its portfolio offering (De Mooij, 2019).

Technological

Fuyao Glass America Sourcing Decision has high internal innovation capabilities.

Fuyao Glass America Sourcing Decision invests in research and development for improved creativity and technological progress.

The Fuyao Glass America Sourcing Decision makes use of innovative and advanced technology to make its internal processes more efficient and work towards achieving economies of scale.

Fuyao Glass America Sourcing Decision also benefits from knowledge sharing through global operations and transfers technology internally (Baines, Fill, & Rosengren, 2017).

Environmental

The Fuyao Glass America Sourcing Decision follows and abides by environmental regulations imposed in various countries.

Consumers for Fuyao Glass America Sourcing Decision have rapidly adopted green lifestyles and green consumption.

Incorporating environmentalism into its strategic goals and direction has enabled the Fuyao Glass America Sourcing Decision to become more efficient in this resource allocation (Stead & Stead, 2014).

The Fuyao Glass America Sourcing Decision ensures to follow the equal employment and equal opportunity law.

Through the equal opportunity act and regulations, the Fuyao Glass America Sourcing Decision ensures that it does not discriminate against different groups in its HUMAN RESOURCE MANAGEMENT practices.

The Fuyao Glass America Sourcing Decision also ensures to abide by the health and safety regulations.

The Fuyao Glass America Sourcing Decision makes sure to follow regulations regarding employment contracts and employer responsibilities to ensure fair policy-making and high performance (Lasserre, 2017).

Porter Five Forces

Industry rivalry.

There is high competitiveness and rivalry in the industry.

The market is highly fragmented, which leads to increased competition for Fuyao Glass America Sourcing Decision.

The Fuyao Glass America Sourcing Decision faces industry rivals of various sizes and operations.

The competition for Fuyao Glass America Sourcing Decision is local as well as global in nature.

The increased rivalry in the industry ensures that all players, including Fuyao Glass America Sourcing Decision, offer high-quality products and services to consumers at competitive prices (Varadarajan, 2015).

The threat of new entrants

The threat of new entrants is moderate.

There are entry barriers such as government regulations and financial capital needed for setting up operations.

This ensures that only powerful players with high financial muscle enter the market where Fuyao Glass America Sourcing Decision is operating.

New entrants ensure that the Fuyao Glass America Sourcing Decision maintains its focus on competitiveness and high quality (Wunder, 2019; Abratt & Bendixen, 2018).

Threat of substitutes

The threat of substitutes is moderate to high.

There is direct well as indirect substitutes available for Fuyao Glass America Sourcing Decision offerings.

The high number of players and market fragmentation has led to the increased availability of substitutes for Fuyao Glass America Sourcing Decision products.

There are low switching costs for consumers between substitutes (Sahaf, 2019; Kotabe & Helsen, 2020).

Bargaining power of buyers

Fuyao Glass America Sourcing Decision operational a highly fragmented industry.

The bargaining power of the buyers is high.

Players, including Fuyao Glass America Sourcing Decision, do not have a retail setup (Phillips & Moutinho, 2018; Chernev, 2018).

Bargaining power of sellers

The bargaining power of suppliers is high in the industry where Fuyao Glass America Sourcing Decision operates.

There're numerous players in the industry, and suppliers have contracted with most of them.

The raw materials provided by suppliers are restricted, and limited owing to quality needs and benchmarks (Kotabe & Helsen, 2020; Joyce, 2022).

Internal environment analysis

The internal analysis allows an insight into the factors that Fuyao Glass America Sourcing Decision can directly influence. These factors and capabilities are used by the Fuyao Glass America Sourcing Decision to ensure that:

It is able to capitalize on the opportunities from the external environment.

It is able to mitigate risks and manage challenges and threats appropriately.

The Fuyao Glass America Sourcing Decision is able to set the right strategic direction and use internal capacities towards its attainment (Stead & Stead, 2014; Deepak & Jeyakumar, 2019).

The Fuyao Glass America Sourcing Decision has a strong brand image and a positive consumer perception in the market.

The Fuyao Glass America Sourcing Decision invests in research and development, which helps the company focus its new product development as well as marketing capabilities (Phillips & Moutinho, 2018).

The company has a strong financial revenue earning ability and enjoys high profits.

The Fuyao Glass America Sourcing Decision has a global distribution network, which is strong and has allowed it to enjoy high business growth.

International expansion has allowed the Fuyao Glass America Sourcing Decision to understand diverse cultures and their knees – and engage in the localization of its product portfolio (DuBrin, 2013).

The Fuyao Glass America Sourcing Decision is criticized for high prices for its product portfolio.

The company has suffered negative PR owing to the recall of some of its products which were faulty.

Despite engagement with advanced technology, Fuyao Glass America Sourcing Decision continues to use manual systems internally, which leads to time ineffectiveness (Abratt & Bendixen, 2018).

The Fuyao Glass America Sourcing Decision has an organizational culture that is resistant to change and, as a result, exhibits slow adaptation to new trends.

The product design for the Fuyao Glass America Sourcing Decision’s offerings is imitative.

The Fuyao Glass America Sourcing Decision has undifferentiated products in its portfolio with respect to the competition (Phillips & Moutinho, 2018; Baines, Fill, & Rosengren, 2017).

Opportunities

The Fuyao Glass America Sourcing Decision has the opportunity to expand to developing and emerging economies.

The Fuyao Glass America Sourcing Decision can develop outsourcing partnerships to further maintain cost-effectiveness.

The Fuyao Glass America Sourcing Decision can also engage in green production and work towards environmental sustainability (Stead & Stead, 2014; Lasserre, 2017).

The Fuyao Glass America Sourcing Decision can also develop strategic partnerships and alliances to facilitate business growth and development.

Target niche markets, and develop new products.

The Fuyao Glass America Sourcing Decision can benefit from the evolving media trends for marketing purposes – including using social media content creation to target new consumer groups (Varadarajan, 2015; Wilson, 2018).

The Fuyao Glass America Sourcing Decision is facing high competition.

The Fuyao Glass America Sourcing Decision is also experiencing high imitation of its products.

The Fuyao Glass America Sourcing Decision faces threats from the increased price volatility of raw materials as well.

The unstable government and government policies are also a threat to the operations of the Fuyao Glass America Sourcing Decision- especially internationally.

Slow change adaptation may lead the Fuyao Glass America Sourcing Decision to become an industry laggard (Anthony, 2021; Abratt & Bendixen, 2018).

Marketing mix

The product offerings by the Fuyao Glass America Sourcing Decision maintain consistently high quality.

The Fuyao Glass America Sourcing Decision engages in brand-building activities to ensure that its product and service offerings are well received by the target audience (Chernev, 2018).

Brand-building activities build positive associations for Fuyao Glass America Sourcing Decision and lead to repeat purchases as well as high consumer loyalty.

Fuyao Glass America Sourcing Decision ensures that its products are available in different SKU sizes to cater to the needs of different groups within its target audience.

The Fuyao Glass America Sourcing Decision also offers a warranty for its products (Khan, 2014).

The Fuyao Glass America Sourcing Decision ensures competitive pricing in the industry among the high number of market players.

For new products, the Fuyao Glass America Sourcing Decision maintains an introductory pricing strategy to encourage trials and purchases (Kareh, 2018).

For its star products, the company maintains penetrative pricing strategies to allow maximum trial.

For mature products, the Fuyao Glass America Sourcing Decision engages in aggressive and competitive pricing.

The Fuyao Glass America Sourcing Decision offers regular discounts to appeal to consumers, clear stocks, as well as for increasing footfall (Išoraitė, 2016).

Fuyao Glass America Sourcing Decision ensures that all its product offerings are highly accessible.

The Fuyao Glass America Sourcing Decision places products in physical retail setups like supermarkets and hypermarkets.

The Fuyao Glass America Sourcing Decision also places products with e-tailers such as amazon so consumers can easily access the products (Iacobucci, 2021).

The Fuyao Glass America Sourcing Decision also has an online system on its website for managing orders placed directly with the company.

The Fuyao Glass America Sourcing Decision has a strong distribution network, as well as competent and quick consumer service. (Kareh, 2018; Abratt & Bendixen, 2018).

The Fuyao Glass America Sourcing Decision uses traditional promotional platforms of television to reach the masses with its product portfolio.

The Fuyao Glass America Sourcing Decision also engages in radio and print promotional activities and advertisements (Deepak & Jeyakumar, 2019).

The Fuyao Glass America Sourcing Decision also uses social media to reach out to its audiences and influence them.

The Fuyao Glass America Sourcing Decision has developed expertise in interesting and relevant content creation, which attracts its primary as well as secondary target consumer groups (De Mooij, 2019).

The Fuyao Glass America Sourcing Decision frequently uses influencers to create a positive buzz and hype regarding its products, as well as to ensure high reach.

All promotional content is integrated and uses emotional appeals to create a lasting relationship with the consumers (Chernev, 2018).

The Fuyao Glass America Sourcing Decision has a strong global presence and strong business development capabilities.

The Fuyao Glass America Sourcing Decision focuses on research and development internally to identify market gaps and demands.

The Fuyao Glass America Sourcing Decision makes use of AI in its production operations and marketing functions to increase cost efficiency as well as affectivity (Dimitrieska, Stankovska, & Efremova, 2018).

The Fuyao Glass America Sourcing Decision engages and invests in acquiring advanced and progressive technology for operational efficiency. (Joyce, 2022).

The Fuyao Glass America Sourcing Decision has a strong retail setup and a strong distribution network across the globe (Gillespie & Swan, 2021; Chernev, 2018).

The Fuyao Glass America Sourcing Decision has access to unique raw materials, which helps it maintain high quality as well as differentiation in its product offerings.

The Fuyao Glass America Sourcing Decision holds special patents and licenses for manufacturing processes, as well as for being able to manufacture off-site in other countries (Grewal & Levy, 2021).

The Fuyao Glass America Sourcing Decision undertakes and participates in sustainable and eco-friendly manufacturing processes.

The Fuyao Glass America Sourcing Decision has also developed a green packaging solution for its product offerings and portfolio (Gillespie & Swan, 2021).

The leadership within the Fuyao Glass America Sourcing Decision is visionary and charismatic.

The organizational culture within Fuyao Glass America Sourcing Decision is robust, innovative and creative.

The organizational culture is based on the unique values, and implementation of the same – including transparency, honesty, and commitment (Groucutt & Hopkins, 2015).

The human resource management policies within the Fuyao Glass America Sourcing Decision support employee development and engagement – leading to high employee satisfaction and high employee morale (Machado, 2019; Anthony, 2021).

The compensation framework within the Fuyao Glass America Sourcing Decision is advanced and focuses on extrinsic as well as intrinsic drivers for employee performance.

The Fuyao Glass America Sourcing Decision enjoys high brand equity based on consistently high deliverance of product quality (Hitt, Miller, Colella, & Triana, 2017; Grewal & Levy, 2021).

The technical infrastructure within the Fuyao Glass America Sourcing Decision comprises new and advanced technology as well as network development to support its operations (Griffin, 2021)

The Fuyao Glass America Sourcing Decision has access to advanced physical infrastructure as well which helps support its technical advancements, as well as its manufacturing and related operations (Valeri, 2021)

The international exposure that the Fuyao Glass America Sourcing Decision has received owing to its expansions has allowed it to develop and apply innovation as well as new knowledge for improving existing processes and schedules within the company (Hitt, Miller, Colella, & Triana, 2017; Abratt & Bendixen, 2018; Valeri, 2021).

Value chain

The core capabilities and strengths of the Fuyao Glass America Sourcing Decision have enabled it to overcome obstacles and challenges and achieve its strategic goals and targets.

The core strengths and competencies of Fuyao Glass America Sourcing Decision form an important part of the company’s value chain (Chernev, 2018; Anthony, 2021).

Primary activities

Fuyao Glass America Sourcing Decision works directly and owns part of its operations in the value chain.

The Fuyao Glass America Sourcing Decision also works through different third parties as well as contracts with other parties for managing operations in other countries (Anthony, 2021).

For inbound logistics, the Fuyao Glass America Sourcing Decision ensures that all raw materials are transferred to warehouses and manufacturing sites in a timely fashion using company-owned transportation.

The Fuyao Glass America Sourcing Decision manages its operations directly as well as through third parties.

The operations of the Fuyao Glass America Sourcing Decision are spanned in its hometown as well as conducted overseas at other locations (Deepak & Jeyakumar, 2019).

In offshore countries, the Fuyao Glass America Sourcing Decision manages operations through partners and agents – who look after distribution and marketing activities for the Fuyao Glass America Sourcing Decision.

The Fuyao Glass America Sourcing Decision engages in invested marketing activities – based on consumer and market research (Dimitrieska, Stankovska, & Efremova, 2018; Chernev, 2018).

The Fuyao Glass America Sourcing Decision also makes use of AI for its marketing and promotional activities.

The Fuyao Glass America Sourcing Decision regularly trains its employees to develop skills regarding consumer service.

The Fuyao Glass America Sourcing Decision has maintained strict policies regarding consumer service as well as ensuring high quality and increased customer satisfaction (Joyce, 2022).

Secondary activities

The Fuyao Glass America Sourcing Decision has a strong human resource management department, regulated by modern policies and practices.

The human resource management department at the Fuyao Glass America Sourcing Decision supports the organizational culture and the leadership through its various functions – such as hiring, training and compensation management (DuBrin, 2013).

The Fuyao Glass America Sourcing Decision makes use of advanced technology to support its operations and achieve strategic goals and targets (DuBrin, 2013; Joyce, 2022).

The advanced technology is acquired internationally (Iacobucci, 2021).

The Fuyao Glass America Sourcing Decision engages in regulated procurement with selected suppliers.

The Fuyao Glass America Sourcing Decision ensures its contracted suppliers provide consistently high-quality raw materials to maintain high quality for end consumers (Gillespie & Swan, 2021).

The Fuyao Glass America Sourcing Decision is used to resolve its managerial and strategic challenges using one of the following strategies.

The strategies recommended will allow the Fuyao Glass America Sourcing Decision to expand and develop, as well as manage its risks and challenges effectively.

Using these strategies, the Fuyao Glass America Sourcing Decision will also be able to remain competitive in the market.

Market development strategies

The Fuyao Glass America Sourcing Decision can engage in informative and emotional marketing to appeal to the target audience in the market and increase brand awareness.

The Fuyao Glass America Sourcing Decision can devise and run educational campaigns to help understand the importance of the product, and its need (Išoraitė, 2016).

The Fuyao Glass America Sourcing Decision can work with influencers and celebrities to help spread the message through social media as well as conventional media.

The Fuyao Glass America Sourcing Decision can use a team on the ground to interact with the target audience, brief them about the product and its benefits, and influence them positively towards purchase decisions. (Baines, Fill, & Rosengren, 2017).

Market penetration strategies

The Fuyao Glass America Sourcing Decision can increase its marketing spending and use emotional appeals to influence the target audience.

The marketing strategies should be focused on maximizing the reach of the brand's message and promise (Iacobucci, 2021).

The Fuyao Glass America Sourcing Decision is recommended to make its products accessible through an increased number of supermarkets and hypermarkets.

The Fuyao Glass America Sourcing Decision can also open its own retail setups to increase footfall and reach across different regions (Sahaf, 2019).

Product development strategies

The Fuyao Glass America Sourcing Decision is recommended to and can engage in market and consumer research for product development.

Encouraging innovation and discussion of new ideas within the Fuyao Glass America Sourcing Decision can also lead to rapid new product development (Varadarajan, 2015).

The Fuyao Glass America Sourcing Decision can also optimize the development of new products by making its manufacturing and testing processes more effective.

The Fuyao Glass America Sourcing Decision can also create innovation labs and labs for new product development and testing (Sahaf, 2019; Abratt & Bendixen, 2018).

Diversification strategies

The Fuyao Glass America Sourcing Decision can expand horizontally and add new product lines.

The Fuyao Glass America Sourcing Decision can also expand vertically and add new products to the existing product line

The diversification will allow the Fuyao Glass America Sourcing Decision to attract new consumer groups (De Mooij, 2019).

The diversification will also allow the Fuyao Glass America Sourcing Decision to increase its penetration and reach amongst existing consumers.

The Fuyao Glass America Sourcing Decision will be able to increase brand awareness through diversification as well (Iacobucci, 2021; Abratt & Bendixen, 2018).

The Fuyao Glass America Sourcing Decision needs to strategically align its resources for optimization and to achieve its strategic goals and targets. The Fuyao Glass America Sourcing Decision should continue to use its internal capabilities to realize new opportunities and for mitigating risks and weaknesses. In addition, the Fuyao Glass America Sourcing Decision should also make use of other strategic models to understand the managerial challenges that the organization faces and devise suitable strategies and actions for overcoming them. The leadership of the Fuyao Glass America Sourcing Decision will play a critical role in ensuring that the organization overcomes the challenges by focusing on the organizational culture and values, which will then impact the operations and performance at large.

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Dimitrieska, S., Stankovska, A., & Efremova, T. (2018). Artificial intelligence and marketing. Entrepreneurship, 6(2), 298-304.

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• October 2017 (Revised September 2022)
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Fuyao Glass America: Sourcing Decision

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Fuyao Glass America Sourcing Decision Case Analysis and Case Solution

Posted by Peter Williams on Aug-09-2018

Introduction of Fuyao Glass America Sourcing Decision Case Solution

The Fuyao Glass America Sourcing Decision case study is a Harvard Business Review case study, which presents a simulated practical experience to the reader allowing them to learn about real life problems in the business world. The Fuyao Glass America Sourcing Decision case consisted of a central issue to the organization, which had to be identified, analysed and creative solutions had to be drawn to tackle the issue. This paper presents the solved Fuyao Glass America Sourcing Decision case analysis and case solution. The method through which the analysis is done is mentioned, followed by the relevant tools used in finding the solution.

The case solution first identifies the central issue to the Fuyao Glass America Sourcing Decision case study, and the relevant stakeholders affected by this issue. This is known as the problem identification stage. After this, the relevant tools and models are used, which help in the case study analysis and case study solution. The tools used in identifying the solution consist of the SWOT Analysis, Porter Five Forces Analysis, PESTEL Analysis, VRIO analysis, Value Chain Analysis, BCG Matrix analysis, Ansoff Matrix analysis, and the Marketing Mix analysis. The solution consists of recommended strategies to overcome this central issue. It is a good idea to also propose alternative case study solutions, because if the main solution is not found feasible, then the alternative solutions could be implemented. Lastly, a good case study solution also includes an implementation plan for the recommendation strategies. This shows how through a step-by-step procedure as to how the central issue can be resolved.

Problem Identification of Fuyao Glass America Sourcing Decision Case Solution

Harvard Business Review cases involve a central problem that is being faced by the organization and these problems affect a number of stakeholders. In the problem identification stage, the problem faced by Fuyao Glass America Sourcing Decision is identified through reading of the case. This could be mentioned at the start of the reading, the middle or the end. At times in a case analysis, the problem may be clearly evident in the reading of the HBR case. At other times, finding the issue is the job of the person analysing the case. It is also important to understand what stakeholders are affected by the problem and how. The goals of the stakeholders and are the organization are also identified to ensure that the case study analysis are consistent with these.

Analysis of the Fuyao Glass America Sourcing Decision HBR Case Study

The objective of the case should be focused on. This is doing the Fuyao Glass America Sourcing Decision Case Solution. This analysis can be proceeded in a step-by-step procedure to ensure that effective solutions are found.

• In the first step, a growth path of the company can be formulated that lays down its vision, mission and strategic aims. These can usually be developed using the company history is provided in the case. Company history is helpful in a Business Case study as it helps one understand what the scope of the solutions will be for the case study.
• The next step is of understanding the company; its people, their priorities and the overall culture. This can be done by using company history. It can also be done by looking at anecdotal instances of managers or employees that are usually included in an HBR case study description to give the reader a real feel of the situation.
• Lastly, a timeline of the issues and events in the case needs to be made. Arranging events in a timeline allows one to predict the next few events that are likely to take place. It also helps one in developing the case study solutions. The timeline also helps in understanding the continuous challenges that are being faced by the organisation.

SWOT analysis of Fuyao Glass America Sourcing Decision

An important tool that helps in addressing the central issue of the case and coming up with Fuyao Glass America Sourcing Decision HBR case solution is the SWOT analysis.

• The SWOT analysis is a strategic management tool that lists down in the form of a matrix, an organisation's internal strengths and weaknesses, and external opportunities and threats. It helps in the strategic analysis of Fuyao Glass America Sourcing Decision.
• Once this listing has been done, a clearer picture can be developed in regards to how strategies will be formed to address the main problem. For example, strengths will be used as an advantage in solving the issue.

Therefore, the SWOT analysis is a helpful tool in coming up with the Fuyao Glass America Sourcing Decision Case Study answers. One does not need to remain restricted to using the traditional SWOT analysis, but the advanced TOWS matrix or weighted average SWOT analysis can also be used.

Porter Five Forces Analysis for Fuyao Glass America Sourcing Decision

Another helpful tool in finding the case solutions is of Porter's Five Forces analysis. This is also a strategic tool that is used to analyse the competitive environment of the industry in which Fuyao Glass America Sourcing Decision operates in. Analysis of the industry is important as businesses do not work in isolation in real life, but are affected by the business environment of the industry that they operate in. Harvard Business case studies represent real-life situations, and therefore, an analysis of the industry's competitive environment needs to be carried out to come up with more holistic case study solutions. In Porter's Five Forces analysis, the industry is analysed along 5 dimensions.

• These are the threats that the industry faces due to new entrants.
• It includes the threat of substitute products.
• It includes the bargaining power of buyers in the industry.
• It includes the bargaining power of suppliers in an industry.
• Lastly, the overall rivalry or competition within the industry is analysed.

This tool helps one understand the relative powers of the major players in the industry and its overall competitive dynamics. Actionable and practical solutions can then be developed by keeping these factors into perspective.

PESTEL Analysis of Fuyao Glass America Sourcing Decision

Another helpful tool that should be used in finding the case study solutions is the PESTEL analysis. This also looks at the external business environment of the organisation helps in finding case study Analysis to real-life business issues as in HBR cases.

• The PESTEL analysis particularly looks at the macro environmental factors that affect the industry. These are the political, environmental, social, technological, environmental and legal (regulatory) factors affecting the industry.
• Factors within each of these 6 should be listed down, and analysis should be made as to how these affect the organisation under question.
• These factors are also responsible for the future growth and challenges within the industry. Hence, they should be taken into consideration when coming up with the Fuyao Glass America Sourcing Decision case solution.

VRIO Analysis of Fuyao Glass America Sourcing Decision

This is an analysis carried out to know about the internal strengths and capabilities of Fuyao Glass America Sourcing Decision. Under the VRIO analysis, the following steps are carried out:

• The internal resources of Fuyao Glass America Sourcing Decision are listed down.
• Each of these resources are assessed in terms of the value it brings to the organization.
• Each resource is assessed in terms of how rare it is. A rare resource is one that is not commonly used by competitors.
• Each resource is assessed whether it could be imitated by competition easily or not.
• Lastly, each resource is assessed in terms of whether the organization can use it to an advantage or not.

The analysis done on the 4 dimensions; Value, Rareness, Imitability, and Organization. If a resource is high on all of these 4, then it brings long-term competitive advantage. If a resource is high on Value, Rareness, and Imitability, then it brings an unused competitive advantage. If a resource is high on Value and Rareness, then it only brings temporary competitive advantage. If a resource is only valuable, then it’s a competitive parity. If it’s none, then it can be regarded as a competitive disadvantage.

Value Chain Analysis of Fuyao Glass America Sourcing Decision

The Value chain analysis of Fuyao Glass America Sourcing Decision helps in identifying the activities of an organization, and how these add value in terms of cost reduction and differentiation. This tool is used in the case study analysis as follows:

• The firm’s primary and support activities are listed down.
• Identifying the importance of these activities in the cost of the product and the differentiation they produce.
• Lastly, differentiation or cost reduction strategies are to be used for each of these activities to increase the overall value provided by these activities.

Recognizing value creating activities and enhancing the value that they create allow Fuyao Glass America Sourcing Decision to increase its competitive advantage.

BCG Matrix of Fuyao Glass America Sourcing Decision

The BCG Matrix is an important tool in deciding whether an organization should invest or divest in its strategic business units. The matrix involves placing the strategic business units of a business in one of four categories; question marks, stars, dogs and cash cows. The placement in these categories depends on the relative market share of the organization and the market growth of these strategic business units. The steps to be followed in this analysis is as follows:

• Identify the relative market share of each strategic business unit.
• Identify the market growth of each strategic business unit.
• Place these strategic business units in one of four categories. Question Marks are those strategic business units with high market share and low market growth rate. Stars are those strategic business units with high market share and high market growth rate. Cash Cows are those strategic business units with high market share and low market growth rate. Dogs are those strategic business units with low market share and low growth rate.
• Relevant strategies should be implemented for each strategic business unit depending on its position in the matrix.

The strategies identified from the Fuyao Glass America Sourcing Decision BCG matrix and included in the case pdf. These are either to further develop the product, penetrate the market, develop the market, diversification, investing or divesting.

Ansoff Matrix of Fuyao Glass America Sourcing Decision

Ansoff Matrix is an important strategic tool to come up with future strategies for Fuyao Glass America Sourcing Decision in the case solution. It helps decide whether an organization should pursue future expansion in new markets and products or should it focus on existing markets and products.

• The organization can penetrate into existing markets with its existing products. This is known as market penetration strategy.
• The organization can develop new products for the existing market. This is known as product development strategy.
• The organization can enter new markets with its existing products. This is known as market development strategy.
• The organization can enter into new markets with new products. This is known as a diversification strategy.

The choice of strategy depends on the analysis of the previous tools used and the level of risk the organization is willing to take.

Marketing Mix of Fuyao Glass America Sourcing Decision

Fuyao Glass America Sourcing Decision needs to bring out certain responses from the market that it targets. To do so, it will need to use the marketing mix, which serves as a tool in helping bring out responses from the market. The 4 elements of the marketing mix are Product, Price, Place and Promotions. The following steps are required to carry out a marketing mix analysis and include this in the case study analysis.

• Analyse the company’s products and devise strategies to improve the product offering of the company.
• Analyse the company’s price points and devise strategies that could be based on competition, value or cost.
• Analyse the company’s promotion mix. This includes the advertisement, public relations, personal selling, sales promotion, and direct marketing. Strategies will be devised which makes use of a few or all of these elements.
• Analyse the company’s distribution and reach. Strategies can be devised to improve the availability of the company’s products.

Fuyao Glass America Sourcing Decision Blue Ocean Strategy

The strategies devised and included in the Fuyao Glass America Sourcing Decision case memo should have a blue ocean strategy. A blue ocean strategy is a strategy that involves firms seeking uncontested market spaces, which makes the competition of the company irrelevant. It involves coming up with new and unique products or ideas through innovation. This gives the organization a competitive advantage over other firms, unlike a red ocean strategy.

Competitors analysis of Fuyao Glass America Sourcing Decision

The PESTEL analysis discussed previously looked at the macro environmental factors affecting business, but not the microenvironmental factors. One of the microenvironmental factors are competitors, which are addressed by a competitor analysis. The Competitors analysis of Fuyao Glass America Sourcing Decision looks at the direct and indirect competitors within the industry that it operates in.

• This involves a detailed analysis of their actions and how these would affect the future strategies of Fuyao Glass America Sourcing Decision.
• It involves looking at the current market share of the company and its competitors.
• It should compare the marketing mix elements of competitors, their supply chain, human resources, financial strength etc.
• It also should look at the potential opportunities and threats that these competitors pose on the company.

Organisation of the Analysis into Fuyao Glass America Sourcing Decision Case Study Solution

Once various tools have been used to analyse the case, the findings of this analysis need to be incorporated into practical and actionable solutions. These solutions will also be the Fuyao Glass America Sourcing Decision case answers. These are usually in the form of strategies that the organisation can adopt. The following step-by-step procedure can be used to organise the Harvard Business case solution and recommendations:

• The first step of the solution is to come up with a corporate level strategy for the organisation. This part consists of solutions that address issues faced by the organisation on a strategic level. This could include suggestions, changes or recommendations to the company's vision, mission and its strategic objectives. It can include recommendations on how the organisation can work towards achieving these strategic objectives. Furthermore, it needs to be explained how the stated recommendations will help in solving the main issue mentioned in the case and where the company will stand in the future as a result of these.
• The second step of the solution is to come up with a business level strategy. The HBR case studies may present issues faced by a part of the organisation. For example, the issues may be stated for marketing and the role of a marketing manager needs to be assumed. So, recommendations and suggestions need to address the strategy of the marketing department in this case. Therefore, the strategic objectives of this business unit (Marketing) will be laid down in the solutions and recommendations will be made as to how to achieve these objectives. Similar would be the case for any other business unit or department such as human resources, finance, IT etc. The important thing to note here is that the business level strategy needs to be aligned with the overall corporate strategy of the organisation. For example, if one suggests the organisation to focus on differentiation for competitive advantage as a corporate level strategy, then it can't be recommended for the Fuyao Glass America Sourcing Decision Case Study Solution that the business unit should focus on costs.
• The third step is not compulsory but depends from case to case. In some HBR case studies, one may be required to analyse an issue at a department. This issue may be analysed for a manager or employee as well. In these cases, recommendations need to be made for these people. The solution may state that objectives that these people need to achieve and how these objectives would be achieved.

The case study analysis and solution, and Fuyao Glass America Sourcing Decision case answers should be written down in the Fuyao Glass America Sourcing Decision case memo, clearly identifying which part shows what. The Fuyao Glass America Sourcing Decision case should be in a professional format, presenting points clearly that are well understood by the reader.

Alternate solution to the Fuyao Glass America Sourcing Decision HBR case study

It is important to have more than one solution to the case study. This is the alternate solution that would be implemented if the original proposed solution is found infeasible or impossible due to a change in circumstances. The alternate solution for Fuyao Glass America Sourcing Decision is presented in the same way as the original solution, where it consists of a corporate level strategy, business level strategy and other recommendations.

Implementation of Fuyao Glass America Sourcing Decision Case Solution

The case study does not end at just providing recommendations to the issues at hand. One is also required to provide how these recommendations would be implemented. This is shown through a proper implementation framework. A detailed implementation framework helps in distinguishing between an average and an above average case study answer. A good implementation framework shows the proposed plan and how the organisations' resources would be used to achieve the objectives. It also lays down the changes needed to be made as well as the assumptions in the process.

• A proper implementation framework shows that one has clearly understood the case study and the main issue within it.
• It shows that one has been clarified with the HBR fundamentals on the topic.
• It shows that the details provided in the case have been properly analysed.
• It shows that one has developed an ability to prioritise recommendations and how these could be successfully implemented.
• The implementation framework also helps by removing out any recommendations that are not practical or actionable as these could not be implemented. Therefore, the implementation framework ensures that the solution to the Fuyao Glass America Sourcing Decision Harvard case is complete and properly answered.

Recommendations and Action Plan for Fuyao Glass America Sourcing Decision case analysis

For Fuyao Glass America Sourcing Decision, based on the SWOT Analysis, Porter Five Forces Analysis, PESTEL Analysis, VRIO analysis, Value Chain Analysis, BCG Matrix analysis, Ansoff Matrix analysis, and the Marketing Mix analysis, the recommendations and action plan are as follows:

• Fuyao Glass America Sourcing Decision should focus on making use of its strengths identified from the VRIO analysis to make the most of the opportunities identified from the PESTEL.
• Fuyao Glass America Sourcing Decision should enhance the value creating activities within its value chain.
• Fuyao Glass America Sourcing Decision should invest in its stars and cash cows, while getting rid of the dogs identified from the BCG Matrix analysis.
• To achieve its overall corporate and business level objectives, it should make use of the marketing mix tools to obtain desired results from its target market.

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Fuyao Glass America Sourcing Decision Case Study Solution Analysis

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China-based Fuyao Glass Considers Manufacturing in the U.S.

Not many Chinese companies open manufacturing facilities in the U.S., but automotive glass maker Fuyao is considering just that, in Harvard Business School professor Willy...

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Not many Chinese companies open manufacturing facilities in the U.S., but automotive glass maker Fuyao is considering just that. Harvard Business School professor Willy Shih examines the factors that go into deciding where companies should locate production facilities. The case, “ Fuyao Glass America: Sourcing Decision ,” focuses on the world’s second largest automotive glass producer as it expands from China into the U.S. and explores a core question facing managers who want to produce physical products for world markets. To meet a very aggressive cost target, management is faced with two options: fulfilling its contract with its new Ohio factory or its factory based out of Tianjin, China. Unlike the Ohio factory, the Chinese factory produces below the cost target, but it also incurs extensive shipping costs and requires a far greater amount of inventory holding.

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BRIAN KENNY: During the run up to the 2016 presidential election, candidate Donald Trump promised to reinvigorate the economy by bringing American manufacturing jobs back to the U.S. It was the cornerstone of his Make America Great campaign. Three years later, the results are mixed. The New York Times reports that companies have relocated just under 145,000 factory jobs to the U.S. On the other hand, the administration’s trade war with China may have undercut those gains by compelling some U.S. companies to move their manufacturing operations from China to other Asian countries with low cost labor and easier access to Asian markets. In a highly polarized political environment, there is considerable debate over how to measure the effect of any reshoring trends by U.S. companies. But this isn’t just a concern for U.S. business leaders, the repatriation of American firms and the U.S. China trade war, have business leaders around the world grappling with the complexities of moving operations in a tightly woven global economy. Bottom line, it’s really complicated. Today we’ll hear from professor Willy Shih, about his case entitled, Fuyao Glass America: Sourcing Decision. I’m your host, Brian Kenny, and you’re listening to Cold Call , recorded live in Klarman Hall Studio at Harvard Business School.

BRIAN KENNY: Professor Shih is an expert in manufacturing and product development who also spent 28 years in industry at some of the largest technology firms in the world. And you know your way around a manufacturing floor. Is that right, Willy?

WILLY SHIH: Well, I’ve seen quite a few, so some people think I’m an expert.

BRIAN KENNY: And we’re going to talk about that more today. Thanks for joining me.

WILLY SHIH: Oh my pleasure. Thank you for having me.

BRIAN KENNY: We’ve had you on the show before, so I’m glad that you came back. I thought this case was really interesting because it kind of flips the script a little bit on the repatriation of companies to the U.S. Because here we have a Chinese company making the very same complicated decision, but from the other side of the Pacific. So I thought that was kind of an interesting flip on this. But let me ask you this, to start the way we always do, can you tell us what’s happening as the case opens? Who’s the protagonist and what’s on her mind?

WILLY SHIH: The case is actually Wen Li, who is the protagonist, who is the global sales manager for Fuyao Glass and she is preparing for a meeting with the chairman. And the question is really, they have opened this new factory in Moraine, Ohio and they are a Chinese company. Most of their other factories are in China and they’ve made some ventures abroad. But this factory in Moraine was really their stake in the American market. And so the question in front of her is, they have just won a new bid, which they priced very aggressively, should they supply it out of Ohio, which is more expensive at the moment or should they supply it out of China, where they actually have very established, mature facilities and they can deliver it at a much lower cost.

BRIAN KENNY: And that raises a whole host of issues that we’re going to get into that I thought were really interesting and sort of unintended consequences of some of the decisions that business leaders are being forced to make these days in the current environment. But I’m wondering, how did you hear about Fuyao? What prompted you to write the case and how does it relate to the work that you do here at Harvard Business School?

WILLY SHIH: What I was looking for as I was looking for a case that would teach about sort of the fundamental tenets of trade and globalization. Right, so we were looking for something that would illustrate those core issues, tradability of goods, to what extent do I need to manufacture something locally that I’m going to consume locally or can I make it in some other part of the world? The notion of labor arbitrage. When I have labor costs in one part of the world, which are very different than where I might want to sell, does it make sense to ship product long distances to do that? And then the third question that we really wanted to teach was about the tradeoff between using more labor or using more capital. And this is heavily influenced by your local labor costs and market conditions, to what extent do I invest more in automation? Or would I rather do more with labor because labor is less expensive and more flexible? We wanted to illustrate those three concepts. Okay. And what appealed to me about the Fuyao setting is, it’s the traditional offshoring narrative. It’s about a company that is trying to move jobs and manufacturing from its home base to another country. And it faces all the same challenges. The very popular narrative we heard in America for the last 15 years in particular, except it’s reversed. Here’s a Chinese company offshoring jobs to the U.S. and the chairman in China, by the way, is facing the same type of political issues there. How could you be shipping Chinese jobs to America? But it illustrates all those same key concepts that we wanted to in a narrative that’s just backwards.

BRIAN KENNY: So let’s talk about Fuyao. They make glass, they make glass for cars, at least in the case they may make glass for other things as well.

WILLY SHIH: Fuyao is an automotive glass maker and so they focus only on the automotive glass market. Automotive glasses are a little different than the type of glass that you have for windows. Window glass is normally are just flat sheets of glass, it’s made by a process called Float Glass, The Pilkington Float Glass Process. When you make automotive glass, usually what you have to do is you have to first cut it and shape it to match the style of the vehicle. So every vehicle that’s produced, usually, you have to produce custom cut windows for that vehicle. And then the other thing you have to do is you have to treat it specially. So for example your front windshield is safety glass. So that’s actually two sheets of glass with a layer of a polymer in between so that if you strike it with some object, it won’t shatter, rather it’ll hold all the shards of glass in place. So there’s an assembly process associated with it. And then there’s also the tempering process where you really try to change the physical properties of the glass through a heat cycling so that it won’t shatter on impact, it’ll be stronger. So you start with float glasses, the raw material, and then you bend it and you cut it and you do these various processes. And then also you will add things like features, right? So for example, sometimes you want to embed heating wires in it so you can have defrosting. Or some of the newer windshields now will have moisture sensors embedded in them to trigger your windshield wipers and things like that. So there’s lots of features as well.

BRIAN KENNY: Even displays…

WILLY SHIH: Even displays.

BRIAN KENNY: My side mirrors tell me if there’s a car in the lane before I change.

WILLY SHIH: Right. So then what you can do is you can embed features like that. So Fuyao is a specialist, okay. And at the time of the case, they had almost 65% market share in China of all the automotive glass sold in China. Now that’s particularly significant because at the time of the case, China was already the largest automotive market in the world. At the time of the case, China was around 28 million vehicles produced and sold every year, whereas the U.S. is typically around 16 to 17 million vehicles sold per year. But we only manufacture 11 million and change in the U.S. and the rest are imported. So from a manufacturing scale standpoint, China is actually much larger market.

BRIAN KENNY: And I’m sure a lot of people listening to our conversation are driving in their cars. I would just say, look around you, there’s so much glass in a car. Until I read the case, I hadn’t really thought about that. And then I was still driving home after reading the case and I thought, “Wow, this thing is probably 50% glass it seems like-”

WILLY SHIH: Well, there’s a lot of glass, there’s increasing use of glass in fact, especially for skylights, there are some vehicles who have very large skylights. And so you can imagine the kind of the mechanical strength you need to have for that. But then also if you look at the side windows, there’s a lot of complexity. You have a lot of these corner cuts and a lot of curve shaping and stuff. So there’s actually quite a bit of manufacturing complexity because for each set of auto glass for a vehicle program, right. So for an individual model car, you have to do a set of molds and you have to do custom cutting and you have to make it match that particular vehicle. So each one of these orders and this case concerns the particular order for the glass set for a particular model. Once you win that, then you have to have a production plan and you then have to choose which factory you want to source it from because the auto maker will expect to work with that line in that factory for the life of that model.

BRIAN KENNY: What was it like on the manufacturing room floor?

WILLY SHIH: So, I’ve been in several of the Fuyao factories. For example, the one in Moraine is an enormous facility. If you think about the processes that you need to make all these parts, you have raw glass coming in to Moraine and it’s trucked in from a factory in Mount Zion, Illinois, for the case of Ohio, but then you have cutting and you have washing. You have a lot of automated tools which will handle those sheets because frankly, handling sheets of glass like that is not easy. And for the volumes that people are talking about, you like to have some automation. So you’ll have initial cutting and washing, you’ll have long lines where machines will handle the bending of the glass. And then eventually you’ll cut them to shape and then you’ll have a separate lines where you’ll say, I’ll make the front windshields, where I’m going to take two pieces that are cut to match. And then workers will grab first the first layer, and they’ll put a sheet of that plastic in between, they’ll put a second layer of glass on and then they’ll trim it and set it up to go into an oven where I can heat it to fuse everything together. So it takes quite a bit of space. If you look in the factory in China versus the factory in Ohio, because labor is more expensive in Ohio, they’ve chosen to automate more steps. In China, for example, there’ll be more workers handling windshields or window parts, whereas in Ohio there’s a kind of more machine automation. And Ohio is also a newer plant.

BRIAN KENNY: Which is another sort of dimension to the whole bringing jobs back to the U.S. Automation obviously is having a big impact on how many jobs, how many workers are needed to perform a produce a product or perform a task.

WILLY SHIH: Right. Labor is much more expensive in the U.S. so it’s easier for a manufacturer to justify more investments than automation.

BRIAN KENNY: How much more expensive is it? The case gets into, does it?

WILLY SHIH: Well, the case talks about it and the case talks about the labor rate differential being about 7:1. It’s down considerably from the early 2000s when a typical labor rate ratio would be 10:1 maybe even 20:1. That gap has certainly narrowed.

BRIAN KENNY: What about the raw materials that are needed to make the glass?

WILLY SHIH: Well, raw materials are pretty basic for glass, it’s basically purified sand, limestone and some other materials. Okay. And so the key raw material for auto glass is something called float glass. Okay. And that’s something where you mix sand and other minor elements and you fuse them in a hot oven and then you pour it into a bath of molten tin. The glass then just kind of floats off that onto a line where you try to control the thickness and you use the molten tin as a way of having a very flat surface and not requiring a lot of polishing. And that was a process developed by the Pilkington Company in the UK, it’s called the Pilkington Flood Glass Process. It’s widely used by most glass manufacturers. In the case of Fuyao, they have their own float glass plants because they believe very much in vertical integration. So they’ll make their own float glass. They have their own sand mines in China. Right. Because they want to control all that

BRIAN KENNY: So, this becomes one of the considerations obviously, that they have to think about when they think about where to locate this plant. So why don’t we dive into that, that set of questions specifically. First of all, I’m just curious about Wen Li’s background, I mean this is obviously a big job, big decisions with big consequences. How did she prepare for that?

WILLY SHIH: It is a big job. She actually started out as a consultant, but her father had a family business in Shandong Province in China and he had a health emergency. And I’ve never delved into the details of that, but this family business was a printing and packaging business. And so when he had this health emergency, she had to step in, for a number of years she was running that business, which was actually great training for her. She told me that she had to do a lot of restructuring of that business and really get it into profitability. She then got recruited into Fuyao and as I mentioned, one of her early tasks was when the Beijing government told them they had to move this factory to Tianjin. So she really worked closely with the Tianjin government and then with the team in setting up that whole Tianjin facility.

BRIAN KENNY: So now she’s thrust into a different situation where she has to make a recommendation to the owner of the company about where to locate this plant, what are some of the things that she has to consider?

WILLY SHIH: Well, I think the key questions really revolve around the costs. If you look at the Moraine factory, it’s relatively new, it’s still in its ramp up phase. For this particular order that they want, that they are looking at, the cost to produce it in Moraine is roughly 50% higher than it would be to produce it in Tianjin for example. It’s considerably cheaper to produce it in Tianjin and ship it than it is to produce it in Moraine. But the Tianjin factory is quite mature. They’ve gotten better in their yields, they’ve gotten better in their labor efficiency and all those metrics which contribute to cost, whereas Moraine is still coming up the learning curve. And I think the key question is, do I bet that they’re going to get there? And potentially lose money on this contract if they don’t get there? Or it takes them longer, or do I go with a safe thing and stick with Tianjin and source it from China. Now they’re already doing other business in Moraine, so it’s not like there’s no work for the factory in Moraine. It’s more kind of an incremental order that they bid very aggressively for, and so where should I put it?

BRIAN KENNY: So, they have a lot of stake there though because they did bid aggressively for this and they’ve got to prove that they can do it. How guaranteed is it that those pieces of glass are ever going to get across the ocean and to where they need to be in time to meet the order?

WILLY SHIH: Well, that’s one of the other challenges facing them, right? Because if I source this glass from Tianjin, and by the way, they have been supplying U.S. and European makers for a while, even before they had this factory in Moraine. So they have been shipping auto glass around the world, but it takes some amount of time. So I am going to have inventory in my pipeline and that subjects me to a lot of risks. Maybe there’s a longshoreman strike that holds up my inventory clearing customs and coming into the country. Maybe the U.S. has an administration that decides they’re going to apply tariffs to it. Okay. So that my costs go up.

BRIAN KENNY: That could happen.

WILLY SHIH: If you’re a company that is a supplier to one of the big three U.S. automakers or to a number of other automakers, I know somebody who is intimately familiar with some of these contracts. Tariffs are the responsibility of the supplier. If you’re General Motors, that’s not your problem. Because in your purchasing agreement you say two years supplier, if you have to pay tariffs it’s your problem. That’s not what is in the cost that I will be prepared to absorb. Right. So, that’s a risk. In some sense you have to give the chairman of Fuyao some amount of credit for building this factory in Moraine, actually well ahead of when the trade war really got heated up. In some respects, and I’ve talked to him about that, he was in a hurry to do it. And I would say, they were ahead of the curve in that thought process.

BRIAN KENNY: I want to talk about this from the customer’s perspective. So if I’m GM and I’m entertaining bids from different suppliers, do I have a say on this and how much do I care about where they’re sourcing the materials as long as I’ve got this ironclad guarantee that I’m going to get my stuff when I need it.

WILLY SHIH: A company like a GM or any of the major automakers, what they want is they want a quality product, at the right price, delivered dependably. So you can imagine every car out there needs its windshield and its windows. So if you are not able to deliver on time exactly when they need it, you’re going to stop their production line. So the major automakers often impose very stiff fines, if you’re unable to deliver. It could cost you $1 million a day if you shut down somebody’s production line. But if you step back and say, as a major automaker, what does that really mean? It means I need suppliers who can really be good partners for me. Oftentimes they’ll say, I want you for a particular model or maybe a range of models. I want you to source it locally. Some other automakers like BMW, for example, will say, I want you to source from these plants around the world to supply my plants around the world and they will designate ones that they have inspected that they’re comfortable with. Right. So your customers have actually a fair amount of influence in terms of where they would like you to manufacture a particular order or a particular set of products.

BRIAN KENNY: How crowded is this marketplace? Who competes with Fuyao?

WILLY SHIH: Well, Fuyao is a pretty big player in China. They’re relatively smaller elsewhere. They’re trying to grow to become a global player. Other companies that you would typically find in the U.S. would be companies like Guardian Industries. Okay. Or Saint-Gobain, which is a very large global player. Asahi Glass, Nippon Sheet Glass. So there are other manufacturers out there, many of them tend to be kind of regional rather than global. Saint-Gobain is fairly global, but you see a lot of regional players.

BRIAN KENNY: So, the experience of knowing how to operate in overseas markets, whether it’s in the direction of China to the U.S. or the other way around, it’s pretty valuable.

WILLY SHIH: Yes. I think it’s very valuable in this industry in particular.

BRIAN KENNY: Have you discussed this in class?

WILLY SHIH: We just taught the case yesterday. One of the surprises to me was a reticence amongst students to have long supply chains. Okay. And it wasn’t pervasive by any means, but I saw to me a surprising number of people who were not big fans of global sourcing and long supply chains. Now having said that, I also had students in my classes who have worked at companies like at Apple. Okay. Or garment companies who have long used global sourcing. Garments are one of those lead products that always are one of the first seek low cost countries for manufacturing. So it was a mix. But I was surprised by the number of people who are very conscious of the length of the supply chain in terms of distance and time in how that could impact your responsiveness to customer needs because of that kind of long inventory pipeline. On the other hand, if they were comfortable with the long inventory pipeline, kind of a reticence on paying for premium shipping. And one of the things I was trying to point out is if I have high value cargo, I might choose to assemble it in a low cost country because I can save a lot and then I’ll high value or high time value, I can ship it by air cargo and I can have it here, cleared customs in a store in 48 hours. I mean we have firms like Zara: Fast Fashion, who have built their whole business model on, I’m going to source in places which are attractive for various reasons. And then I will just get it into store very quickly using air cargo or somebody like Apple who predominantly ships iPhones and iPads by air cargo. Because my product life cycles are short and you know, I need to assemble it somewhere where labor is not expensive, but I need to get them to market fast.

BRIAN KENNY: And ultimately the customer probably pays whatever that tariff is.

WILLY SHIH: Well, we had that discussion in one of my classes about, would you pay more to get this in a day instead of 30 days and ultimately most students agreed, well, I probably would pay more. Right? But for a company, if they become a product manager somewhere someday and a lot of students aspire to those types of roles, these are the types of decisions you have to make every day about where do I source my product? What do I want to pay for in terms of supply chain flexibility and responsiveness? So those were the things that we were trying to explore.

BRIAN KENNY: There’s a little footnote to this case too that you let me know about which is that, this is the subject already of a documentary.

WILLY SHIH: It turns out there’s a documentary that has gotten very great reviews so far. It’s called American Factory. And it highlights kind of the challenges of a Chinese company coming into the U.S. where you have very different cultures. You have to span that cultural divide. You have a whole host of issues. There’s a union organizing campaign around the factory. There’s struggles getting the factory to the performance level that they need. So it’ll be a-

BRIAN KENNY: It kind of gets to a lot of the issues in the case.

WILLY SHIH: Gets to a lot of issues in the case, it’s a very nice complement to the case.

BRIAN KENNY: And this film will be on Netflix eventually for-

WILLY SHIH: It is already on Netflix. In fact, when we taught the case a number of students in each of my sections had seen the movie, and so but they were still-

BRIAN KENNY: Very enterprising of them. Willy, thank you for joining me.

WILLY SHIH: Thank you for having me.

BRIAN KENNY: If you enjoy Cold Call , you’ll like other podcasts on the HBR Presents Network. They’re full of management insights from the best thought leaders in business, all curated by Harvard Business Review and they’re free on Apple podcasts. I’m your host, Brian Kenny, and you’ve been listening to Cold Call , an official podcast of Harvard Business School, brought to you by the HBR Presents Network.

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Fuyao Glass America Sourcing Decision Case Solution

Posted by Adam Hudson on Dec-20-2017

1. INTRODUCTION OF Fuyao Glass America Sourcing Decision CASE SOLUTION

The Harvard business review has published the Fuyao Glass America Sourcing Decision Case Study. Like all HBR case studies, the Fuyao Glass America Sourcing Decision Case is designed and drafted in a manner to allow the reader to experience a real-world problem and solve it accordingly. The case study, like other HBR case studies, will help the reader and students develop a broader, and a clearer understanding of the business world and dynamics.

The Fuyao Glass America Sourcing Decision Case is based on a current managerial and strategic problem being faced by the organization, which must be solved tactfully to allow progression, as well as maintain a competitive position. This paper is written to facilitate the case solution for the Fuyao Glass America Sourcing Decision Case Study.

The case solution for the Fuyao Glass America Sourcing Decision Case Study first identifies the central issue that is elaborated on throughout the case. The case solution then analyses the case through relevant strategic models and tools including the SWOT Analysis, Porter Five Forces Analysis, PESTEL Analysis, VRIO analysis, Value Chain Analysis, BCG Matrix analysis, Ansoff Matrix analysis, and the Marketing Mix analysis. This analysis is to help in the identification of a feasible strategy and solution for the Fuyao Glass America Sourcing Decision Case Study. Alternative solutions are also proposed in the case solution, primarily because alternative solutions often act as contingency plans.

2. PROBLEM IDENTIFICATION

2.1. harvard business school case studies.

All case studies published by the Harvard business review comprise of a central problem that is faced by the protagonist. This problem mostly holds implications for managerial and strategic directions of the company. For readers and students of HBR case studies, it is critical to identify the problem that the Fuyao Glass America Sourcing Decision faces. This problem is usually hinted towards in the introduction of the case and develops along the way.

2.2. Solving HBS case studies

As a result, for solving the Fuyao Glass America Sourcing Decision case, it is essential to read the case study thoroughly. The identification of the problem correctly is vital for undergoing the analysis rightly, and for developing relevant solutions for the Fuyao Glass America Sourcing Decision Case Study. It is also essential to identify all the appropriate parties that are being impacted by the problem as well as the decision. The correct problem identification will ensure that all the solutions developed during the case analysis of the Fuyao Glass America Sourcing Decision Case Study are applicable and pragmatic.

EXTERNAL ENVIRONMENT ANALYSIS

The external environment analysis is needed for the Fuyao Glass America Sourcing Decision Case Study to make sure that it actively, and proactively responds to the macro-environment. The macro environment or the external environment for the Fuyao Glass America Sourcing Decision Case includes those factors which are not in control of the business or the company directly. As a result:

• The Fuyao Glass America Sourcing Decision cannot influence these factors in its favour, and in contrast, these factors directly affect the operations and workings of the company.
• As a result, Fuyao Glass America Sourcing Decision must make sure to continually assess and review the external environment to make sure that it responds to external factors, and take them into account, during strategic decisions, and strategy devising. Businesses like Fuyao Glass America Sourcing Decision make use of strategic model tools continually to make sure that they are aware of the external environment.
• These include tools like the pestle analysis and Porter’s five force model, as well as strategic group analysis and pentagonal analysis, to name a few. The external analysis for the Fuyao Glass America Sourcing Decision Case Study will assess and will apply the strategic models and tools to review the business environment for the company.PESTEL Analysis

3.1.1. Political

Political factors and elements can have a direct and indirect impact on the business. This is seen through the Fuyao Glass America Sourcing Decision Case Study.

3.1.1.1. Policy Makings

• Policymakers for the Fuyao Glass America Sourcing Decision Case are in all likelihood to intervene in the business surroundings.
• Commercial restrictions and political stability are additionally integral factors that will determine the success or failure of Fuyao Glass America Sourcing Decision.

3.1.1.2. Taxation

• Tax policy will influence the cost of doing business for Fuyao Glass America Sourcing Decision.
• An increase in organization taxation (on business profits) has a similar impact as an expansion in expenses.
• Organizations can pass a portion of this increase on to shoppers in more expensive rates, yet it will likewise influence the bottom line of the business.

3.1.1.3. Government Support

• The government helps organizations in two primary ways: monetary help and regulatory.
• Fuyao Glass America Sourcing Decision can use government assistance and grants for purposes of growing the business, advancement, exporting, and innovative work.
• Fuyao Glass America Sourcing Decision can also be impacted by when Governments modify regulations and laws.

3.1.1.4. Political Stability

• Lack of political stability in a country impacts business tasks. Political stability is particularly essential for the organizations which work globally, such as Fuyao Glass America Sourcing Decision.
• A forceful takeover could oust a legislature. The takeover could prompt mobs, plundering and general issue in nature. These disturb business tasks for Fuyao Glass America Sourcing Decision.
• Purchasing political risk insurance is a way for Fuyao Glass America Sourcing Decision to oversee political hazard. Organizations that have worldwide activities utilise such as insurance to lessen their risk presentation.
• The soundness of a political framework can influence the attractiveness of a specific nearby market for Fuyao Glass America Sourcing Decision.

3.1.2. Economic

The economic factors are one of the most important of PESTEL factors and can influence Fuyao Glass America Sourcing Decision in several ways.

3.1.2.1. GDP

• Economic components have the most evident effect on the profitability and overall appeal of Fuyao Glass America Sourcing Decision.
• Even though GDP per capita is a useful economic factor, GDP per capita gives just a fractional perspective on the economic factors that may influence Fuyao Glass America Sourcing Decision.
• Higher GDP leads to higher disposable income and hence higher sales for Fuyao Glass America Sourcing Decision.

3.1.2.2. Inflation

• Higher inflation will disintegrate the purchasing power of the consumer and the shopper
• Higher inflation will also harm the costs of raw materials and other inputs that are utilised by Fuyao Glass America Sourcing Decision.

3.1.2.3. Interest Rates

• Fluctuations in interest rates may translate into higher or lower costs for the purchase or sale of items and administrations provided by Fuyao Glass America Sourcing Decision.
• Higher interest rates hurt the disposable cash of consumers.

3.1.2.4. Unemployment Rate

• A high unemployment rate is also unadvisable as it dissolves dispensable income of consumers, and will harm Fuyao Glass America Sourcing Decision ’s position.
• The high unemployment rate will lead to lower sales for Fuyao Glass America Sourcing Decision and impact its overall profitability and revenues.

3.1.2.5. How can the Fuyao Glass America Sourcing Decision decrease the risk of economic instability?

• Fuyao Glass America Sourcing Decision can work towards building economies of scale
• Maintaining business costs and controlling the final price of the product can also help Fuyao Glass America Sourcing Decision fight economic instability
• Fuyao Glass America Sourcing Decision can also work towards building a sustainably managed workforce

3.1.3. Social

Social influences will stem from social components of the macro environment. Under the PESTEL Analysis, they can influence Fuyao Glass America Sourcing Decision in several ways:

3.1.3.1. Social patterns and consumer behaviour

• Social patterns affect work trends and patterns and are directly related to the behaviours of consumers.
• Social patterns also have a direct influence on buyer tastes and inclinations, and the specific kind, structure, and volume of interest for an item or service.

3.1.3.2. Social patterns and changing consumer needs

• The checking of social patterns will enable Fuyao Glass America Sourcing Decision to reposition its items or administrations to meet the changing desires and needs of consumers.

3.1.3.3. Social trends in education

• Social trends of higher education have allowed firms like Fuyao Glass America Sourcing Decision to have access to a pool of higher skilled talent – but at the same time, also face a more criticising consumer base.
• Higher education has also made consumers more aware of different product offerings by companies like Fuyao Glass America Sourcing Decision.
• consumers are also more educated and knowledgeable of different substitutes of a product, as well as become more readily available at different touchpoints.

3.1.3.4. Social patterns make companies more consumer-centric

• Companies like Fuyao Glass America Sourcing Decision are expected to become more consumer-centric than product-centric.
• Similarly, Market segmentation and consumer grouping are dynamically moving towards measures of psychographics and lifestyles to understand the consumer more.

3.1.3.5. How can Fuyao Glass America Sourcing Decision use social aspects for growth?

• Use consumer-centric means of segmentation and targeting.
• Use consumer-oriented and consumer-based marketing – which use emotional appeals to influence consumers.
• Make products more accessible at different touch points common to target consumers socially.

3.1.4. Technological

The technological factors can influence Fuyao Glass America Sourcing Decision in several ways:

3.1.4.1. Innovation

• The quick pace of technological change at Fuyao Glass America Sourcing Decision may be driven through innovation.
• Business leadership at Fuyao Glass America Sourcing Decision tries to push the limits of present limitations.

3.1.4.2. The advent of the internet and online retailing

• The expansion of the Internet and online business has discarded many intermediaries. Fuyao Glass America Sourcing Decision can communicate and retail directly to the consumers now, or through modern intermediaries such as eBay as well, for example.
• Fuyao Glass America Sourcing Decision may also use current social networks to retail and use e-commerce to boost sales.

3.1.4.3. Social media and business growth

• Fuyao Glass America Sourcing Decision can make use of social media to interact and reach with consumers
• Social media can also be used to reach the target market audience more effectively
• Social media is cost-effective and strategically more influential for Fuyao Glass America Sourcing Decision

3.1.4.4. Improved value chain network

• For Fuyao Glass America Sourcing Decision, technological innovation can be utilised to build on competitive advantage through several different ways.
• Fuyao Glass America Sourcing Decision can incorporate less expensive production, improved access to clients, improved marketing, improvement in product quality, and increased levels of business intelligence than the competition.

3.1.4.5. Managing technology and the future for Fuyao Glass America Sourcing Decision

• To flourish in a business world that is quick paced and receptive to innovative change, Fuyao Glass America Sourcing Decision must stay cautious.
• It must be always be updated on any technological developments in the business and industry.
• Fuyao Glass America Sourcing Decision should weary of how the company are probably going to influence its future attractiveness and profitability.

3.1.5. Environmental

For Fuyao Glass America Sourcing Decision, the environmental aspects of the PESTEL analysis may include:

3.1.5.1. Environmental stability and business standards

• Fuyao Glass America Sourcing Decision may be expected to incorporate maintainability standards into their business methodologies and to help resource allocation choices.
• Fuyao Glass America Sourcing Decision may also be subject to environmental laws – which will impact and guide its operations to become more environmentally friendly.

3.1.5.2. Environmental stability and budget allocation

• Leadership in the Fuyao Glass America Sourcing Decision must measure the connection between natural activities and budgetary execution.
• Fuyao Glass America Sourcing Decision also strategically decides and assesses if the organization have been estimating the monetary effect of natural and social activities.

3.1.5.3. Environmental sustainability

• Fuyao Glass America Sourcing Decision also distinguishes and differentiates explicit zones of concern and impediments to the coordination of environmental sustainability into corporate performance and strategy
• Fuyao Glass America Sourcing Decision also gives explicit direction concerning how organizations can push toward a superior reconciliation of ecological and social activities in their basic leadership procedures and tasks.

3.1.5.4. Environmental sustainability and business growth

• Fuyao Glass America Sourcing Decision may use environmental issues to adjust financial, natural and social performance.
• Concerns towards the environment will enhance the business image for Fuyao Glass America Sourcing Decision.
• Environmental sustainability within business goals and strategy will also reflect corporate responsibility on the part of Fuyao Glass America Sourcing Decision.

3.1.5.5. Environmental sustainability and improved consumer relations

• Consumers will be more inclined towards the use of environmentally sustainable products.
• Environmental sustainability in operations works towards improving the bottom line and overall profitability for the business of Fuyao Glass America Sourcing Decision.
• Improvement of cost management and operations will be observed in the business as well.

3.1.6. Legal

Legal components can influence Fuyao Glass America Sourcing Decision directly, and can likewise influence the instruments through which an organization buys its stock or connects with the client. The Fuyao Glass America Sourcing Decision should be mindful, for example, of the following legal aspects:

3.1.6.1. Labour law

• Labour law refers to the guidelines in regulations that set up minimum and benchmark conditions.
• These include identifying with the work of people.
• Labour laws include aspects of minimum working age, least time-based compensation, etc.
• Fuyao Glass America Sourcing Decision must be mindful of these laws in routine business tasks such as hiring, for example.

3.1.6.2. Discrimination law

• Under the discrimination law, Fuyao Glass America Sourcing Decision must ensure to avoid episodes of unequal or uncalled for treatment based on an individual's age, inability, sex, national source, race, religion, and sexual orientation.
• Unequal hiring
• Discrimination in recruitment
• Internal discrimination in talent management
• Bias in training opportunities
• Unfair compensation systems
• Prejudiced promotions and succession management

3.1.6.3. Health and safety laws:

• Under this, Fuyao Glass America Sourcing Decision is required to give a protected work environment to their workers.
• Working environment security and wellbeing laws build up guidelines intended to dispense with individual wounds and injuries from happening in the work environment.
• all operations of Fuyao Glass America Sourcing Decision should be designed to physically and emotionally safeguard and protect the employees and the labour force employed

3.2. Porter’s five forces

• The five forces identified in Porter's model can effect Fuyao Glass America Sourcing Decision ’s ability to serve its clients and make a profit.
• A change in any of the five forces may regularly require a business unit from Fuyao Glass America Sourcing Decision to reassess the market place given the general change in industry data and dynamics. The general industry appeal and attractiveness.
• Fuyao Glass America Sourcing Decision should apply and centre their skills, plan of action or business models to accomplish profits above the business average. This may be done in multiple ways, each distinguished in their application to the forces individually as is elaborated below:

3.2.1. The threat of new entrants

3.2.1.1. market and industry share.

• New entrants to an industry bring new potential and a choice to increase the market share and overall share of the pie that puts pressure on price, costs, and the investment price essential to compete.
• For Fuyao Glass America Sourcing Decision, particularly while new entrants are diversifying from different markets into the chief industry, they will be able to leverage existing talents and cash flows to shake up the opposition.

3.2.1.2. Limitation on earning expectation and capability of firms in an industry

• The threat of entry in the industry, consequently, puts a cap at the earning capacity and profit capability for Fuyao Glass America Sourcing Decision.
• While the threat of new entreaty is high, Fuyao Glass America Sourcing Decision should maintain their prices or increase funding and investment to discourage new competition.

3.2.1.3. The risk to new entrants because of high entry barriers

• The risk of entry in an industry depends upon on the peak of entry barriers and limitations that are a blessing for players such as Fuyao Glass America Sourcing Decision and on the response that new entrants can count on from existing players.
• If entry barriers are low and novices count on little retaliation from the entrenched competition, the chance of entry is high, and profitability for Fuyao Glass America Sourcing Decision will be moderated.
• It is the danger of entry, not whether the entry of new players takes place that holds down profitability.

3.2.1.4. Some barriers to entry for new entrants in favour of Fuyao Glass America Sourcing Decision :

• Capital requirements: a strong barrier to entry as new entrants will require strong financial and resource cushioning for operations to take off and be sustained.
• Economies of scale: a strong barrier to entry as existing players in the industry operate with high economies of scale, which new entrants will take time to achieve.
• Product differentiation: the strong barrier of entry if products within the industry have high levels of differentiation on which they operate and approach customers.
• Access to distribution: a standard barrier to entry since new entrants will have equal access to the retailers and distributing agents within the industry.
• Customer loyalty to established brands: a strong barrier to entry since customer loyalties and perceptions are emotionally built and strongly enforced as long as the brand continues to deliver on its core promise and quality.

3.2.1.5. What can Fuyao Glass America Sourcing Decision do to face this challenge?

• Build and invest in marketing to distinctly establish a point of differentiation in customer perception as well as strengthen customer loyalty.
• Invest in research and development to make sure that it continues to have competitive differentiation from other players at all times.
• Focus on building economies of scale in production and sales.

3.2.2. The threat of substitute products or services

3.2.2.1. substitute form.

• There are always different alternatives or substitutes for various products that lead an industry.
• These substitutes may be direct or indirect– the direct substitutes are the same category products. produced by different players; indirect substitutes are the ones from different product categories that can replace the product for Fuyao Glass America Sourcing Decision.

3.2.2.2. Switching cost to substitutes for consumers

• Switching costs for direct substitutes is not very high for consumers.
• The per-unit-volume prices may be higher or lower.
• This makes the threat of substitute high.

3.2.2.3. Substitute and product benefit

• Alternatives to the product or substitutes may not be able to provide the same benefits
• May often lead to additional costs incurred.
• Switching costs towards alternatives becomes higher, and consumers may not switch to substitutes.
• This, in turn, will make the threat of substitutes low.

3.2.2.4. Substitutes and consumer behaviour

• From the point of view of the consumer, there are some differences between the ways different products of the same or similar category are used, but many consumption decisions are a matter of personal taste - this makes products vulnerable to the threat of other substitutes.
• Overall, the threat of substitutes is assessed to be moderately high.

3.2.2.5. How can Fuyao Glass America Sourcing Decision combat the threat from substitute products?

• Focus on delivering consistently high quality.
• Focus on maintaining strong consumer relationships.
• Integrate strategic marketing to form an emotional connection with the consumers and strengthen consumer loyalty.
• Invest in pop up stores owned by the company to stock the Fuyao Glass America Sourcing Decision brand exclusively, and integrate it with brand characteristics and personality to attract consumers.

3.2.3. Bargaining Power of Buyers

3.2.3.1. who is the buyer.

• The buyer for Fuyao Glass America Sourcing Decision is not necessarily the group that consumes the product – but rather refers to the group of customers that purchases the product from Fuyao Glass America Sourcing Decision to either distribute further, retail it, or even consume it.
• Hypermarkets and supermarkets, as well as independent retailers and distribution agents to end consumers, are the core buyers for Fuyao Glass America Sourcing Decision that make up the market’s volume.
• Supermarkets and hypermarkets, along with many food chains that are concentrated, which increases the buyer power.
• Products are stocked with buyers and retailers by Fuyao Glass America Sourcing Decision based on consumer demand.

3.2.3.2. Buyer power and costs

• Fuyao Glass America Sourcing Decision will not experience switching costs for switching buyers.
• Multiple product offerings by buyers also increase buyer power.

3.2.3.3. Retail product differentiation

• Products offered by retailers are differentiated based on several characteristics – not only reliant upon product characteristics but also consumer segment characteristics. Because of this, retailers are expected to offer a wide range of the same product category. This works towards negating and weakening the overall buyer power.
• Buyer power is assessed to be moderate to high.

3.2.3.4. What can Fuyao Glass America Sourcing Decision do to ensure risks against high buyer power?

• Fuyao Glass America Sourcing Decision can focus on differentiating its product and increasing its demand with the end consumers through different marketing tactics, this will increase the demand of the product with different buyers, and will work towards moderating buyer power.
• Fuyao Glass America Sourcing Decision should employ economies of scale to manage costs of production. If it offers products at moderate prices to buyers, it will again be able to attract a large number of buyers for its product, and in this way, will be able to break off the high bargaining power.

3.2.4. Bargaining Power of Suppliers

3.2.4.1. who is the supplier.

• Supplier power refers to the power that is held by the suppliers in terms of pricing of the raw materials and inputs used for the business.

3.2.4.2. Sources of production for Fuyao Glass America Sourcing Decision

• The main sources for production are the following:
• Supplies from vendors – sourcing from independent suppliers.
• Own manufactured equipment and resources: this model is practised by companies that are well integrated backwards and forwards.

3.2.4.3. Independent suppliers

• For Fuyao Glass America Sourcing Decision, there are numerous independent suppliers within the industry, and all comprise of a few pretty small operations that lead to weakened overall supplier power.
• Independent sellers and suppliers, however, can locate different opportunities and invest in alternative markets – which can be a challenge for Fuyao Glass America Sourcing Decision.

3.2.4.4. Supply quality and business dynamics

• Suppliers can integrate forward into the decision making and business dynamics themselves as well.
• Also, to the buyers, the quality of the supplies and the raw materials is of utmost importance.
• However, in an industry with a high number of suppliers, Fuyao Glass America Sourcing Decision can switch to different suppliers at any time without experiencing any costs of the business.
• Overall bargaining power of suppliers is assessed to be moderate.

3.2.4.5. How can Fuyao Glass America Sourcing Decision deal with the challenge?

• Get contracts with multiple suppliers and get resources and raw materials from them accordingly.
• Invest in manufacturer controlled production facility to maintain consistency in quality.

3.2.5. Competitive Rivalry among Existing Firms.

3.2.5.1. nature of fragmentation.

• The market is highly fragmented, which makes it more competitive.
• The market is never too concentrated, and as a result, it has players of varying size of operation – from very small to big players.

3.2.5.2. Brand management

• Producers have begun to make use of brand management techniques and contemporary merchandising by launching bold brands, label designs and marketing campaigns to become more identifiable to the public.

3.2.5.3. Diversification

• Purchasers and buyers have a wide range of products to choose from, with relatively low switching costs. These factors tend to intensify rivalry.
• Though players in the industry may off niche or premium products, they also continue to operate in the mass markets at large, which again leads to high competition.

3.2.5.4. High business costs

• The high fixed cost and the high bargaining power of the buyers, which can lead to the lowering of the prices from manufacturers add to the highly competitive nature of the industry.
• The overall rivalry is assessed to be high.

3.2.5.5. How can Fuyao Glass America Sourcing Decision combat rivalry and competitive forces of the industry?

• Focus on research and development to identify market niche as well as to be able to add differentiating factors t its products. This will increase its shield against influence from competitive forces and their actions.
• Build a strong and loyal consumer base by focusing on quality and marketing strategies.
• Focus on capturing new markets – in the same region as well as new regions to avoid saturation of resources in one market only.

3.3. Pentagonal analysis

3.3.1. the threat of new entrants, 3.3.1.1. restriction into industry.

• The ease of entry into the industry is restricted.
• There are high barriers to entry.
• These are government policies, consumer loyalty, brand differentiation etc.

3.3.1.2. Switching costs for consumers

• The high number of direct and indirect alternatives available also make Fuyao Glass America Sourcing Decision vulnerable to the high threat of substitutes.
• Low to negligible switching costs experienced on the part of the consumers and buyers.

3.3.1.3. Profitability

• New entrants are attracted to the industry because of high profitability.
• If there are high barriers to industry, the industry will continue to maintain high profitability
• Low barriers to entry will result in a lower average of industry profits.
• Lower entry barriers will also lead to higher operational costs because it will increase the intensity of competition within the industry.

3.3.2. The threat of substitute products/services

3.3.2.1. increased competition.

• High threat of substitutes.
• This is because of higher competition.
• The higher competition leads to imitation of products and systems.
• This imitation makes substitute products similar to each other – as much as possible.

3.3.2.2. The offering of similar benefits

• Consumers readily adopt alternative and substitute products.
• They offer similar benefits.
• They have similar functional benefits and features.

3.3.2.3. Low costs of switching

• Consumers often experience a low cost of switching between substitute products.
• Low switching costs are also developed because competition often produces at lower operational costs.
• Low switching cost results in lower overall product prices for the consumer.
• Industry players, therefore, also start competing on aspects of price.

3.3.3. Bargaining power of buyers

3.3.3.1. market fragmentation.

• The industry in which Fuyao Glass America Sourcing Decision operates is highly fragmented.
• It has numerous local and international players.
• It is not very likely for players in the industry to integrate forward into on-trade or retail businesses.
• This results in the players experiencing high bargaining power of the buyers from the market.

3.3.3.2. The concentration of retailing agents

• It also results in a high concentration of individual retailing agents.
• Retailing is also done through hypermarkets and supermarkets.

3.3.4. Bargaining power of suppliers

3.3.4.1. backward integration by producers.

• Backward integration from producers is more commonly observed and seen,
• Many players in the industry have their own production facilities for raw materials as well.
• The industry has seen a large number of players needing to outsource resources and raw materials.

3.3.4.2. Outsourcing raw materials

• This outsourcing is done by third-party manufacturers.
• A large number of suppliers present lowers the bargaining power of suppliers.
• Players in the industry have low switching costs between suppliers.
• Suppliers usually are contracted by producers.
• Producers may change suppliers frequently.

3.3.5. Industry rivalry

3.3.5.1. intensity of competition.

• There are strong competition and rivalry in the industry.
• There is a high number of players.
• All players provide similar products.
• Switching costs for consumers is low, which increases competition.

3.3.5.2. Differentiation

• Platers try to differentiate products on different aspects.
• Functional aspects and appeals for all products across the industry remain the same.
• Competitors and players use emotional appeals, and modern brand management techniques for differentiation.
• Industry players try to gain consumer loyalty by developing strong emotional bonds and ties.

Figure 1 Pentagonal analysis for Fuyao Glass America Sourcing Decision

3.4. Placement of the business along the industry life cycle

3.4.1. identifying where fuyao glass america sourcing decision is on the industry life cycle curve.

Identification of the place and placement on the industry lifecycle is important as it will help Fuyao Glass America Sourcing Decision make important decisions and strategies for the future.

3.4.1.1. Strategic decision making

• Expansionary plans and investment decisions.
• Decide on various marketing strategies and tactics for targeting different consumer segments to establish and establish the product.
• Selection of new geographic regions for expansion and exploration of new consumer bases.

3.4.1.2. Budget allocation

• Resources and alternative routes for future growth and establishment.
• Exploration of different diversification options.

Figure 2 PLC Placement along the Industry Lifecycle curve

3.4.2. Introductory stage

3.4.2.1. firm strength.

• The industry is in the infancy stage.
• Firms are generally small, entrepreneurial and compact during this stage.
• Fuyao Glass America Sourcing Decision will be focused on research and development during this phase.

3.4.2.2. Financial Position

• Looking for investment and funds for growth.

3.4.2.3. Nature of product

• Products offered during this stage re doubtful as success and life of the product is unproven and not known.
• Fuyao Glass America Sourcing Decision will use a focused strategy during this phase to emphasise the uniqueness of the product.
• The product or the brand will have a small market of consumers – known largely as early adopters
• Marketing strategies adopted by the company will focus on generating awareness of the product and therefore, will largely use a functional appeal.

3.4.3. Growth stage

3.4.3.1. financial position.

• Fuyao Glass America Sourcing Decision will require high capital during this stage.
• Fuyao Glass America Sourcing Decision will need investment and funds for launching strategic marketing campaigns.
• Funds will also be required for fuelling physical growth of the company in the form of investment in equipment and property to facilitate growth.

3.4.3.2. Growth factors

• Companies may increasingly encourage economies of scale because of standardisation experienced during this stage.
• Consumer feedback from the introductory phase will be incorporated, and research and development will be conducted to make appropriate changes in the product design and offering.
• Success in this stage for Fuyao Glass America Sourcing Decision will lead to growing demand, which in turn will fuel sales demand.

3.4.3.3. Nature of Product

• Products in this stage have high growth and high market share.
• There is also increasing competition and rivalry in the market – new entrants will enter and compete looking at the success of products during this stage.

3.4.4. Maturity stage

3.4.4.1. sales and growth.

• Fuyao Glass America Sourcing Decision will experience slowing growth during this stage of the industry life cycle.
• Sales will be expanding, and earning will be growing – however, the rate will be slower than the growth stage.
• Competition from late entrants will be present, and obvious during this stage – who will all try to fight for Fuyao Glass America Sourcing Decision ’s share of the market.

3.4.4.2. Strategic Marketing

• The marketing strategies must now focus on building loyalty.
• Marketing tactics must be strong and should focus on the uniqueness of the product. Increasingly emotional appeals may be used.

3.4.4.3. Firm size

• Firm size is generally larger and is more dominant over players if successful- compared to growth stage.
• Innovations continue but are stable and not radical.

3.4.5. Decline stage

3.4.5.1. industry changes.

• New technological changes and upgrades may make an industry obsolete.
• Players within an industry may also fall back and lose on market share if they do not keep up with innovations, and investment in research and development.

3.4.5.2. Sales and Competition

• Sales during this phase are decreasing at a high rate.
• Competing players also exit the industry because of the changes and low demand.

3.4.5.3. Surviving in the decline cycle

• Fuyao Glass America Sourcing Decision may also experience mergers and acquisitions during this phase.
• Diversifications are also most common during this phase as a means of survival.

3.5. Strategic Group Analysis

3.5.1. fuyao glass america sourcing decision and strategic group formation.

• The strategic group analysis will look at an industry’s players' situations in focused conditions and scenarios.
• It will assess different players competing with Fuyao Glass America Sourcing Decision through the basic strategic factors that will decide an organization's profitability, similar to how the profitability will also be impacted and influenced by the competitive nature of the industry.
• The strategic group analysis will describe the procedures of every single noteworthy competitor of Fuyao Glass America Sourcing Decision along different strategic dimensions.
• These dimensions of comparison differentiate players into strategic groupings and must be selected as the basis of comparison by taking into account industry structure, productivity factors, and the venture issues being tended to.

3.5.2. Different aspects of strategic grouping

Key strategic groupings of players within an industry can be made based on numerous different aspects, such as:

• Specialization
• Brand identification
• Push versus pull strategies
• Channel determination
• Product quality
• Technological position
• Vertical joining
• cost position
• Price strategy
• Financial or working influence
• Parent organization relationship
• Government relationship

Despite the various aspects available for comparison of competing players, it is often important to differentiate strategic groupings of players of aspects of how they compete with each other, and on aspects of where they compete as well

3.5.3. Procedure for strategic group analysis for Fuyao Glass America Sourcing Decision

• Collect results of the player’s analysis.
• Distinguish the players and pick the most important aspects that separate the players into strategic groups comparing to the issues being tended to.
• Dimensions may include price strategy and product quality.
• Group the players: position Fuyao Glass America Sourcing Decision and rivals along with the matrix.
• Evaluate group mobility and direction. Assess the key purpose of individual organizations competing with Fuyao Glass America Sourcing Decision, similar to assessing industry patterns and barriers to entry/exit to be able to decide potential developments inside and between groupings.

3.5.4. How will strategic group planning help Fuyao Glass America Sourcing Decision

For Fuyao Glass America Sourcing Decision, strategic group analysis is important because it will:

3.5.4.1. Strategic industry dynamics

• Help in reviewing the strategic dynamics and shifts in the industry.
• Identify the closest competition and competing players for the business; help in assessing the strategic direction of these competing players; and lastly, aid in developing strategies to stay ahead of the competition.

3.5.4.2. Assessment of market position

• The strategic group analysis is also important for Fuyao Glass America Sourcing Decision because it will assist in analysing the current market position of players, as well as help in assessing future strategic moves and directions of the competition in the market.
• Assists in evaluating and identifying different underlying factors that will influence the company’s profitability.
• Makes use of standard comparison aspects between different players in an industry to group them as per strategic directions as well as strategic dimensions.

3.5.4.3. Identification of barriers to entry in an industry

• Different strategic dimensions along the matrix of strategic groupings are often characterized by barriers to entry and exit along the strategic groups’ dimensions, as well as by mobility barriers.
• These barriers make it difficult for companies to move along, and in between different strategic dimensions – often forcing it to stay in place with the same competition.

3.6. Scenario planning

Scenario planning for Fuyao Glass America Sourcing Decision ’s strategic direction will take form through speculation and contingency form – methods used by the military for strategic planning and direction.

3.6.1. Fuyao Glass America Sourcing Decision ’s Utilization of Scenario planning

For Fuyao Glass America Sourcing Decision, scenario planning comprises of making suppositions of what's to come, of what will be and how the business condition will adapt, fluctuate, change, and respond to the future conditions, and changes in the futuristic strategic planning.

3.6.1.1.1. Identify the driving forces of the business:

• Changes in the macro environment
• Changes in technology
• Changes in the economic trade system
• Changes in production methods
• Changes in consumer demands and tastes
• changes in technology and economy

3.6.1.1.2. Identify basic vulnerabilities:

• Changes in technological advancements and developments. These changes can be in the form that the industry has progressed to install more modern and contemporary technological developments.
• Changes in consumer demands and needs.
• These two uncertainties of the future are those that will have the largest impact and influence on the business.

3.6.1.1.3. Develop a scope of conceivable situations:

• Fuyao Glass America Sourcing Decision will now be able to place these two uncertainties along a matrix.
• Install new technology, or update current technology to be on par with new technology.
• Do market research.
• Engage in innovative marketing to influence consumers.
• Change vertical and backward integrated systems to ensure in-house or out-house production of technology to stay ahead of the competition.

3.6.1.1.4. Discuss the suggestions:

• Each scenario should be discussed in detail.
• Possible strategic direction and responses for each scenario should be developed.
• Realignment of business goals and direction, as well as a mission during each scenario, should also be done to ensure future resilience.

4. ANALYSIS OF RESOURCES AND COMPETENCES

• This inner analysis and assessment of Fuyao Glass America Sourcing Decision decide the centre skills based on the resource based view (RBV) of the premium company.
• Utilizing its core capabilities and capacities, Fuyao Glass America Sourcing Decision can maintain a competitive distinction, and leadership over other local as well as international players in the industry.
• In the VRIN analysis and assessment, Fuyao Glass America Sourcing Decision makes use of its core capacities to strengthen its worth and the to continue to deliver the promise of consistent quality and taste to consumers – as well as guarantee futuristic and long term gains in the industry.

The following section presents a brief analysis of the VRIN strategic tool as it is applied to Fuyao Glass America Sourcing Decision and its impact on the strategic direction.

4.1. VRIN analysis

4.1.1. valuable, 4.1.1.1. international distribution network.

The company has an international distribution system with agents and contracts in countries across the world. This helps the company in making sure that its products are widely available and easily accessible to all consumers.

4.1.1.2. Experience in expansion to other countries

The experience of expansion to other countries directly as well as indirectly has allowed the company to gain exposure and experience in international business, culture and trades.

4.1.1.3. Marketing skills

The company has a unique blend of marketing skills, which allows it to reach consumers directly through various channels, in a creative way. This is a valuable resource for the company as it allows the company to ward off potential competition.

4.1.1.4. Market research

The company invests in market research regularly, which allows it to stay updated with market trends, consumer needs, demands, as well as the changes that take place in different markets and consumer groups. This is also valuable as it then allows Fuyao Glass America Sourcing Decision to make changes in product and service offering accordingly.

4.1.2. Rare

4.1.2.1. use of progressive technology.

The company makes use of progressive technology and invests in new technology to help it make the business more effective and efficient. This is important for maintaining competitive differentiation. The technology used by the company also allows lower chances of human error and increases precision.

4.1.2.2. Use of progressive harvesting methods

The company makes use of modern as well as new and innovative means of cropping and harvesting as well. The means of production are important for a business to maintain cost efficiency. This allows lower levels of spoilt raw materials and enhances the quality as well as the feel of the final product. Also, it allows the company to maintain the product quality in-house, and maintain consistency in the raw material.

4.1.2.3. Efficient use of economies of scale in production

The company’s effective and efficient use of resources has allowed it to maintain economies of scale. The company uses economies of scale as a rare resource available to maintain costs, enhance production, and increase sales – all the while maintaining a high focus on premium quality and consistency of taste.

4.1.2.4. The uniqueness of product portfolio

The company has a unique and diversified portfolio. This has allowed it to penetrate different consumer groups. And maintain income from different streams. Into urn, that gives a strong financial cushioning to the business.

4.1.3. Inimitable

4.1.3.1. human resource management.

The company has taken part in exemplified human resource management in all its function – from recruitment to training of talent management. This has allowed the company to develop an inimitable resource that is aligned with the organizational goals, and mission, and which is synonymous to the organization itself.

4.1.3.2. R&d - new product development

The company’s continued investment in r&d allows it to generate ideas for new products, as well as test these new products in limited market settings. This allows the company to assess the viability of new ideas, as well as generate feedback for improvement where needed. This is an inimitable resource for the company because it has become part of the company’s system and culture.

4.1.3.3. Innovation

The innovation at Fuyao Glass America Sourcing Decision is an inimitable resource that allows the company to stay ahead of the competition as well as maintain high leadership in the industry by having the first mover advantage in its product portfolio continuously.

4.1.3.4. Organizational culture

The organizational culture at Fuyao Glass America Sourcing Decision is supportive and innovative. Employees share information freely. The organizational hierarchy is flatter, which makes leadership and follower relation smooth and easy. This organizational culture and its aspects cannot be imitated by competition.

4.1.3.5. Cost control

The company has employed progressive means of controlling costs and maintaining economies of scale. In this way, prices of the products are maintained and controlled, and very few cost increases are passed to the consumers. This allows the product to be easily affordable by the company’s target audience.

4.1.4. Non-substitutable

4.1.4.1. brand recognition.

The brand value and brand recognition enjoyed by Fuyao Glass America Sourcing Decision is a non-substitutable resource. The high brand recognition across different consumer group’s in different countries allows the brand to enjoy high consumer ship, high sales, and a unique bond with the consumers. This cannot be imitated at all by the competition as the brand recognition and resonance has been built over the years through hard work and quality deliverance.

4.1.4.2. Brand equity

The Fuyao Glass America Sourcing Decision enjoys high brand equity. This has been developed through the different stages presented by Keller in his model for brand equity. The high brand equity also reflects a high emotional appeal that Fuyao Glass America Sourcing Decision has for the consumers.

4.1.4.3. Emotional affiliation with consumers

This means that the brand fulfils not only functional but also emotional and psychological needs of the consumers. Again, this is an inimitable resource which the company has developed because of its honest and trusted relationship with the clients over some time.

4.2. VRIO ANALYSIS

4.2.1. strong global presence, 4.2.1.1. valuable.

Having a strong worldwide presence is significantly valuable for an organization attempting to expand its size, deals, and piece of the overall industry. It is a competitive and sustainable method to acquire incomes from new and existing buyers.

4.2.1.2. Rare

Fuyao Glass America Sourcing Decision is one of the greatest company all inclusive. Even though there are other worldwide and international chains of competing companies, Fuyao Glass America Sourcing Decision has made a distinct name for its quality and offers.

4.2.1.3. Non-substitutable

For the time being, no competition of Fuyao Glass America Sourcing Decision could match such an enormous international presence in terms of quality and consistency. It would require critical investment and assets to achieve this.

4.2.1.4. Organized to exploit

Fuyao Glass America Sourcing Decision is effectively exploiting this capacity.

4.2.2. Claim to premium products

4.2.2.1. valuable.

Fuyao Glass America Sourcing Decision offers numerous exceptional and fulfilling products that different contenders don't offer all the time. Fuyao Glass America Sourcing Decision additionally incorporates information and detailed ingredients for its products to interest an assortment of clients.

4.2.2.2. Rare

Other competition also offers different products that are offered by Fuyao Glass America Sourcing Decision, which means that it is not a rare resource for the company. This is because other players also have access to similar products and portfolios.

4.2.2.3. Inimitable

Considering other businesses and players are now using this capacity as a means of expansion and penetration, it can, therefore, be imitated.

4.2.2.4. Organized out to exploit

By offering an assortment of choices and ceaselessly changing the portfolio through active innovation and new product development, Fuyao Glass America Sourcing Decision is exploiting this resource. With plenty of alternatives, the vast majority can discover something they like, and individuals who like to attempt new products and services every now and again can undoubtedly do as such with Fuyao Glass America Sourcing Decision.

4.2.3. Upscale brand name

4.2.3.1. valuable.

The Fuyao Glass America Sourcing Decision brand name enables clients to enjoy and feel a bond of association with the brand. This allows consumers to feel emotionally attached with the brand, and experience it as an extension of themselves as well. As such, this becomes a valuable asset for the company.

4.2.3.2. Rare

Fuyao Glass America Sourcing Decision is a contemporary brand name that has a premium touch to it and is upscale, modern and lively. Most other companies and competing brands don't have the quality and packaging to urge clients to engage in a way they do with Fuyao Glass America Sourcing Decision .

4.2.3.3. Non-substitutable

It would be generally simple for other companies to revamp their packaging and duplicate the plan of action of Fuyao Glass America Sourcing Decision. In this way, the upscale and comfortable promise of the offering by Fuyao Glass America Sourcing Decision could be imitated.

4.2.3.4. Organized out to exploit

Fuyao Glass America Sourcing Decision is effectively using this resource and enhancing the brand and the brand promise that numerous clients altogether appreciate. The organization is exploiting the stylish way of life that is right now present in numerous urban communities where the brand’s products are widely appreciated and consumed.

4.3. Porter’s value chain

4.3.1. fuyao glass america sourcing decision: drawing value from vrin/vrio.

• The core competencies and strengths of Fuyao Glass America Sourcing Decision are organizational sources and capacities that enable the business to flourish regardless of substantial challenge and strategic difficulties in local and international markets.
• As the VRIO/VRIN analysis have shown and highlighted, the important core abilities depend on intellectual properties and related propriety data or related technological structures.
• Different resources and abilities appeared in the VRIN/VRIO analysis and review that are non-core, and non-central skills but that help the business and its value chain.
• Fuyao Glass America Sourcing Decision ’s core abilities are strong yet restricted.
• In the resource based view, this constraint presents key difficulties, as the organization wards off competing players from local and international markets.
• The core capabilities in the VRIN/VRIO analysis assume critical jobs in Fuyao Glass America Sourcing Decision ’s value chain. Considering the resource based view and Michael E. Doorman's value chain conceptualization, Fuyao Glass America Sourcing Decision ’s value chain gives reasonable and tasteful products to target buyers.
• The accompanying outline shows the value chain for Fuyao Glass America Sourcing Decision and its situation in the bigger value arrangement of the industry:

Figure 3 Value chain for Fuyao Glass America Sourcing Decision

4.3.2. Value framework

Fuyao Glass America Sourcing Decision ’s value chain is a segment of the business' value framework. The value framework is made out of different other value chains of the speciality units of all associations included, for example, the organization's producers and the remainder of the inventory network. In the value chain representation, Fuyao Glass America Sourcing Decision works directly, as well as through contracted third parties.

4.3.3. Example from value framework for Fuyao Glass America Sourcing Decision

• The organization has an internal transportation system of vehicles for making deliveries to other companies that are in business with stocking and serving Fuyao Glass America Sourcing Decision products – in the local markets.
• In this value chain and value framework, Fuyao Glass America Sourcing Decision ’s competitive advantage and abilities are distinguished through the VRIO/VRIN assessment are huge in how the organization's procedures offer some incentive and advantage to the consumers.

4.3.4. Value chain activities

Brief details of Fuyao Glass America Sourcing Decision ’s value chain are discussed in the next section:

4.3.4.1. Primary activities

4.3.4.1.1. inbound logistics.

The inbound logistics for Fuyao Glass America Sourcing Decision refers to producers in different designated and appointed locations by the company. Also, it also refers to selecting the finest quality raw materials from in-house production as well as from third-party contractors. These are transported to the storage sites after which the raw materials are used for producing different products by the company.

4.3.4.1.2. Operations

Fuyao Glass America Sourcing Decision operates internationally directly or indirectly. The company has owned offshore shops, as well as stocks its products with other shops across different countries.

4.3.4.1.3. Outbound logistics

The company has contracted agents in offshore countries and sites to manage product selling. However, a majority of the products are sold directly to licensed sellers and shops locally as well as internationally.

4.3.4.1.4. Marketing and sales

Fuyao Glass America Sourcing Decision produces and invests in high quality and premium products. It also invests in a high level of customer servicing and marketing. All its marketing activities, however, are based on strong market research and market data.

4.3.4.1.5. Service

Fuyao Glass America Sourcing Decision invests in customer service to develop customer loyalty and build strong relations with its clients. The company invests in gaining and incorporating customer feedback and in solving customer queries effectively.

4.3.4.2. Support activities

4.3.4.2.1. infrastructure.

This includes different departments like management, finance, legal, etc. which are required to keep the company’s business running.

4.3.4.2.2. Human resource management

The company’s committed and trained workforce is considered to be a valuable and an inimitable resource that has played a vital role in the success and growth of Fuyao Glass America Sourcing Decision the employees of the company are motivated, professional, trained, and work alongside the company’s mission and goals.

4.3.4.2.3. Technology development

Fuyao Glass America Sourcing Decision has been commended and celebrated for the use of effective technology not only production but also to make the overall system of production and sale, as well as in house production more effective and efficient. Also, the company also uses technology to communicate and connect with its consumers effectively.

4.3.4.2.4. Procurement

This involves purchasing the raw material for the final product. The company has appointed agents that work for the company in different countries and regions to purchase consistently high quality raw material so that the company can produce the finest product qualities for delivering to the consumers.

4.3.4.2.5. Bottom line

The concept of the value chain for Fuyao Glass America Sourcing Decision helps in understanding how value is added in each process and stage of the value chain. It also helps to understand and separate useful activities from those that are not useful as such. This improves the overall bottom-line of the company and increases the profit margins for the company as well.

4.3.4.3. Virtual chain

4.3.4.3.1. customer-centrism.

• Renewed and enhanced way of engaging with consumers.
• Installation of sophisticated consumer data management systems.
• Made use of artificial intelligence to enhance the value chain.

4.3.4.3.2. Improved technological use

• Installed progressive technology for primary and support activities.
• The overall purpose is to provide a better experience to consumers.
• Allows the company to predict future market conditions, and prepare strategic contingencies accordingly.
• Allows understanding of consumer behaviour and market movements.

4.3.4.4. Generic strategies

• Managed to establish core competitive strategy in the market.
• Competes in the premium sector.
• Does not engage in competition with other cost groups.
• Worked towards improving the service of premium target groups.
• Consumers understand and perceive the brand as a high quality and premium.
• The brand is appreciated for its focused strategy and standing.
• The brand is appreciated and engaged in for its offerings.

5. INTERNAL ENVIRONMENT ANALYSIS

5.1. porter’s strategic options.

• Leading organizations such as Fuyao Glass America Sourcing Decision have obtained sustainable competitive advantage and have had the option to achieve the strategic position.
• There can be different sources of sustainable competitive advantage for Fuyao Glass America Sourcing Decision. A firm can depend on innovation to decrease its overall production costs and would then be able to pass this advantage on to its clients.
• Fuyao Glass America Sourcing Decision can also concentrate on making a differentiated item or administration to increase its overall share of the pie.
• Fuyao Glass America Sourcing Decision can generate considerable sustainable competitive advantage utilizing these systems. This is done through means of traditional as well as modern procedures embraced by Fuyao Glass America Sourcing Decision to competitive advantage hand and increase its share of the pie.

5.1.1. Differentiation strategy

5.1.1.1. organizational leadership.

Fuyao Glass America Sourcing Decision has made use of the differentiation factor to maintain higher leadership and differentiation from industry competition. Differentiation of effective leadership may be achieved through different forms and basis.

5.1.1.2. Broad product portfolio

5.1.1.2.1. product quality.

Moreover, this differentiation can fluctuate from item to item, market to market and industry to industry. Generally, the essential bases of differentiation are quality, durability, usefulness and in a few consumer loyalty, and brand image. Fuyao Glass America Sourcing Decision has differentiated its items and products dependent on the quality and set a completely different, and engaging consumer experience. Brand image

5.1.1.2.2. Brand Image

Aside from these things, it has developed a distinct and distinguished brand image which is additionally a premise of differentiation and encourages Fuyao Glass America Sourcing Decision to advertise, promote and market its products and brand better than the competing players in the local and international markets.

5.1.2. Focus strategy

5.1.2.1. overall quality of product and service.

The essential premise of differentiation for Fuyao Glass America Sourcing Decision is quality and premium taste. It serves just premium quality products, which enables it to charge a top notch and a premium cost. It has embraced the most astounding measures as far as the nature of its raw materials used for producing its products. At each progression, Fuyao Glass America Sourcing Decision puts forth an admirable attempt to guarantee that its product fulfils the most noteworthy quality guidelines.

5.1.2.2. Value addition at each step of the value chain

However, the account of value does not finish at getting incredible quality of raw materials. It goes more remote from that point. A great deal of contrast originates from the readiness. Fuyao Glass America Sourcing Decision prepares its product diligently to draw out the quality.

5.1.2.3. Human resource management

Rest of the credit goes to the human resource and employees at Fuyao Glass America Sourcing Decision. The brand carefully picks its raw materials - just when they in ideal condition. Products are tested from each cluster in any event thrice before endorsement. This is how Fuyao Glass America Sourcing Decision makes the quality that each client looks forward to, and is excited about.

5.1.3. Leadership and differentiation through cost

Porter’s traditional methodologies are methods for increasing and developing a sustainable competitive advantage for Fuyao Glass America Sourcing Decision - as it was, building up the "edge" that will get the company the ideal position and differentiates it from the industry rivals. There are two primary methods for accomplishing this inside a cost leadership methodology:

• Increasing profits by decreasing expenses, while charging industry-average prices and costs from consumers
• Increasing share of the overall industry by charging lower costs, while at the same time making a sensible profit on every trade since Fuyao Glass America Sourcing Decision has controlled and reduced expenses.

The cost-based strategy and system are that – it includes Fuyao Glass America Sourcing Decision being the pioneer regarding cost in the industry and market where it operates. Just being among the most minimal cost producers isn't adequate, as the company leaves itself wide open to aggressive attacks by other producers and players in the industry. These players may undermine Fuyao Glass America Sourcing Decision ’s costs and in this way hinder the company’s endeavours towards the expansion of its share of the overall market pie.

5.1.3.1. Achieving cost differentiation

Based on this, Fuyao Glass America Sourcing Decision should be sure that it can accomplish and keep up the leading position before deciding on choosing the cost leadership strategy. Fuyao Glass America Sourcing Decision will be able to become effective in accomplishing cost differentiation by having:

• Access to the capital expected to put resources into innovation that will cut expenses down.
• Very proficient coordination’s.
• A minimal effort base (work, materials, offices), and a method for economically cutting expenses beneath those of different competing players.

5.1.3.2. Achieving cost leadership

However, Fuyao Glass America Sourcing Decision should ensure contingency for imitation by competition, as well as be prepared for competing payers to imitate its cost-effectiveness strategy to decrease and control their costs, and increase the overall share of the pie for their products as well. It is therefore important that Fuyao Glass America Sourcing Decision does not only settle for one means of cost leadership but continually improves. This can be done through several different methods:

• Engaging and applying the Japanese technique of kaizen
• High efficiency
• High limit use
• Use of dealing capacity to arrange the least costs for generation inputs
• Lean production techniques (for example JIT)
• Effective creation process
• Effective dissemination channels

5.1.3.2.1. Overall Cost Effectiveness through Cost Leadership and Cost Differentiation

• Cost differentiation and leadership strategy for Fuyao Glass America Sourcing Decision will be based on the nitty-gritty.
• Cost initiative endeavours towards slicing expenses to a base to give clients lower costs and in this manner will help the company of Fuyao Glass America Sourcing Decision to reserve funds.
• Cost leadership strategy requirements regularly identify with high specialized abilities and access to capital
• The company should also resource into innovation and guarantee economies of scale.

5.2. SWOT Analysis

• Fuyao Glass America Sourcing Decision maintains its competitiveness as one of the best and the most premium locally and internationally through inventive systems that use business strengths in overcoming the weaknesses present in the business inherently.
• Also, they make use of these internal strengths and weaknesses to make use of opportunities and ward off potential threats, for example, the dangers in the business condition and market.
• These factors can be distinguished, assessed, and analysed through the strategic SWOT tool.
• The SWOT analysis and review for Fuyao Glass America Sourcing Decision talk about the strengths and weaknesses (internal core strategic components) intrinsic in tasks in the business, and for the Fuyao Glass America Sourcing Decision organization.
• The assessment and analysis of SWOT likewise look at the opportunities and threats (external key variables) identified with the nature of competitiveness in the market and industry, which is mostly founded based on the level and intensity of competition and rivalry – as may be gauged through Porter's Five Forces analysis of Fuyao Glass America Sourcing Decision.

5.2.1. The need for SWOT because of expanded operations of Fuyao Glass America Sourcing Decision

• Fuyao Glass America Sourcing Decision is present and operational in different markets, and each of the markets poses unique yet various difficulties in developing the business.
• Fuyao Glass America Sourcing Decision and its portfolio in these many markets have expanded over time and as the organization grows, more items are added to its portfolio in addition to its pioneer product.
• With regards to the SWOT analysis model, these circumstances of multiple operations and multiple presences in various markets make a difficult business situation where the organization needs to utilize various arrangements of skills that match different markets.
• Core elements of different nature – both internal and external to the organization, can help increment Fuyao Glass America Sourcing Decision ’s accomplishment in contending with different companies and other businesses – both locally and internationally.
• The SWOT analysis for Fuyao Glass America Sourcing Decision is presented below:

5.2.2. Fuyao Glass America Sourcing Decision Strengths (Internal Strategic Factors)

This section of the SWOT analysis model works with the inner variables that the organization can use as competencies and strengths to address shortcomings and ensure the business against rivalry. For this situation, Fuyao Glass America Sourcing Decision ‘primary qualities are:

5.2.2.1. Strong brand image

• Fuyao Glass America Sourcing Decision is one of the world's most premium, well known and most famous brands.
• The organization has a developing populace of steadfast clients, which adds to the soundness of the business.

5.2.2.2. International distribution network

• In the SWOT analysis model, the global distribution network through directly owned subsidiaries, or contracts with third-party agents further strengths Fuyao Glass America Sourcing Decision by supporting activities.
• For instance, the organization has a worldwide system of providers that are deliberately chosen dependent on criteria relating to quality, for example, of raw materials as has been discussed in the value chain - primary and supporting activities.

5.2.2.3. Strong investment in research and development, and high focus on innovation

• The focus on innovation not only keeps the company apart but also facilitates its industry leadership.
• The internal core strengths and competent variables recognized in this section of the SWOT analysis of Fuyao Glass America Sourcing Decision demonstrates that the business has qualities that advance strength through expansion and a worldwide production network.

5.2.2.4. Focus on market research

• Additionally, the organization steadily expands its business
• This is done through contracts with offshore agents and licenses. Also, the company continues to broaden its portfolio by adding new products based on market research and consumer data.

5.2.3. Fuyao Glass America Sourcing Decision Weaknesses (Internal Strategic Factors)

Business weaknesses or shortcomings are recognized in this part of the SWOT analysis. Shortcomings are inward factors that diminish or cut off business capabilities and strengths. Fuyao Glass America Sourcing Decision shortcomings are as per the following:

5.2.3.1. Premium prices for most portfolio products

• Fuyao Glass America Sourcing Decision has a premium brand image attached, and thus all its products in the portfolio are priced highly
• This expands overall revenues yet decrease the affordability of its items.
• This internal key factor is a shortcoming since it confines the organization's share of the overall industry, particularly in territories with generally lower disposable earnings

5.2.3.2. Standard and benchmarked regulations and business procedures for all portfolio items

5.2.3.2.1. generalization.

• Likewise, this SWOT analysis highlights that generalized standards for all portfolio products may be a weakness because it restrains the adaptability of these products and items in the business.

5.2.3.2.2. Imitability

• What's more, numerous Fuyao Glass America Sourcing Decision items are imitable.
• Several items in the portfolio have been imitated by completion, and are also being provided by them at different price points.
• Though the quality is unique to Fuyao Glass America Sourcing Decision, the competing players have also developed close enough, and acceptable products.
• This business condition engages competition, as has been highlighted already.

5.2.3.3. Fighting the challenge of imitation

• The internal factors in this section of the SWOT analysis of Fuyao Glass America Sourcing Decision demonstrate that the business must create qualities to diminish the unfavourable impacts of impersonation and the impact of high value focuses on the organization's share of the overall industry in the international and local business.

5.2.4. Opportunities for Fuyao Glass America Sourcing Decision(External Strategic Factors)

This section of the SWOT analysis and strategic model focuses on external components that opportunities for business development and advancement. For this situation, the key opportunities accessible to Fuyao Glass America Sourcing Decision are:

5.2.4.1. Green business products

• With an increased focus and awareness of health and wellness lifestyles by consumers, it is important that Fuyao Glass America Sourcing Decision recognizes this as a viable business opportunity.
• Increased numbers of consumers are shifting to the green lifestyle of consuming environmentally friendly and organic products.
• Fuyao Glass America Sourcing Decision should focus on the expansion of the product portfolio: inclusion of green products and environmentally sustainable services are suggested.

5.2.4.2. Expansion in emerging markets

• Fuyao Glass America Sourcing Decision can expand its income streams through expansion and developing presence in emerging markets – such as Brazil, China and India.
• This opportunity draws consideration far from the U.S. region, where the majority of the organization's incomes are created.

5.2.4.3. Business enhancement

• Likewise noteworthy in this SWOT analysis of opportunities is the opportunity of business enhancement and further business development.
• This can help improve the long term position of Fuyao Glass America Sourcing Decision.
• For instance, through higher diversification of the portfolio and the overall business, the Fuyao Glass America Sourcing Decision organization can diminish its reliance on its present enterprises, and along these lines work towards improving its general income development.

5.2.4.4. Partnerships with different firms

5.2.4.4.1. diversification through partnerships.

• Diversification is right now a minor strategy as can be observed from Fuyao Glass America Sourcing Decision ’s competitive strategy and its overall directive strategy as well.
• The business environments likewise display the chance to enhance the organization's competencies and strengths
• This will also increase its share of the overall industry through the association’s s with different firms. For example, a partnership with real retailers improves dispersion.

5.2.4.4.2. Development of corporate clientele

• The company can also formulate new B2B relations and contracts with other companies and corporate entities.
• The external key factors in this section of the SWOT analysis demonstrate that Fuyao Glass America Sourcing Decision can improve its industry position by building up its activities to make use of the opportunities in the international business markets.

5.2.5. Threats facing Fuyao Glass America Sourcing Decision(External Strategic Factors)

Threats against the Fuyao Glass America Sourcing Decision business are distinguished in this piece of the SWOT analysis. Threats are external components that decrease or breaking point of business execution. In this case of Fuyao Glass America Sourcing Decision, the following section looks at, and assesses threats that apply to the organization in question:

5.2.5.1. Price wars by competition

• Fuyao Glass America Sourcing Decision competes with a wide assortment of firms in the local as well as the international market.
• For instance, the organization competes against significant premium companies as well as against cheaper companies that offer cheap priced items and products.
• This external but important factor in the SWOT assessment undermines Fuyao Glass America Sourcing Decision because such competing players can lessen the organization's share of the overall industry by competing based on low prices and overall low costs of production.

5.2.5.2. Increased competition

• Additionally, this SWOT assessment also analyses increased competition as a noteworthy threat against the business.
• In light of the organization's shortcomings, the risk of imitation includes firms that attempt to duplicate the taste, look and feel of Fuyao Glass America Sourcing Decision items.
• Saturated market place and industry can also lower sales of the organization and shrink its share of the overall pie
• Increased competition can also lead to the increased cost of doing business for the organization if they bring innovative processes, and implement novice systems to control costs

5.2.5.3. Independent players

• The industry environment and profitability are liable to invite independent developments, and small-scale players.
• These players may not have high levels of integration and may be retailers and marketers for items produced during backward integration.
• Strategic marketing techniques and promotional communications are expected to neutralize the impacts of these patterns.
• This section of the SWOT analysis of Fuyao Glass America Sourcing Decisionrecognizes external key factors that force difficulties to international expansion and growth of the company as well as highlight market infiltration.

5.3. TOWS Matrix

TOWS analysis will allow Fuyao Glass America Sourcing Decision to identify and understand the strategic choices and future strategic options and directions available to the company. The TOWS matrix and analysis will help Fuyao Glass America Sourcing Decision to look at various possible future and long term situations, and ill force Fuyao Glass America Sourcing Decision to look at these options by questioning strategic directives such as:

• How will Fuyao Glass America Sourcing Decision make the most of its strengths and core competencies?
• How will Fuyao Glass America Sourcing Decision Circumvent its weaknesses and shortcomings?
• How will Fuyao Glass America Sourcing Decision capitalize on the various opportunities present in the business environment?
• How will Fuyao Glass America Sourcing Decision ward off, and manage the threats that are present in the external business environment?

The analysis of the SWOT and the subsequent assessment and development of the TOWS matrix will allow the Fuyao Glass America Sourcing Decision to be able to identify the following answers:

• Strengths and Opportunities (SO) – How would Fuyao Glass America Sourcing Decision be able to utilize on its strengths to exploit the opportunities?
• Strengths and Threats (ST) – How would Fuyao Glass America Sourcing Decision be able to exploit its strengths and core competencies to keep away from genuine and potential threats?
• Weaknesses and Opportunities (WO) – How would Fuyao Glass America Sourcing Decision be able to capitalize on its opportunities to overcome the weaknesses that Fuyao Glass America Sourcing Decision is encountering?
• Weaknesses and Threats (WT) – How would Fuyao Glass America Sourcing Decision be able to limit its weaknesses and evade threats?

5.3.1. TWOS matrix visual presentation

Table 1 TWOS matrix for Fuyao Glass America Sourcing Decision

• The TOWS Matrix is a moderately basic strategic tool used by Fuyao Glass America Sourcing Decision for producing key alternatives and identifying key strategic alternatives that may be pursued by Fuyao Glass America Sourcing Decision.
• By utilizing it, Fuyao Glass America Sourcing Decision can take a look towards understanding that it can best exploit the opportunities present, while at the same time also limit the effect of shortcomings and ensure itself against threats.

5.4. ANSOFF Matrix

• Fuyao Glass America Sourcing Decision has viably utilized this instrument to develop a procedure for accomplishing competitive advantage in the industry and various markets it operates in.
• Market development
• Market penetration
• Product development
• Product penetration

The following section highlights the various strategies that may be used through the Ansoff matrix. These strategies have been highlighted and identified through vigorous research methodologies, as well as through expert analyst data and opinion.

5.4.1. Market development strategies

5.4.1.1. advertising and promotion of products.

• One of the most popular means of developing a market is to use marketing strategically.
• By making use of advertising and marketing communications, the company will be able to disseminate information about its product, and the various benefits of consumption to its target market easily.
• Also, the use of social media for marketing will, at the same time allow the company to communicate directly with the consumers, and answer their queries.

5.4.1.2. Education about product consumption.

• The company can make use of widespread marketing campaigns using traditional means as well as means of social media to increase awareness of their product amongst the target market.
• This task of educating the markets will give the company a first-mover advantage, as well as develop important functional appeals for the product.

5.4.2. Market penetration strategies

5.4.2.1. geographical expansion.

• The company can expand into other markets through its previous experience, as well as through partnerships and contracts with other agents and parties.
• The company can also develop subsidiaries, as well as offer its products through franchising as well as licensing.
• The geographical expansion is suggested into emerging economies because of the favourable income levels of the consumers, as well as the growing infrastructure.

5.4.2.2. Increased number of retail outlets and retail presence

• The company can penetrate existing markets by offering more shops or making its product more widely available.
• This may be done through increasing the accessibility of the product at places where the target consumers are expected to purchase from, as well as improving the interaction of the product with consumers at different touchpoints.

5.4.2.3. Online retailing

• Another means of improving market penetration is through online retailing. Fuyao Glass America Sourcing Decision can stock its products on online retailing sites locally and internationally.
• This would help the company improve sales, accessibility, as well as reach higher levels of target consumers. All of this, in turn, would increase market penetration.
• Besides, it would also help the company maintain and control costs for Fuyao Glass America Sourcing Decision, and thereby help it achieve cost leadership in the industry

5.4.3. Product development strategies

5.4.3.1. research and development.

• To be able to develop new products, the company should have a focused interest and budget sending allocated to new product research and development.
• This research would take a basis in the consumer market and the overall market trends, to identify the gap in consumer demands, and market availability of different products.
• The new product would then generally be aimed towards fulfilling this gap.

5.4.3.2. New product development labs

• The company should have dedicate incubation labs for the development of new products.
• This means that this development should be a focused and separate entity that should focus on the company’s innovation.
• The company should also hire the right talent for business development and innovation to be able to achieve targets and goals accordingly.

5.4.3.3. Market testing

• New products should follow PD cycles for testing before launching in a market.
• This will ensure that the company can fix any loopholes present in the product, as well as incorporate positive feedback.

5.4.3.4. Strategic Marketing

• The company should also have a focused and strategic budget for marketing and communications allocated for new product development.
• This is because the company will need to increase the appeal, as well as develop functional and emotional appeals and characteristics of the new product.
• Communicate with the consumers to enhance sales as well as increase likeability and rate of consumption and trial.

5.4.4. Product penetration strategies

5.4.4.1. acquiring personally owned retail to strengthen its presence..

• One way of increasing product penetration is that the company directly manages and controls sales operation through owned retail.
• This will give the campy leverage over communication, as well as product stocking and placement.

5.4.4.2. Diversification of portfolio

• The company can further expand its portfolio as a means of product penetration.
• The expansion of the portfolio will allow the company to reach a different and diverse target group, thereby increasing the overall share of the pie for the company
• This will also increase Fuyao Glass America Sourcing Decision ’s products’ accessibility to different consumers.

5.5. SAF criteria

5.5.1. how fuyao glass america sourcing decision can strengthen its strategic position using saf criteria.

• When Fuyao Glass America Sourcing Decision is deciding upon a certain strategic direction for the future, it will face challenges.
• Choosing the right strategy at the right time can be a daunting task for managers.
• It is therefore important that managers look at the strategy from aspects of its value and viability.
• The principal thing the managers of Fuyao Glass America Sourcing Decision will have to do is settle on a foundation by which to evaluate the different strategic alternatives.
• They will also need to choose a viable methodology is to assess the different strategies independently.
• Strategies can be evaluated and assessed using criteria of suitability, acceptability and feasibility (SAF).
• The following section weighs different strategies and possible future directives for Fuyao Glass America Sourcing Decision based on the SAF criteria.

5.5.2. Creation of a menu for high-income groups

5.5.2.1. suitability, 5.5.2.1.1. new market development.

• This strategy is suitable because it will allow Fuyao Glass America Sourcing Decision to develop new markets by tapping into new consumer groups.
• At the same time, it will allow the company to penetrate higher into existing markets.
• Both these possibilities can be realized because Fuyao Glass America Sourcing Decision invests in consumer research and has a strong financial standing.

5.5.2.2. Acceptability

5.5.2.2.1. alignment with organizational goals.

• The strategy is acceptable because it is in line with the company’s goals and mission.
• Also, it is also in line with the internal marketing and culture of the organization.

5.5.2.2.2. Financial risk

• As such, the strategy does not pose any risk – financially and otherwise and is also palatable for stakeholder reactions.
• Lastly, the strategy promises to give high returns. Overall, the strategy appears to be highly acceptable.

5.5.2.3. Feasibility

5.5.2.3.1. market research and financial cushioning.

• This strategy is highly feasible.
• This is because the company already operates along with this mission, and has high levels of market research and information regarding high-income groups.
• This information could be utilized for creating a suitable menu for high-income groups.
• At the same time, the company also has the financial power to introduce premium menu items for the higher class – to expand its menu accordingly.

5.5.3. Creation of a healthy menu for existing target consumer groups

5.5.3.1. suitability, 5.5.3.1.1. diversification of product portfolio.

• This strategy would require a high diversification of the product portfolio.
• This is suitable because the company has the resources and the information to make strategic decisions about diversification.

5.5.3.1.2. Innovation

• Moreover, the company also innovates regularly, which can be an added benefit for the suitability of the strategy.

5.5.3.2. Acceptability

5.5.3.2.1. risk of financial investment.

• This strategy appears to be moderately acceptable.
• This is because it poses a risk through diversification with high levels of finances invested, the company can never be too sure of the consumer reactions.

5.5.3.2.2. Risk of new product development

• Therefore, the risk of new product development and consumer reaction would be there.
• Also, the acceptability is also low because of stakeholder reaction – who might not all agree with the expansion of the portfolio horizontally – i.e. The broadening of the portfolio away from the core offerings.
• Lastly, if the strategy works, it promises high returns, which make sit low to moderately acceptable.

5.5.3.3. Feasibility

5.5.3.3.1. market research and financial cushioning.

• This strategy is also feasible for the company.
• This is because of the company’s strong financial position, as well as its ability to researching into different market trends and patterns.
• The identification of these trends and patterns is important for being able to decide which market and industry to diversify into for the company.

5.5.4. Increasing existing advertising expenditure

5.5.4.1. suitability, 5.5.4.1.1. focused budgeting.

• This strategy is suitable because the company has high and focused budgeting for marketing and communications.
• This would also allow Fuyao Glass America Sourcing Decision to withdraw from failing markets or markets that have a weak share, and gain access to rising markets.

5.5.4.1.2. Strategic marketing

• The company will be able to exploit its research and development for strategic marketing
• Fuyao Glass America Sourcing Decision will also make use of existing systems and products to reach new consumer groups through marketing.

5.5.4.2. Acceptability

5.5.4.2.1. return on investment.

• The strategy is acceptable because it poses a low risk in terms of investment in strategic marketing.
• Also, it promises high returns on investment in marketing through the promise of increased awareness, increased penetration, increased brand recall and brand recognition – all of which will translate into higher sales.
• Lastly, stakeholders will also not frown upon this strategy, which makes it more acceptable to implement.

5.5.4.3. Feasibility

5.5.4.3.1. market research and financial cushioning.

• The strategy is highly feasible because the company has a strong financial standing.
• This means that the company can afford to increases budget for marketing purposes.
• However, for the stagey to be successful, it is important that the company aces sure that all promotional campaigns developed are in sync with consumer needs, demands and behaviour.
• This is again possible for the company because of its investment in research and development.

6. FINAL RECOMMENDATIONS

Based on the overall internal and external analysis done for Fuyao Glass America Sourcing Decision, this section will offer recommendations which will help the company take on strategic directions that will enhance its core competencies and capabilities, as well as reduce its chances for risks and threats? The following recommendations are thus made for Fuyao Glass America Sourcing Decision:

6.1. Strengthen distribution network

6.1.1. control.

This is an important strategic recommendation as it will allow higher control to the company over its products in different markets. The company will be able to control where its products are placed, and thereby, will also be able to enhance the accessibility and easy availability of its products.

6.1.2. Stronger relation with consumers

At the same time, the strengthening of the distribution network will allow the company to work more closely with end consumers by being able to reach them with the same high quality of products across different markets.

6.2. Develop unique marketing tactics

6.2.1. higher penetration.

This strategic recommendation will help the company reach a higher number of consumers and penetrate deeper into target consumer groups. Also, this strategy will allow the company to increase trial and consumption and sales of its products.

6.2.2. Forming a partnership with consumers

Unique marketing tactics will involve new and informed strategic means of communicating with the consumers and engaging them with the brand. One way that this can be done is by making consumer co-producers for the brand. Another way that Fuyao Glass America Sourcing Decisioncan do this is through co-branding with other similar, yet dissimilar brands and companies to enjoy higher market visibility amongst target consumers.

6.3. Adapt to different cultural aspects of different markets

6.3.1. identify different consumer group characteristics.

Each market and target group has distinct characteristics. This recommendation is suggested so that the company can connect better with different target groups in different markets.

6.3.2. Adapt to and respond to characteristics

By adapting to different cultural and regional characteristics, the company will be able to present itself better to target consumers – who would then feel a greater affinity, and more likeliness of consuming the product and the service.

6.4. Expand into new regions

6.4.1. market expansion.

Another strategic recommendation for Fuyao Glass America Sourcing Decisionis to expand into newer regions and markets. This can be done by expanding into new markets, firstly. This expansion will give the company exposure to new consumer groups. Increase the overall consumption rate, as well as diversify income streams. Also, it will give the company related expansion exposure regionally as well as internationally.

6.4.2. Product diversification

Another means of expansion is through product diversification. By adding new products, the company will be Abe to penetrate deeper into existing markets bye exploring new consumer groups, and new target consumer groups. This will also diversify income streams for the company, and increase its overalls hare of the market.

6.5. Strengthen value network

By strengthening the value network further, and by adding quality and enhanced elements at different stages, the company will be able to maintain competitive advantage, as well as put off new players from the industry by increasing barriers to entry. This will allow the company to maintain sustainable competitiveness over other players, as well as maintain a possible leadership position in the local and international markets and industry.

7. References

Bierly, P. & Hämäläinen, T., 1995. Organizational learning and strategy. Scandinavian Journal of Management, 11(3), p. 209–224.

Cole, G., 2003. Strategic Management. Boston: Cengage Learning EMEA.

Collier, D. & Evans, J., 2009. Operations Management. Boston:MA: Cengage Learning.

Haron, A., 2016. Standardized Versus Localized Strategy: The Role of Cultural Patterns in Society on Consumption and Market Research. Journal of Accounting and Marketing, 5(1).

Hartline, M. & Ferrell, O., 2006. Marketing Strategy. Boston:MA: Cengage Learning.

Keller, L., 2006. Strategic Brand Management Process, in Perspective of Modern Brand management. s.l.:s.n.

Kotler, P., 1997. Marketing management: Analysis, planning, implementation and control. New Jersey: Prentice-Hall.

Kotler, P., 211. Reinventing marketing to manage the environmental imperative. Journal of Marketing, 75(4), pp. 132-135.

Kotler, P., Armstrong, G., Adam, S. & Denize, S., 2014. Principles of Marketing. Melbourne: Pearson, Australia.

Kotler, P. & Keller, K., 2009. Marketing Management. New Jersey: Prentice Hall.

Lehman, D. & Winer, R., 2005. Product Management. New Delhi: McGraw-Hill Education.

Murray, A., 1988. A contingency view of Porter's “generic strategies”. Academy of management review, 13(3), pp. 390-400.

Reddi, C., 2009. Effective Public Relations and Media Strategy. New Delhi: PHI Learning Pvt. Ltd.

Schivinski , B. & Dabrowski , D., 214. The Effect of Social Media Communication on Consumer Perceptions of Brands. Journal of Marketing Communications, Volume 12, pp. 1-26.

Thompson, J. & Martin, F., 2010. Strategic Management: Awareness & Change. Hampshire: Cengage Learning EMEA.

Weng, X., 2002. Local Brand Strategy. Hangzhou: Zhejiang People’s Publishing House.

Wirtz, J., 2016. Winning in Service Markets: Success through People, Technology and Strategy. Singapore: World Scientific.

Witcher, B. & Chau, V., 2010. Strategic management: Principles and practice. s.l.:Cengage Learning EMEA.

Witcher, B. J. & Chau, V. S., 2010. Strategic Management: Principles and Practice. Boston: Cengage Learning EMEA.

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