ASIMCO Automobile Harvard Case Solution & Analysis

Problem Statement

The Asian strategic investment company is a recognized automobile component manufacturing enterprise that is notably acknowledged in the automobile industry as ASIMCO, positioned in the city of Beijing China. Presently, the chairman of the company is extremely anxious about the pecuniary policy of the Chinese government related to the ecological well-being of the country in terms of fuel generation. Before the policy is being implemented, the company has to take instant actions to modify its technical expertise otherwise ASIMCO would not be able to sell its current merchandises within China as well as in foreign countries..

Major stakeholders in the Chinese auto components industry


The company is highly affected by the government policies and rules and regulation regarding automotive industry.

Customers/ Dealers

They are the main stakeholder in any business because of them the company has to modify its operation as well as product pricing and placement strategy.

Shareholders and employees

These are the main stakeholders of the company because their wealth is dependent on company’s profitability. However, employee’s stake is the same but with a huge difference of income level.

If ASIMCO’s sales declines rapidly then, it will be liable to answer its investors for that particular situation, and will ask them not to lose hope and remain optimistic for their investments.

Standards would you follow in making any decision in Automobile industry


Automotive parts manufacturing industry is a huge capital investment industry which requires innovative products. The market is highly saturated because of intense competition between the auto component makers.

Corporate social responsibility

Introducing a product that must produce on the principles of keeping the safety of living being in mind is a special responsibility of the firm. In the automotive industry, the engines must be manufactured in the way that the public would be less affected from smoke emission.


People would be least interested in a product that is low-priced as well as low quality. So the product must maintain a certain level of price scheme but the company must focus on the availability of high-quality product.

Reasonably priced products

The product must be at the most suitable price range, comprising to the income level of the target market.

Alternatives for ASIMCO’s fuel systems

The Chinese government has banned the law of supplying emission free auto manufacturing components in the market to preserve their environmental health. To avoid the loss of automobile parts supply the Company should go for Alternative Fuel Option that would limit the hazardous impact of released radiation through old engines.

Hence, the company needs to pay more attention in evolving alternative fuel vehicles that uses fuel other than petroleum, such as biodiesel and ethanol gas, which will serves positively to the environmental health.

Alternative # 1


Building biodiesel stations would be an expensive move for the company; however this can be useful for the company in terms of a temporary workable solution until a new technology could obtain for permanent use. In comparison with other investment decision, this option would serve the Immediate Company’s need with less investment and maintenance cost.

Instead of bringing back the entire delivered auto component orders, it would be better to introduce an alternative fuel in place of petroleum and diesel, which would be beneficial for ASIMCO.


For the application of this option, the company needs to aware its customers so that they would be able to use the gas stations by themselves.

This scenario could also jeopardize company’s technological shift that a customer might refuse to buy this technology because of ongoing traditional ways of taking fuel services.

Alternative # 2


The main hindrance in developing hybrid cars is the occurrence of huge capital expense, but the company’s financial position makes it highly reluctant to take this alternative into action.

This change would also provide a permanent solution for ASIMCO’s problem of obsolete technology.


It is a long-term investment plan that requires, and the company cannot build this technology by its research and development. The company needs to merge with some other international automobile firm which result in the exchange of technologies. This complete move requires a long time and large investment that the company cannot afford immediately.......................

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