Nine Dragons Harvard Case Solution & Analysis

Nine Dragons  Case Solution

1.     Strategic Management of Nine Dragon:

The book of Strategic Management highlights the importance of strategic thinking in organizational management. This has also been seen in the case of Nine Dragon as well. Cheung Yan, the owner of Nine Dragon, has incorporated the Strategic Management approach. Her strategy was unique as she was capable of overseeing and utilizing an opportunity. She smartly evaluated the business opportunities in the U.S and moved there and succeeded afterwards. Her vision was to use the opportunity in given time which helped her to become the number one exporter in the paper industry. She had effectively used the resources which were available in the U.S. She incorporated the U.S. style of doing business in her strategy which assisted her in pursuingher business in the US successfully. She believed that new talent must be given an opportunity to explore more ability from them. Her strategy to manage human resource effectively is also a reason for her success. She wasn’t afraid to take risks in her business. She had a broad vision for her company as she was not wealth oriented. Her distinctive strategy regarding every aspect of business helped her to grow the business steadily. (190)

  1. Robert’s MacintoshMacLean has described the strategic thinking and approach while conducting business. The case of Nine Dragon also used strategic approach to grow further. When Cheung Yan established Nine Dragons in 1995, she faced the challenge regarding the domestic paper and packaging as at that time the paper packaging industry was not developed in Hong Kong. Due to the lack of paper packaging industry in Hong Kong, the company had to rely upon export for almost everything, and this was an expensive procedure. Moreover, she identified that Nine Dragons was established with a bank loan, and the loan that was given to the company was without considering the increasing demand for packaging for exports. Therefore, the export of paper packaging became an expensive procedure for the company to meet the market requirements. However,afterwards, the scenario changed, and the situation came under control when the company was registered in the stock market and went public in Hong Kong. This contributed the company as its share prices increased up to 40%. (173)

The increasein the share price helped the company in a way that the debt-capital ratio reduced(the debt-capital ratio is an amount of a company’s financial leverage, and debt includes company’s short term and long term obligations/loans, capital includes owners’ equity). The debt-capital ratio of Nine Dragons had declined from 187% to 33%, which contributed towards adding the profit for the company. It is expected that the increasein share prices also proved to be beneficial for Cheung Yan as she became the richest womanin the world. (89)

3.   Rule of thumb

A rule of thumb is the discipline that provides a guideline and simplified advice regarding the particular matter. It presents practical instructions based on past experiences and knowledge. Moreover, companies use this method to forecast market needs in future and to analyze their environment. (43)

Foresight is the key to Nine Dragons’ success and it is considered to be as the rule of thumb. It is expected that the foresight helped Nine Dragon to predict what would happen in future. Nine Dragon’s strategy to pursueits higher goal facilitated it to make strategies for the future in order to compete with others. After analyzing and evaluating its competitors in the market, Nine Dragon started to use an efficient machine with high production capacities as the other companies were using less efficient machines with low production capacities. It was also expected to install more machinery every year based on the foresight of the future market demand. (111)................

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