Yushan Bicycles Learning to Ride Abroad Harvard Case Solution & Analysis

Yushan Bicycles Learning to Ride Abroad Case Study Solution 


There are a number of recommendations that we need to make to Hamilton, the general manager of Yushan Australia and Zonghan, the director of global sales operations of Yushan. There are different issues with both of them and they are facing conflicts. First of all, we make the recommendations for Hamilton and these are as follows:

  • Hamilton was given sufficient autonomy since the beginning for managing the strategic and operational matter but it seems that some of the decisions made by him were not correct. For instance, he should not have reduced the prices for similar quality bicycles to build the volume but should have focused on brand enhancement and marketing to achieve that.
  • The transfer price conflicts had occurred primarily because of the failure of Hamilton to account for a possible increase in transfer prices during negotiations.
  • If currency fluctuations had also been a problem for higher costs of goods sold for YA, then Hamilton is recommended to hedge the currency exposure using different financial instruments.
  • Hamilton is recommended to train all of his staff members for operating and understanding the new ERP system once all the issues are resolved by Zonghan.
  • Hamilton needs to understand the rationale behind the corporate decision of supplying products to Japan in times of shortages. Hamilton needs to work on developing the accurate forecasts and operate to achieve a breakeven.
  • Hamilton had invested in the staff quickly and as he states that from 6000 to 10,000 units no other staff would be required, therefore, he could have delayed the hiring of additional staff members at YA. Therefore, Hamilton should consider laying off staff to reduce the fixed costs.
  • Hamilton should focus more on updating and producing the weekly forecasts and he should not question this as this does not constitute a lack of trust of the management in him.
  • Finally, Hamilton is recommended to boost the market entry strategy for launching the E-bikes and YA should enter this market before the Chinese E-bike competitor.
  • Hamilton is recommended to utilize the excess plant capacity to produce a high number of the e-bikes.

`After this we make a set of recommendations to Zonghan to resolve the conflict and work in the best interest of Yushan and Yushan Australia. These recommendations are as follows:

  • Zonghan should recommend Hamilton to incorporate the possibility of transfer price increase during the next negotiations.
  • Zonghan is recommended to investigate the new enterprise resource planning system at YA and identify and correct all the issues related to documentation and issues with the system.
  • Zonghan should ensure that he has given sufficient autonomy to Hamilton despite recommending Hamilton on the product strategy for E-bikes in YA.
  • Zonghan should make efforts to train the staff of YA in terms of training them to operate the ERP system, marketing the products, dealing with customer issues and negotiating with the clients.........................

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