From Imitation to Innovation Zongshen Industrial Group - Essay Example

Zongshen acquired human sources from Japan, SOE leaders and Chinese government officials. It developed Masters in Combustion Engines and Mechanical Engineering to improve skills of local students. The company developed its staff’s skills on technology and engineering by organizing foreign visits to joint venture partners and other companies. The decision of reverse merger was too challenging for Zongshen and Zou because the idea for quick listening was attractive but, on the other hand, Zongshen was investing in a company which was about to be delisted.

However, Zongshen took a bold step and the original company eventually transformed to Chongqing Zongshen Power Machinery Co. Ltd, the largest engine producing business. Another critical phase of Zongshen was its expansion to acquire Canadian based PEM technology. Zongshen took a smart decision to purchase PEM, it first merged with a Toronto listed capital asset pool company, Norstar Ventures. Then it formed Zongshen PEM Power Systems. This was later expanded to a whole Chinese subsidiary as Zongshen PEM (Canada) Chongqing Hydrogen Energy Ltd.

In 2006, another subsidiary Zongshen Electric Vehicle Company Limited was developed. These two focused over the production of premium e-bikes, giving edge to Zongshen over its rivals. The initiative of ‘blue ocean’ strategy for Cyclone products was very attractive. But the way this strategy was implemented cannot be appreciated. The main flaw with this strategy was that the consumers couldn’t relate such a premium quality and price product to Zongshen. Following are the Yellow Tail wine case implications for Zongshen to implement their ‘blue ocean’ strategy. 2. Reduce consumer confusion.

In Chinese market there was a need for quality and performance but it was not yet realized by the consumers at large. So they could not relate Cyclone products’ premium differentiation to their need. Therefore, the