1. Fall 2000MGTO321 (L1, L2) -- Dr. JT Li1 Lecture #18: Class Discussion: CP Group Case Reading:1. Case: CP Group (on reserve) 2. Case summary and preparation questions (on web) Key activities of the class 1. Group presentation of the case (Soft copy due) 2. Class case discussion (summary, update, lessons learnt) 3. Written group reports due

2. Fall 2000MGTO321 (L1, L2) -- Dr. JT Li2 Getting in Trim Over the past year, C.P. Group has: Sold Ek Chor China Motorcycle’s 50% share in a Shanghai motorcycle factory Sold a majority stake in Lotus Supercentre, a Thai warehouse-store chain, to Britain’s Tesco Sold 11% of its 7-Eleven operations to Singapore’s Government Investment Corp.

3. Fall 2000MGTO321 (L1, L2) -- Dr. JT Li3 Getting in Trim Over the past year, C.P. Group has: Sold TelecomAsia’s minority stake in Apstar, a Chinese satellite operator Sold $19 million worth of shares in Kopin Corp., a hi-tech electronic research and development firm in Boston Sold shares in a Shanghai brewery to its Dutch partner, Heineken

4. Fall 2000MGTO321 (L1, L2) -- Dr. JT Li4 Getting in Trim Over the past year, C.P. Group has: Expressed interest in selling Sunny’s Supermarket, Vinythai and Petroasia, and in finding a foreign partner for its insurance businesses. Closed several TelecomAsia subsidiaries, including a paging unit, equipment distributor and software consultancy

5. Fall 2000MGTO321 (L1, L2) -- Dr. JT Li5 Past Success of Overseas Chinese Businesses: Circumstances Make Heroes Favorable Environment Booming regional expansion Limited competition (local and foreign) Large export markets Favorable government policies Useful Chinese Traits Drive to succeed Insecurity Family Thrift Strategies Flexibility/entrepreneurship Networking Selection of industries (e.g., local industries, proportionally limited competition) Conglomeration Success Growth Asset accumulation

6. Fall 2000MGTO321 (L1, L2) -- Dr. JT Li6 Established Business Formulas Are No Longer Adequate to Sustain Success: Reasons for Pessimism Increasingly Unfavorable External Environment Intensified global and local competition Unfavorable local environment Limited export growth Problematic Chinese Traits Distrust of non-family Hierarchical management style Lack of drive among younger generations Challenges/Problems Lack of strategic thinking Unrelated businesses Lack of positioning in global industries Lack of growth drivers (technology, brand name, etc.) Lack of professional management Succession problem Sustained Success

7. Fall 2000MGTO321 (L1, L2) -- Dr. JT Li7 In Search of a Chinese Management Style: Real Heroes Can Stand the Test of Time Sustained Success Needs for Change Build a competitive organization with: =>professional management team =>clear strategic focus =>invest in growth drivers Leveraging unique capabilities: =>flexibility =>networking/alliance competence =>entrepreneurial drive Intensified Competition Professionally Prepared Younger Generation Owners