Shanzhai Swiss-Style: Bühler’s Partnering Strategy in China

The case describes the strategies, investments and partnerships of Bühler China, and how the China operations of this Swiss hidden champion grew from annual sales of RMB 300 m in 2004 to RMB 2.7 bn a decade later. Behind the past successes of this machine building firm is the main protagonist Dieter Voegetli, the China expat president, who according to Western management practice took highly unorthodox decisions. One such decision was to acquire a local firm and then incorporate the Chinese entrepreneurs as business partners with a long-term share repurchase agreement incentive structure. The case also suggests novel approaches to run operations and to devise strategy. The role of headquarters, the issue of local autonomy, the empowerment of Chinese management, or preemptive strikes against local competitors are all reviewed. One of the leitmotivs of the case is how to “learn from China”. Is the appropriation of Chinese concepts such as Shanzhai feasible? Does China learning also apply to the building of innovation capabilities for global competitive advantage? As those questions are considered, Bühler China faces novel challenges. Keeping the growth momentum in this ultra competitive Chinese business environment appears to be increasingly difficult.

Learning objectives

The learning objectives for your case, up to five at 250 characters each, should be provided separately below. Clear, concise objectives will aid users in selecting the most suitable case for their teaching requirements.

The learning objectives of the case revolve around three areas:

Doing business in China: The strategies and operational approaches for entering the China market via the FDI route, by visiting JV arrangements, incentive structures for local partners, competitive moves or the relationship with headquarters.

China Innovation, Shanzhai: The Shanzhai concept is brought to life (beyond dated copy-paste notions) as a model that is potentially interesting to management, especially at Western firms active on the global stage where speed to market and cost-advantage are critical.

Cross-cultural management: The cultural angle permeates the case describing the protagonists’ business savvy and mindset thus emphasizing the cross-cultural skills that are necessary to integrate in China and ultimately succeed.