Zhuyeqing Tea Co.: Reassessing Strategic Direction
(6 pages of text)
In 2018, the chairman of Sichuan Mt. Emei Zhuyeqing Tea Co., Ltd. (ZT), a tea enterprise founded in 1998, faced a strategic decision. ZT had become an economic entity in China, having successfully integrated tea plantation, cultivation, processing, and marketing. Since 2013, however, ZT had experienced sluggish growth. According to a third-party research report, the company’s development bottleneck was caused by fuzzy strategy and an out-of-focus operation. The company’s chairman needed to decide the next steps for ZT. Should ZT continue to pursue its cost leadership strategy by developing multiple brands and expanding geographically? Or should ZT adopt a focusing strategy, by building its green tea brand, and moving in stages toward the goal of national market expansion?
This case is suitable for undergraduate- and graduate-level courses on strategic management or marketing management to discuss competitive strategies and value creation activities. After working through the case and assignment questions, students will be able to
- analyze the macro environment of an enterprise and identify the external factors that affect strategic decisions;
- apply Michael Porter’s Five Forces Model to analyze the intensity of industry competition and profitability, and evaluate their impact on a company;
- depict the value chain of the enterprise and analyze the advantages and disadvantages of key factors in primary and support activities; and
- consider both internal and external environment analyses to make competitive strategic decisions.
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