Sunton Manufacturing in Cambodia: Exit or Remain?
(6 pages of text)
Case (Gen Exp)
In January 2017, the founder of Sunton Manufacturing in Wuxi, Jiangsu Province, China, boarded a flight to Cambodia. He had to tackle the performance issue of the company’s garment manufacturing joint venture (JV) there—after two years in operation, it had run out of cash. After meeting with his JV partner, he concluded that the existing JV in Sihanoukville was beyond repair. He now needed to decide whether to exit Cambodia or to remain there, albeit in a different city and with a new partner. A new factory would require further investment. If he quit Cambodia, could his company survive and develop in the future?
This case can be used in an undergraduate- or graduate-level course on international business, international management, or international entrepreneurship. With Sunton Manufacturing being a relatively small business, students are able to understand its operations. The case would fit well in introducing the internationalization process. The case has three primary teaching objectives: (1) investigate the motivations of foreign investments in emerging economies; (2) discuss the formulation of internationalization strategies, which are identified from three perspectives: resource-based, institution-based, and industry-based; and (3) consider the comfort–competency evaluation system in the partner selection process of an international joint venture. After working through the case and assignment questions, students will be able to do the following:
- Understand how to align market, mode, and timing with the frameworks/models/theories common in business courses.
- Decide whether or not it makes sense to locate one’s first international investment in a country which is arguably difficult to do business in, especially when there are nearby countries which may have more advantages.
- Discuss when a contract supplier is appropriate and feasible.
China; Cambodia, Small, 2017
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