The Journey West: Expanding a Chinese Business to the U.S.
Abstract: Fan Ye has opened a U.S. sales office for the company his father founded in China: Suns International, a manufacturer of electronic switches. While competition in China was based almost solely on cost, Fan knew this would not be enough to break into the U.S. market-particularly in Suns' industry, where the cost of failure was high. Consequently, he decided to obtain the certifications needed to ensure Suns' product would meet U.S. standards. This gamble paid off as Suns attracted OEM customers like Honeywell and Otis Elevator. A main issue and decision point in the case is triggered by Suns taking over the exclusive supply of foot switches to Grainger, a major electronics catalog. ProSwitch, a U.S.-based family business that lost the Grainger account to Suns, has asked to meet with Fan, presumably to talk about a possible cooperative relationship. Fan must now decide whether to compete or cooperate with ProSwitch and what approach to take in the meeting.