Gold Peak Electronics: R&D Globalization from East to West
Globalization has prompted a new trend of cross-border acquisitions from the East to the West. Fueled by non-traditional motivations, Asian companies are acquiring respected and well-established Western brands, technology, assets and knowledge, and through these acquisitions gaining access to developed markets and talent pools. One such company, Gold Peak Electronics ("GPE"), is a multinational corporation that is among an elite group of Hong Kong electronics companies that design, manufacture and sell premium professional and home electronics products. Acquiring two high-end British premium loudspeaker companies in 1992-KEF Audio and Celestion International-has allowed GPE to take advantage of these companies' well established intellectual assets and R&D capabilities. However, cross-border acquisitions such as these are complicated, requiring companies to take into consideration differing regulations, national cultures, political factors, employee mindsets and work cultures. The acquiring company has also had to deal with human resource issues in its acquisitions, including handling work distribution and promoting employees' sense of job security. Although several years have passed since the acquisition, collaboration between GPEs various R&D sites in the UK, Hong Kong, and China is still not optimal. How can GPE successfully overcome the distances between these locations and promote innovative collaboration between its dispersed R&D sites? Was growth by acquisition of Western companies the best strategy for GPE's growth? This case illustrates opportunities and challenges for global R&D and virtual collaboration across geographic and cultural distances. This case also familiarizes students with the unique challenges in acquisitions of Western companies by Eastern companies, including human resources management and how the process of innovation and innovative thinking differs across countries.