TCL Multimedia

Aayush Agarwal 0004/52

Amit Kumar Singh 0040/53

Peter Adam 0273/53

U Varun
 TCL Journey

Around same 1998 In 2004 TCL

Failed attempt In 2002 TCL
TCL founded time started In 1992 TCL In 1993-1994 International By 2003 TCL SIGNED A
to enter Acquired
in 1982 as an developing started selling Launched Expansion became the Joint Venture
Europe in Schindler,
audiotape national color their started with number 1 Agreement
1989 due to television Germanys
manufacturing distribution marketing takeover of player in with Thomson
anti dumping simultaneously seventh
company system in efforts Luks Factory China Enterprises to
laws Largest TV
China in Vietnam form TTE
 Success in China

Strong sales and distribution system

Inventory turnover lowest amongst other domestic competitor
Catered to all types of customers, Both urban and rural

Effective Supply
Strategic alliances with manufacturers and Chain Management,
suppliers like Chengcheng Better forecasting

Company culture:
Centralized financial R&D, Product
Managers were
management Innovation
called Tigers
 TCL was NO 1 in China, with With China entering into the WTO
better capabilities than its more international players were
competitors to enter the Chinese market

Internationalization
Rationale

Many developing countries

Existing relationships with other
possessed potential markets
companies made accelerated
untapped by the companies from
internationalization possible
the Triad
 Schneider Acquisition: A failure

Low purchase price because of local government intervention

Plan to ship low-cost unassembled TVs designed to German
taste and let Schneider assemble and sell locally
Production in Germany proved too expensive resulting in losses
TCL closed Turkheim plant and laid off many German
employees
 JV with Thompson
Export to Thomson
TCL Expertise Export to China
Europe/US Expertise

Production Yes Yes No No

Design No No Yes Yes

Distribution Yes No Yes Yes

Finance Yes Yes No No

Govt. Relations Yes No No No

 TTE not a Springboard
TCL acquired Thomsons plants which was 8 times than it in terms of revenue.

Thomson was struggling with high costs

Thomson profits declined and incurred loss in 2004

TCL CRT TV sets contributed 94% of total TV sets revenue in China

Thomson products could not be sold in China being high value products

However TCL could have exploited Thomsons network and knowledge

Overall the JV is not a springboard

Internationalization options for EMNCs

Developed Markets First Emerging Markets First

Overall Learnings First mover advantage

Quality Growth markets
Saturated Markets Similar conditions
New Capabilities Global brands difficult

Product Portfolio Niche Products Launch full product range

Less retaliation Manage institutional voids
Pigeon holed

Bargaining Power Brands less important Brands very important

Distributor powerful Distributors less powerful
Internationalization options for EMNCs

Developed Markets First Emerging Markets First

Brands Helpful Yes, very expensive Doubtful

Less at start
Investments Expensive to start
Grow very high

Largely local control is

Human Resources Can be from HQs
issue
 TCL not a Dragon Multinational

Accelerated Organisational
Strategic Innovation
Internationalisation Innovation
TCLs TCL took no such There was no
internationalisation initiatives to equip the particular strategy
was Gradual organisation for Foray into the Asian
They started of with internationalisation market was
the developing TCL as an organisation coincidental
countries and then lacked an
gradually moved to international outlook
the planned to go to
the developed market
 Recommendation

TCL founded
in 1982 as an
Focus onaudiotape
Stop further improving Integrate
manufacturing
company
Start further
internationali existing various internationali
zation subsidiaries subsidiaries zing
performance