Case Study: Operation Strategy at

BYD of China, Electrifying the

World’s Automotive Market
HELLO!

2
Background 
BYD Journey
HISTORY OF BYD
BYD stands from Build Your Dream is a Chinese manufacturer
of automobiles, battery-powered bicycles, buses, forklifts, solar
panels, rechargeable batteries.
BYD shareholders
Berkshire Hathaway 24.6%
Himalaya Capital Management 8.2%
The Vanguard Group 2.1 %
BlackRock 2%
Dimensional Fund Advisors 0.64 %
Xiang Yang Lü 21.6 %
Wang Chuanfu 15.7 %
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 BYD JOURNEY
The cars became hot
selling item when price of BYD is the largest EV
Purchased state- gasoline soared. BYD manufacturer
BYD started owned automobile automobile revenue BYD launched  new  Worldwide
making batteries manufacture reached 1.3 Bio sedan, the Qin  Corporate sales totaled  USD
12 billion

1995 2000 2003 2005 2008 2009 2013 2014 2015 2016

Biggest producer of cell Had consistent Many companies begun to BYD got position Produce around 6000
phone batteries, listed on profitability think electric car will have 7 of global sales electric buses
the  a promising future, BYD in worldwide
Hong Kong Stock Exchan has 130,000 employee and
ge 11 factories. BYD was
named the 2nd most
innovative company in
China

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Discussion
Questions

6
 n 1
t i o  "Do you think electric cars may become a viable alternative

es
to gasoline-powered vehicles? What is the future of electric

Qu car? Explain your answer."

 Reason EV  might become viable alternative

car
• Maintenance cost of EV less than conventional cars
(according to the article, EV cost charged 2 cent per mile,
while conventional 12 cent per mile)
• Eco Friendly (EV has zero carbon so that could reduce the
air pollution)
• Gasoline are non-renewable energy and need energy
substitute
• Flexibility to fill up the energy ( we can charge at home/
public station)
• According to the article, the market of EV increase
consistently since BYD launched EV in 2005 (exhibit 1) 

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 n 1
t i o
ues
Q Future Electric Cars
Business Side Innovation of technology :
• Applied for public/ • Autopilot mode
mass transportation • Support with advance AI
• Open new business & ML
opportunities in • Fast Charging mode
manufacturer,
infrastructure, and any
support component of EV

*With all those conditions, EV business has high potential to growth.

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 n 2
e s ti o "What are the internal strength and weaknesses of BYD along with the
Qu external, opportunities and threats ( SWOT analysis)? "

STRENGTHS WEAKNESSES
• Expertise in Battery technology that
• Shorter driving range
become core item of EV (good quality &
cheaper cost).
• Longer (hours) for recharging
• Low production cost
• Own 11 factories and located in several
• Unestablished sufficient gas station 
countries
• Have Rep. Office in US
• Financial support from Berkshire
Hathaway
• Cost-conscious and frugal

OPPORTUNITIES THREATS
• BYD base in China where China has huge
population (potential market)
• Supported shareholders with good reputation • Higher EV selling prices
in the world, become easier to increase • Idea of poor quality of China product
business scale. • Low growth infrastructure to support
• International exposure because of Warren EV (recharge station).
Buffett interest and Forbes journalist review
• Potential of higher electricity cost due
(Muller p.76)
• Long term goals of Paris higher electrical demand
agreement on climate change • Electric safety car 9
 n 3 "Given business strategy of being the world leader in manufacturing electric

st io cars with innovative technology, what operations and supply chain strategy

do you think BYD should pursue? Identify what operations and supply chain

ue should do to help BYD compete including a mission, objectives, distinctive

Q competence and key decisions"

Mission Objective Competence

To fundamentally change the
World leading company in EV Produce more EV
world by reducing our
market automobiles with
dependency on carbon-based
innovative technology and
fuels through the development
safety standard
and advancement of battery
and electric vehicle technology

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 n 3
s t io
Q ue Strategy Recommendation

Production Strategy Supply Chain Strategy 

• Enhance robotics implementation in
production system for plants with
high labor cost.
• Implement manufacturing and supply
chain strategy (e.g Make to order ,
make to assembly, JIT) to achieve
target of high-volume production  • Leverage sales to APAC considering
• Considering manufacturing plant
strategy position compare
with shipping cost
• Footprint strategy : Closer to
customer (focus in top potential
countries),  closer to resources.
Considering tax strategy in country.
• Collaborate
with higher automaker in red region.
number of population, bigger market
area, number of car ownership (put
the facts)

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 n4
"What recommendations would you make for the business as a

t io whole to overcome its weaknesses and threats and then capitalize

es on its strengths and opportunities? "

Q u
Overcome the WEAKNESS & Capitalize the STRENGTH &
THREAT  OPPORTUNITIES 
• Collaborate with government and private • Collaborate with government and private company
company to do campaign awareness about the to adjust transportation tax and electricity cost
benefits of EV for environment and safety to • Collaboration with partners to enhance business
use  model (logistics company, ride hailing, etc.)
• Emphasize the quality of BYD's EV quality • Apply latest technology for enhancing
• Improving battery performance (longer range & vehicle product  (AI, IoT, etc.)
faster recharging process). • Various products related mobility & battery
• Increase number of electric station (drone, electric aero plane, etc.).
• Built in fail-safe circuitry that shuts down the • Leverage to the international market  
battery when its voltage increases beyond safe • Fulfill the market gaps in some countries that
limits ( refer to Tesla and Nissan). banned Petrol or diesel vehicles (exhibit 2)
• Collaborate with potential partners related
R&D of EV technology (battery, AI, IoT, etc.) to
speed up overcoming EV weakness.

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 d ix
en
p
Ap ⦿ Top 12 Reasons Why Electric Cars are Better Than Gas Cars                                   
        https://www.fleetcarma.com/why-electric-cars-are-better-than-gas-top/
⦿ The five major challenges facing electric vehicle
        <https://www.bbc.com/news/uk-49578790> 
⦿ https://www.connect4climate.org/infographics/paris-agreement-turning-point-climate-solution
⦿ Exhibit 1

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Thank You!

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