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Chrysanthemum and Dragon: JAFCO Asia in China Case Solution

Solution Id Length Case Author Case Publisher
609 594 Words (3 Pages) Rawi Abdelal, David Lane Harvard Business School : 706012
This solution includes: A Word File A Word File

The case revolves around JAFCO Asia’s investments and financial support in China while primarily being a Japanese firm. JAFCO, along with other venture capitalists has gone through major ups and downs in its relationship with Chinese companies and the Chinese government. This relationship has faced ups and downs as the Chinese government, primarily Communist in nature, has been exposed to capitalistic business ventures and enterprises. A point of concern for JAFCO Asia has been the status of its current and future investments in the People’s Republic of China.

Following questions are answered in this case study solution:

  1. General Overview of the Case

  2. Supporting Facts

  3. SWOT Analysis

  4. Alternative Solutions

  5. Stated Conclusion of the Case

  6. Recommendation

Chrysanthemum and Dragon JAFCO Asia in China Case Analysis

2. Supporting Facts

A case in support for JAFCO Asia’s investments in China has been the liberalization of trade and foreign investment in China. China has primarily been a closed and nationalist economy with total focus on local companies. In the early 2000s, however, the economy has opened up to international companies. This step has been of a major benefit to venture capitalists such as JAFCO Asia, who have capitalized on the opportunity and funded many projects in Eastern China.

3. SWOT Analysis

The SWOT Analysis below is presented while keeping in mind the interests of JAFCO Asia as a venture capitalist in China. Researchers have identified SWOT as an effective technique for analysis (Low & Gao, 2014).

Strengths

  • A proven track record of supporting business enterprises in China

Weaknesses

  • Failure to adapt to local customs and tastes

  • Unsuccessful contracts and deals in the past

Opportunities

  • Growing Chinese economy and strong financial institutions

Threats

  • Deteriorating relationship on the national front between China and Japan.

  • Riots and protests against Japanese interests and employees in China.

4. Alternative Solutions

Currently, two options are available to JAFCO Asia in the scenario. Based on the background discussion in the case and ground realities, the company is faced the following options as alternative solutions:

  • Devote a major chunk of JATF III to China and have total focus in China as a country (Chen & Reger, 2006)

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