Question

OVERVIEW

Pearl River is the world’s largest piano maker. It is also the fastest-growing piano maker in North America, with the largest dealer network in Canada and the United States. The company has in fact surpassed Yamaha and Steinway, both of which are reputed piano-making companies. But it is not very well-known despite its claim that it is “the world’s bestselling piano.”  In a bold move to overcome buyer’s reservations about purchasing high-end Chinese products, PRPG acquired Ritmüller of Germany, one of the first piano makers in Germany and one of the most prominent in the world. The German company, despite its great history, had been struggling and couldn't survive the disruptive, mass-production technologies unleashed by companies like Yamaha and Pearl Water. The alliance between PRPG and Ritmüller has benefited both the companies. PRPG now sells pianos crafted with German precision and is now able to enter the high-end market despite the Chinese tag. The German company, which was on the verge of bankruptcy, has been rejuvenated..

1. Drawing on the industry-based, resource-based, and institution-based views, explain how Pearl   River, from its humble roots, became China’s and the world’s largest piano producer.

2. Why did Pearl River’s top management believe that the firm must engage in significant internationalization (beyond the direct export strategy)?

Answer 1

Solution 1

Pearl River became Chinas and Worlds leading piano maker because of its strategic acquisition of German company Ritmukker which gave highest premium precision and banked upin its strong brand image and distribution to market product at high quality low cost fornula.

Solution 2

The senior management must have indulged into internationalisation as this would give foreign direct investment and also bring expertise of products and cope eith local competition from Bigger brands in market . Thus products will be higher due to eceonomies of scale. This will help brand inagey to chabge heavily.