Strategic Internationalization of BYD: A Case Study on Entry into the German EV Market Using the Eclectic Paradigm Framework

Huize Zhang

doi:10.54097/nmap2t62

Authors

Huize Zhang

DOI:

https://doi.org/10.54097/nmap2t62

Keywords:

BYD, Internationalization, Electric Vehicle Market, Eclectic Paradigm, OLI Framework, Germany, Renewable Energy, Lithium Iron Phosphate Battery, Market Entry Strategy, Political Risk Management

Abstract

This report provides a comprehensive analysis of BYD's internationalization strategy, focusing on its entry into the German electric vehicle (EV) market. BYD, a leading Chinese multinational in renewable energy and electric vehicles, is strategically positioned to leverage its technological expertise, particularly in lithium iron phosphate battery technology, to expand globally. Utilizing the Eclectic Paradigm (OLI) framework, the report examines Germany’s suitability as a target market based on factors like market size, infrastructure, regulatory environment, and government incentives. It highlights the company's ownership advantages, including advanced battery technology and competitive positioning within the EV sector. The analysis concludes that a wholly-owned subsidiary model offers the most effective entry mode, ensuring BYD's competitive edge through control over intellectual property and rapid market responsiveness. Recommendations for risk mitigation in light of Germany's regulatory and geopolitical landscape are also provided, aligning with BYD's objectives for sustained international growth.

Downloads

Download data is not yet available.

References

[1] Alanazi, F. (2023). Electric Vehicles: Benefits, Challenges, and Potential Solutions for Widespread Adaptation. Applied Sciences, [online] 13(10), p.6016. https://doi.org/10.3390/app13106016. DOI: https://doi.org/10.3390/app13106016

[2] Ali, T., Butt, A., Arslan, A., Tarba, S.Y., Sniazhko, S.A. and Kontkanen, M. (2021). International projects and political risk management by multinational enterprises: insights from multiple emerging markets. International Marketing Review, [online] 38(6), pp.1113–1142. https://doi.org/10.1108/imr-03-2020-0060. DOI: https://doi.org/10.1108/IMR-03-2020-0060

[3] Bradsher, K. (2024). How China Built BYD, Its Tesla Killer. The New York Times. [Online] 12 Feb. Available at: https://www.nytimes.com/2024/02/12/business/byd-china-electric-vehicle.html [Accessed 10 May 2024].

[4] Broadbent, G.H., Drozdzewski, D. and Metternicht, G. (2017). Electric vehicle adoption: An analysis of best practice and pitfalls for policy making from experiences of Europe and the US. Geography Compass, [online] 12(2), p.e12358. https://doi.org/10.1111/gec3.12358. DOI: https://doi.org/10.1111/gec3.12358

[5] Carlier, M. (2023). Europe: number of electric vehicle charging stations 2022. [Online] Statista. Available at: https://www.statista.com/statistics/955443/number-of-electric-vehicle-charging-stations-in-europe/#:~:text=Charging%20stations%20across%20Europe [Accessed 10 May 2024].

[6] Chen, S.L., Li, W. and Liu, Y. (2024). Analysis on the Development, Sales and Development of New Energy Vehicles by BYD Company. Highlights in Business Economics and Management, 24, pp.1660–1666. https://doi.org/10.54097/3q44mj12. DOI: https://doi.org/10.54097/3q44mj12

[7] Duniach-Smith, K. (2004). Franchising and the Choice of International Entry Mode. Contributions to Management Science, [online] pp.243–263. https://doi.org/10.1007/978-3-7908-2662-3_14. DOI: https://doi.org/10.1007/978-3-7908-2662-3_14

[8] GlobalData (2024). BYD Co Ltd: Overview. [Online] www.globaldata.com. Available at: https://www.globaldata.com/company-profile/byd-co-ltd/ [Accessed 10 May 2024].

[9] Holtgrave, M. and Onay, M. (2017). Success through Trust, Control, and Learning? Contrasting the Drivers of SME Performance between Different Modes of Foreign Market Entry. Administrative Sciences, 7(2), p.9.https://doi.org/10.3390/admsci7020009. DOI: https://doi.org/10.3390/admsci7020009

[10] Huang, L. (2023). Analysis on BYD Current Development and Future Direction. Advances in Economics, Management and Political Sciences, [online] 26(1), pp.152–158. https://doi.org/10.54254/2754-1169/26/20230564. DOI: https://doi.org/10.54254/2754-1169/26/20230564