In June 2003, the governments of Hong Kong and the People’s Republic of China signed the Closer Economic Partnership Arrangement (CEPA). Date CEPA outlined conditions for the liberalization of trade in goods and services and capable companies in Hong Kong to establish wholly-owned enterprises on the mainland. A company that benefited from the liberalization was the Crown Worldwide Group. Founded by Jim Thompson in 1965, based in Hong Kong since 1970, Crown had developed into the world’s biggest p … Read more »

In June 2003, the governments of Hong Kong and the People’s Republic of China signed the Closer Economic Partnership Arrangement (CEPA). Date CEPA outlined conditions for the liberalization of trade in goods and services and capable companies in Hong Kong to establish wholly-owned enterprises on the mainland. A company that benefited from the liberalization was the Crown Worldwide Group. Founded by Jim Thompson in 1965, based in Hong Kong since 1970, Crown had developed into the world’s largest privately held company relocation and records management services, and had become a major player in the field of logistics. By 2003, the company has a global network of offices and stocks in more than 100 cities on six continents had. After the signing of CEPA, Crown a plan for the construction of state-of-the-art warehouse / office complexes formulated on the mainland. The first was to be in Shanghai, followed by a second in Beijing, and then in several other cities. Crown was successful in the first phase of the implementation of its strategy: to August 2006, Shanghai had worked staff of the new plant for more than a year. Meanwhile, Crown had a plot of land in Beijing and had completed site preparations – but progress on construction had advised registration approval from authorities in Beijing to a halt due to unexpected delays in project implementation. The delay raised the question: How best to proceed? When he checked his options, Thompson weighed tactical considerations and strategic interests. Economic logic suggested the necessity of the construction project back on track as quickly as possible. However, he knew that any action in accordance with the basic values ​​he had cultivated the Crown, had earned the reputation of his company as a world class provider of logistics services, and Crown plans for further expansion in China.
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Michael J. Fratantuono
Source: University of Hong Kong
31 pages.
Release Date: 03 July, 2007. Prod #: HKU653-PDF-ENG
Crown Worldwide Group: Moving to China under the Closer Economic Partnership Arrangement HBR case solution

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