Case Studies

The client of this project is a global leader in high-tech equipment for communication applications. Headquartered in Switzerland, the company is the market leader in most European markets, as well as in North America and Australia. In Asia, particularly in China, the company has established a considerable market share over the past twenty years. Customers are large organizations, often under direct or indirect state control, which means the client usually participates in public tenders. In recent years, the management received hints that their China business was being critically observed in North America and other Western countries cooperating closely with the US. On the other hand, in China they are confronted with increasing demands to localize their value creation in China, targeting local R&D and manufacturing. The client turned to L&M PRISK for support in aligning US and Chinese requirements and adapting its strategic approach accordingly.

In a first step, L&M PRISK investigated the strategic position of the client in the different markets, drawing on OSINT and HUMINT approaches. Against the backdrop of increasing tensions between the US-led group of countries on the one hand, and China on the other hand, it became clear that the client was in a strategic dilemma. Our in-depth investigation of policy developments in the respective countries under US lead revealed that ever stricter rules will be introduced for companies who want to sell their products to the US and its allies in the high-tech industry. This will have direct and far-reaching consequences for our client. The reason is that future formal and informal rules will exclude firms from tenders in the US and other Western countries if the firm’s China activities could jeopardize US security. At the same time, our client is confronted with Chinese demands for activities which would result in technology transfer. However, supplying both spheres of influence with the same technology turned out not to be a sustainable solution for the client.

In a joint workshop with the client, we agreed that a new business geostrategy needed to be designed which considers the upcoming rivalry between the US and its allies on the one hand, and China on the other hand. The new geostrategy we designed solves the strategic trap of the client and allows the global company to adapt to the new geopolitical realities in a business-friendly way.