Euro Telecom China - The Parallel Import Problem

The chief executive officer of Euro Telecom China must decide what to do about the unauthorized parallel imports from Malaysia of finished Euro Telecom China's mobile phones by independent mobile phone distributors and retailers. These imported mobile phones appeared to have taken nearly 20 per cent of the company's mobile phone market in China. The case explores quantitatively the complexities of management control in international joint ventures, here between Euro Telecom and groups in Beijing, Shanghai and Guangdong. It provides an opportunity to calculate the relative profitability of manufacturing in two locations and the intra-organizational inter-divisional conflict created.