Case Study 3: Auntie Anne’s Pretzels in China
entrepreneur whose business fails as a result of political gamesmanship. Lin has concluded that he and his business partner were always at a disadvantage when it came to doing busi-ness in China. “You really need to have that prior experi-ence and those prior relationships,” he says. “When we showed up, we didn’t really have any prior relationships.” This, among other shortcomings, led ultimately to the closing of the partners’ Auntie Anne’s Pretzel stores in 2012, and they have each moved on to greener pastures of opportunity. But their experiences abroad illustrate the stark differences that can exist between doing business in the United States and operating in other countries.
These naturally ramp up the potential complications for small business owners who willingly accept the adventure of global expansion, with its inherent hazards and potential rewards.
Questions
1. What were the primary motivations that led Lin and his partner to start a new business in China?
Given their experiences there, do you think they should have considered launching in another country instead? Where? Why?
2. Of the global strategies mentioned in Chapter 18, which option did Lin and Sze choose for their move into China? Did they choose the right strategy for them and their enterprise?
3. What do you think Lin and his partner did right when they attempted to start their business? What do you think they did wrong? What recommendations would you have for them?
4. Given the details of this case and other key facts that you know about China, assess the opportunities for U.S. small companies that may want to do business there.
What features of the country should be par-ticularly attractive to entrepreneurs who are seeking to expand internationally by going into China?
5. What challenges to doing business in China did Lin and Sze experience?
List any issues that may present distinct problems for other U.S. small companies that may want to do business there.
