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Ace Micromatic Group: Competing in the D...

S. Ramakrishna Vel...

Case

Ace Micromatic Group: Competing in the Dragon’s Den

S. Ramakrishna Velamuri; G Venkat Raman; Saripalli Bhavani Shankar; A.J.Swapna

ISB301 | Published March 31, 2022 | 11 pages Case

Collection: Indian School of Business

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Learning Objectives

Ace Micromatic Group (AMG) was established in 1979 and is a well-known machine tools (MT) manufacturer in India. Under the leadership of Shrinivas Shirgurkar, Managing Director, the firm has been ambitiously seeking new opportunities. It is a "niche entrepreneur" company that focuses on MT and computerized numerical control (CNC) machines. MMT China was founded in 2007 as AMG’s wholly owned foreign enterprise (WOFE). The overwhelming support of the local government impressed AMG. The structure of the MT market has shifted from pyramidal to diamond shaped. MMT China has successfully focused on small- and medium-sized businesses (SMEs). Its focus has been aesthetics, automation, customer experience, and dealer relationships. Despite this, it has encountered several challenges. One set of challenges was financing the purchase of its goods. Another concern was the gulf between its organizational ideals and Chinese business practices and culture norms, such as giving gifts and favors (guanxi, personal networks not related to business). MMT China has been able to overcome these challenges by providing high-quality products at competitive prices, supported by efficient after-sales service. It has overcome overwhelming odds and reaped the rewards of investing in China. The founders are hopeful and optimistic about initiatives such as “China Plus One” and “Make in China2025.” Careful planning will be necessary to make the most of these changes.

1. Understand the opportunities and challenges facing MMT China. 2. Analyze MMT’s expansion strategies aimed at establishing a strong presence in the Chinese market. 3. Understand MMT’s strategies for tackling the expansion-related challenges. 4. Analyze how MMT China can improve its relationships with customers and distributors.