Lucy Stephenson

Most businesses start off small, and in time they grow into large enterprises and companies. BYD – Build your dreams is a Chinese rechargeable battery manufacturer which did exactly that. It started off as a miniature company in 1995 with 25 employees. It grew exceptionally, and the founder Wang Chuanfu is now the richest man in China with a net worth of 5.9 billion USD.

The company started selling batteries to different consumer markets, and it’s biggest being the car industry. It started selling rechargeable batteries to use for cars, but I believe the biggest mistake they made was selling to consumers directly, rather than the car manufacturers, as these are completely different positions and target audiences. This caused for a lack in optimising their dealer network. The criteria that is most important in this case is the potential income gained from expanding consumers as BYD did.

By having a dealer network that is too large, BYD is expanding too rapidly, where it’s output isn’t able to cope with its demand. At the same time, production is becoming more expensive to the essentially over-night desire for the products. Therefor at the same time BYD batteries are loosing in quality, and therefor also efficiency for consumers. Due to the quick expansion, the companies retail channels are opening up at a rapidly increasing pace, causing them to essentially suffer and falter.

I believe that once a firm is expanding, it should not loose sight of what it’s initial promises and reputation was to consumers. BYD – Build your dream promised qualitative and efficient rechargeable batteries, and would benefit from having large, targeted retailers who then distribute themselves, rather than BYD trying to distribute to everyone.

“NEWS.” BYD: Electric Vehicles, Photovoltaic, LED Lighting, Energy Storage. N.p., n.d. Web. 06 Nov. 2014. <http://www.byd.com/na/>.

“How to Manage a Fast-growing Firm.” BBC News. N.p., n.d. Web. 06 Nov. 2014. <http://www.bbc.com/news/business-29697973>.