Abstract

Case (A) of this two-part case study describes the trials and tribulations of the protagonist Eva Cheng, Chairman of Amway (China), in her attempts to establish and to develop her company's direct sales operations in the burgeoning China market in the 1990s. Along the way, she is stymied by the passage of a State Council ban against direct selling, which affected the whole industry.

Learning Objectives

After discussion and analysis of the case, students will be able to: 1. Discuss the China entry and logistic strategies used by a western company; 2. Evaluate the exercise of effective leadership in a crisis; and 3. Understand the importance of negotiations with the Chinese government and establishment of government to prepare for long-term growth of a foreign company operating in China.