Review on the business model of development zones in foreign countries

Abstract

This report is designed to help Caofeidian understand business models of development zones in foreign countries. To facilitate this, this report will examine opportunities for Caofeidian to improve, and provide recommendations in the context of critical success factors observed in four case studies. To best assist Caofeidian, a SWOT analysis was conducted to identify avenues for improvement. It was found that Caofeidian’s strengths lie in location, natural resources, cost and the planned eco-city, while its weaknesses lie in the legal and regulatory areas, infrastructure, and marketing and positioning. Next, a detailed analysis of four selected foreign development zones was undertaken. The four zones were: Docklands (United Kingdom), Sri City (India), Jurong (Singapore), and Ruhr (Germany). Each zone (and Caofeidian) was analyzed across three dimensions (geography, infrastructure, strategy), while the host countries (plus China) were examined against a PEST analysis (political, economic, social, technological). Finally, in each zone, the critical success factors were identified. For Docklands, the success factors were the powers granted by government, the market orientated strategy, infrastructure construction, and geography. For Sri City, the clear strategy and positioning, environmental responsibility, population base, and special economic zone status contributed to success. For Jurong, the success factors were planning, positioning, infrastructure construction and pro-active attraction of foreign investment. Lastly, for Ruhr, diversified portfolio, strong internal connections, inter-firm linkages, and the seeking of alternative industry drove success. The success factors identified were converted into recommendations for Caofeidian: first, Caofeidian should position itself to attract both domestic AND international investment – with suitable strategy, planning and marketing for both; second, Caofeidian should accelerate infrastructure construction to improve the investment environment; third, Caofeidian should be aware of the limitations of non-renewable resources, and must investigate alternative industries as well, and finally; Caofeidian should introduce a clear marketing strategy about the type of corporations it wants to attract, and market appropriately.