【正文】 ldorf – Frankfurt – Hamburg – Kiev – Lisbon London – Madrid – Milan – Moscow – Munich – New York – Paris – Prague – Riga – Rome – S227。s work operations – Project sales performance has been affected mainly by both poor customer services and inpatibility with current Chinese installation and application habits – There are a number of setbacks that need to be overe to improve OEM sales: unsatisfactory product development and customization, slow market responsiveness and high pricing ? Except for a very few marketing related activities such as seminars and attending exhibitions, essentially marketing department doesn’t perform marketing functions such as building up brand etc. ? Kohler has done far better pared to Geberit in the area of sales and marketing, such as raise brand awareness, influence customers and design institute Financials, anization and processes ? The GM of GSHA lacks leadership. His management style is selfcentered. It is widely perceived that he does not trust the local staff. His personality is not accepted by employees. As a result, there is no motivating corporate culture, no trust between management team and staff, no motivation and mitment among the staff and high staff turnover. ( . CCS ) ? The official anizational structure, which is changed frequently, is not implemented. Department’s function is not clearly defined. Some functions ( . HR ) are overlapping and some are not implemented. ( . Marketing) ? The current operation process is production oriented instead of marketoriented, leading to ignorance of market demands. The control of the whole process is only on paper and is not followed in reality. ? Although there is no open conflicts between them, the JV partners pursue their own (personal) interests. It is particularly obvious when recruitment, promotion and layoff are concerned. ? GSHA is on the brim of bankruptcy. More than 70% of products sold have negative gross profit margin, resulting in an increase of operating losses in line with increase of sales. The pany cannot survive without a continuous cash injection from the parent pany. Although the operating losses of GDAI have been reduced as a result of improved gross profit margins and increased sales, the financial situation is still critical There is no leadership at GSHA. GSHA is close to bankruptcy. GDAI shows positive development trend Geberit should aim for equity buyout and consider termination or bankruptcy as fallback position Restructuring options ? To separate from the Chinese partner is a premise to secure success of restructuring – Some key problems particularly affecting to HRM are related to the Chinese partner – In addition, Lida’s products are contributing to the huge loss due to their 7% gross profit margin and the sharp decline in sales volume due to shrinkage of low end market ? Therefore, only equity buyout, termination and bankruptcy are feasible ? Considering cost, time, risk and the potential impact on future integration and consolidation, equity buyout should be deemed as the first choice, and termination or bankruptcy as fallback position ? The buyout and termination options depend to a large extend on the willingness of the Chinese partner and can take a long time. Therefore, Geberit should start preparations and negotiations quickly A. Market environment A1. Macro business environment in China Overall the business environment is positive for Geberit’s investment in China Macro business environment in China ? 8% annual growth forecasted for construction industry ? Strong momentum for real estate market growth ? Steady growth for high end real estate market ? 7% annual GDP growth estimated in the next five years ? Another boom for FDI1) expected ? An estimated 8% annual growth for fixed asset investment by 2023 ? Consistent economic policies towards reform and opening up ? Dramatic Chinese household ine growth during the past 15 years Macro economic trend Housing supply market Government policies Social factors ? Government’s preparation for WTO entry ? Central government’s effort to develop western region ? The emergence of top consumers group with strong purchasing power ? Significantly increased bathroom decoration standard and spending 1): Foreign direct investment China is one of the fastest developing countries in Asia and the globe 4 . 1 %2 . 0 %5 . 6 %5 . 5 %3 . 2 %6 . 2 %5 . 3 %0 . 6 %7 . 5 % 0 . 7 %Annual GDP growth in China [%] GDP growth in Asia, 1998/1999 China 1) Estimate Japan Malaysia Indonesia India Philippines Taiwan Singapore Hong Kong Thailand Germany % USA % Source: OECD, Roland Berger Partners analysis 1 4 . 21 3 . 51 2 . 61 0 . 59 . 68 . 87 . 87 . 57 . 91992 1993 1994 1995 1996 1997 1998 1999 20231) The key indicators of the first half of 2023 show a strong confidence in the Chinese macro economic trend ? Fixed asset investment hit RMB 754 billion in the first half of 2023, up % pared with the period of last year, among these, the investment of real estate was RMB 201 billion, up % ? Sales volume of the retail market reached RMB 1625 billion, up %, and the disposable ine per urban resident increased by % ? Foreign trade volume achieved a significant growth of 37%, amounted at USD 217 billion, among these, export was USD 115 billion, up 38%, import was USD 102 billion, up 36% Key indicators in the first half of 2023 % GDP growth achieved in the first half of 2023 Source: County Information Center f i r s t h a l f o f 1 9 9 9 f i r s t h a l f o f 2 0 0 03650 3950 +% [Billion RMB] In the next 5 years, macro economic development will be optimistic in China ? WTO accession will bring % more foreign investment, USD 100 billion incremental FDI per year, will boost