Question1 Rania Question2 Cost of robotic arm=RMG 800,000 (depreciated over 5 years) Workers salary in one month= 1000+500=1500per

month Workers salary in 5 years= 1500*12*5=90,000 per 5 years 800,000/90,000=8.88 workers. A robotic arm needs to be replaced by 8.88 workers. Notes: Robots are highly reliable. In BYD, defects during assembly for similar processes are lower than 1% of those that are using robots. Using of manpower instead of robotic arms concurs with the low cost strategy of BYD.

Question 3 NO, because other nascent Chinese battery companies use only low cost strategy and they have no R&D department, the market is fragmented between them and there is no dominant company. Using both low cost and high quality (because of R&D department, vertical integration and using of manpower instead of robotic arms) allows BYD to be reliable and to dominate the market in China.

Question 4 Yes, because Wang has both a short term and a long term strategies; the short term strategy is market penetration by developing new models with designs that could be produced far more efficiently. This includes: a. Expanding Qinchuan production by building a new facility to produce 100,000 vehicles per year.

b. Adding production lines for two additional vehicle models. c. Reducing the cost of the existing Flyer model by about 30%. d. Adding R&D to Qinchuan and about 2,000 additional product and process engineers in order to be competitive. Long term strategy: Providing electric vehicle powered by Li-ion batteries which is a key advantage because BYD has a heavy investment and process development in batteries over other automotive firms which dont have.

Other reasons: Regarding BYDs previous experience in rechargeable battery manufacturing, it competes on both cost and quality. Cost: it is based on work force instead of robotic arms; this saves millions of dollars while giving less than 1% errors less than Japanese factories that are using robots. Quality: it is based on vertical integration, BYD makes 95% of tooling and molds internally, which gives it control over more processes and ensures high quality. As well, the R&D department gives them the state of the art in rechargeable batteries with high quality. Furthermore, Qinchuan needs a partner or a buyer with the capital necessary to inject into the plant so it can be expanded as well a technology that they can take advantage of. Also, Xian province leaders believe that BYD has the capital from the stock offering and a process deign to build high quality products, they will support BYD with a onesquare-kilometer land with a price less than the market price with 50 times to build a factory. Question 5 Cost: it is based on work force instead of robotic arms; this saves millions of dollars while giving less than 1% errors less than Japanese factories that are using robots. Quality: it is based on vertical integration, BYD makes 95% of tooling and molds internally, which gives it control over more processes and ensures high quality. As well, the R&D department gives them the state of the art in rechargeable batteries with high quality.