This Case is about GROWTH STRATEGY
PUBLICATION DATE: February 28, 2014 PRODUCT #: 114053-HCB-ENG
Red Star after its establishment in 1986 has developed into the top department store in China for furniture as well as house gear products (toilet, lamps, fabrics complements, etc.).
The business model of the Red Star was to aid sufficient space for vendors (that rented the space) in extravagance shopping mall facilities, well designed and equipped (parking, transportation, services) situated in key developing zones of the Chinese growing cities. In the initial 27 years, 115 shopping malls had opened up in 85 different cities. With capability to establish up to 10 new malls annually, Red Star anticipated to reach 200 malls by 2020.
By 2012, the firm employed over 15,000 individuals. How should the firm handle its ambitious growth strategy with escalating competition, as well as the growing sophistication of its own business?