By William Barnett, Peter Lorentzen
2005 | Case No. SM92 | Length 15 pgs.
UFSoft was one of the first completely non-governmental domestic firms to succeed in China. Established in 1988 in Beijing, the firm began by making Chinese-language bookkeeping software and gradually moved toward much more complex enterprise resource management software. Set in 2001, just after UFSoft’s successful initial public offering, the case traces UFSoft’s growth and expansion in the face of competition first from Chinese firms and later from international firms such as Oracle and SAP. In addition to external strategic challenges, the firm faced many internal management challenges. Quality control became difficult to maintain as the products became more complex and development teams became larger. Distribution channels established for off-the-shelf bookkeeping software had to be adapted for higher-end products and services. This case explores both the general challenges faced by a growing firm and the unique difficulties of building a high-technology business in a poorer, less developed economy.

Learning Objective

This case can be used to explore a number of challenges faced by high-technology enterprises in China and in developing countries more generally. The problems UFSoft faced included poor intellectual property protection, shortage of skilled human resources, better-funded foreign competitors, nonexistent distribution channels, underdeveloped capital markets, and weak rule of law. The case also explores the classic entrepreneur’s challenge of moving beyond one initially successful product to build a sustainable business.
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