In 2014, the general manager of the established and successful Hong Kong-based company Hung Fook Tong, which produced and sold herbal teas, wondered how his company could profitably expand to mainland China. After Hung Fook Tong’s recent initial public offering on the Hong Kong Stock Exchange, its shareholders’ equity had tripled. The initial public offering committed Hung Fook Tong to expanding its business in mainland China; however, that market posed many challenges, in part because it represented a far larger market. The general manager knew it was critical to determine a suitable and successful expansion strategy.
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