Q1: Chung has many of the entrepreneurial characteristics. He pursues after opportunities around him regardless of how much resources he owns. Thus, he quitted his routine accountant job and started to establish his own businesses. He sold cosmetics, sold silk stockings, published Putonghua textbooks, opened a cigar shop etc. He also started an online education venture which caused him to lose HK$12 million. However, it did not stop him from continuing to grasp valuable opportunities. So he set up Jadelink. Never giving up, failing quickly and frequently are also important characteristics for entrepreneurs to learn and succeed. Chung learnt his lessons and pursued after opportunities even though he failed several times.

Chung learnt that team spirit, company infrastructure, work coordination, trust are important for business startups while a clear business direction, product familiarization and mastering financial foundation are drivers of a company. Finally, hard work, multitasking, flexibility, pressure resistance and independence are important factors for an entrepreneur. He also learnt that knowing customers’ desires and investment trends are the keys to success as they indicate opportunities. It would be dangerous to innovate something just from imagination and go against people’s instinctual desires. That is why he lost money when he invested in an online education venture. He should have invested in a video game as planned.

Q2: The value proposition of Jadelink is to provide global customers with luxurious jade jewelries of simple and modern designs. Jadelink delivers these values to cater the needs and tastes of people nowadays, who buy jewelries as gifts or for special occasions.

Chung is successful in starting up Jadelink. Firstly, he acts really fast. It took him only 25 months to set up the head office, manufacturing factory and retail stores. Secondly, he recruited people with professional knowledge and expertise in the jade industry to help him. His wife, Susan Tsang, is a graduate gemologist and his brother’s father-in-law, Wong, is an expert in sourcing jadeite and stone cutting. These professionals provided very important guidance for him to enter the jade jewelries market. Thirdly, he did sufficient market research so as to integrate customers’ comments into new design concepts before developing new products. Finally, he chose the right place (Shanghai) to start its retail shops since it has the highest budget for buying jewelry in China according to a 2007 survey. He ensures a great demand for his jade goods.

Q3: Establishing Jadelink required an initial investment of HK$30 million. He set up Jadelink with Susan Tsang, Wong and a few silent shareholders. The in-house design team is located in Hong Kong, the early manufacturing stages are integrated in the Foshan plant and the final phases of production are outsourced to several crafting workshops in Hong Kong. Chung even sold his public accounting firm to work full time for Jadelink.

Q4: The first problem is that Jadelink was at the point of making a tough decision. Chung needs to figure out on how to grow the company while facing the risk of economic cool down due to the recession of the western economy. It would be risky for him to adopt the fast growth approach when the economic environment is unstable. However, if he takes a more conservative pace by using the retained earnings for growth, he may miss the chance to grow with the expanding market of China and potential competitors could also emerge.

Secondly, there are lots of internal management problems. The management system not clear enough as some shareholders are his family members and relatives and they work for Jadelink at the same time. Under the Chinese cultural influence, it would be hard for Chung to manage his wife and relatives with a clear cut western management system. Also, practices were not recorded. It was because artisans with little formal education lacks modern business management knowledge so they do not understand the importance of recording practices. Moreover, there are no clear guidelines and training manuals which may lead to inconsistency. This problem arose since the production of jade jewelries is mainly based on the artisans’ experience. In addition, human resources management is not an easy task. For example, it is difficult to recruit good and professional salespersons in China.

Thirdly, it is difficult to find and secure a retail spot. It is very hard to overcome the old-fashioned image of jade held by Chinese landlords who may not be willing to lease their shops.

Q5: Jadelink realized a lucrative profit and was expected to have a bright future. Chung wished to promote the brand internationally, expanding the company to Taiwan, Singapore and Japan, making it a leading player in the industry. It would require an estimated RMB100 million to push forward the growth of Jadelink.

As the jade industry is capital-intensive, much capital are being backlogged in the jadeite rough. Also, the production process is long so there is a high pressure on capital turnover. Moreover, the payback period for a Jadelink shop is two years and it requires about six months for a counter in a department store. Thus, although the company is profitable, the current amount of cash flow is not satisfying. More stores are required to obtain enough funding to implement Chung’s plan for expansion.

This would however take a long time and Jadelink may miss the chance to grow with the expanding China market. Potential competitors may also emerge at the same time. Therefore, Chung has to obtain external funding from venture capitalists and other forms of private equity.Chung has to be aware of several things before expanding Jadelink. First of all, Chung has to optimize the internal management system. Jadelink should record practices and set up clear guidelines and training manuals. As Jadelink expands, production processes have to be more standardized for easier management. Daily problems or issues are similar and an efficient set of guidelines would shorten the time dealing with these issues.

Secondly, Jadelink should attract more professional staff. The customer preferences and culture vary across different countries. Since Jadelink needs to expand internationally, it should hire experts who have good knowledge in each of the countries. For example, salespersons should know the needs and desires of customers of different regions and designers should be able to design products that cater the needs and desires of the customers in various countries.

Finally for external funding, Chung should choose investors who respect his effort and vision. The investors should also focus on the monetary value of Jadelink. Such investors would feel an attachment to the company and they will have similar goals and objectives as Chung, which is to develop Jadelink into an international brand. If Chung selected the wrong investors, operation and management would be difficult as they may want Jadelink to develop in another way which is not desired by Chung.

All in all, Chung should optimize the internal management system, attract more professional staff and choose the right investors for expanding Jadelink.