Kanzen Berhad Case Study Its Case Study

Excerpt from Case Study :

On the other hand, allowing the imports of welded stainless steel to undercut domestic manufacturers might spell economic crisis within the industry by forcing plant closures.

Possible Solutions

KTSB could elect to sue the filers of the petition on the grounds that their allegations hinder free trade and might inadvertently affect ancillary domestic markets such as construction, household goods manufacturing, and housing. The lawsuit might also call into question the petitioners' marketing research and the "certain assumptions" made ("Kanzen Berhad," 1996, p. 6). Moreover, En Hong Chew noted feeling surprised by the timing of the petition, signifying that it might have been filed prematurely ("Kanzen Berhad," 1996, p. 6). Such litigation is unlikely to yield long-term gains for KTSB, however. Not only would the suit be costly, it is unlikely to do more than postpone the implementation of the antidumping duties on Malaysian welded stainless steel exports.

Assuming that the DOC proves that the imported merchandise is sold at a "less than fair value" and that the exports cause or threaten to cause "material injury," KTSB may have no other choice but to work around the antidumping duties. Focusing on how the firm can combat the blows it might suffer as a result of the duties should be the primary concern of KTSB.

Recommended Solutions

The lack of antidumping duties on Malaysian welded stainless steel exports to the United States enabled firms like KTSB to secure a solid standing in the global market. Had the costly duties been imposed on Malaysia at the same time they were imposed on Taiwan and Korea, KTSB might never had successfully diversified and might never have enjoyed such remarkably fast growth.

However, KTSB has also bolstered its position in the global market by establishing a reputation for quality of product and of service by providing education and support to customers, by ensuring punctual deliveries, and by manufacturing a consistently high-quality product. KTSB can therefore continue to promote its strengths and could potentially maintain its dominance in the American market. Because their manufacturing costs will remain lower than the costs of manufacture of welded stainless steel by American firms, it is possible that KTSB's standing will not suffer inordinately by the imposition of the antidumping duties. A sound and aggressive marketing campaign, which KTSB has already begun to embark on as a part of its overall plan, will assist the firm in achieving its goals.

Furthermore, KTSB can improve its standing in third countries. The European Union remains a relatively untapped potential market for KTSB. Focusing on the EU and on other markets including Australia and China may offset some of the loss in sales from the United States market. Malaysia already enjoys Generalized System of Preference (GSP) status within the EU and needs only to invest in equipment upgrades in order to fully meet EU specifications for welded stainless steel ("Kanzen Berhad," 1996, p. 4). Although the ASEAN nations have suffered economically since the crisis in the late 1990s, the region may face a period of potential growth over the coming decades, which would enable KTSB to also focus more on the regional market.


Both KTSB and the petitioners express valid points and concerns. On the one hand, operating within a global marketplace automatically implies the risks and problems posed by dumping. The American government's trend toward increasingly unrestricted trade would seem to favor the entry of firms like KTSB, at the expense of domestic players. Antidumping duties may appear somewhat hypocritical in light of the political climate in the United States. On the other hand, domestic interests do deserve some protection and dumping poses serious, possibly irreversible conflicts for the domestic economy and labor force. Dumping hampers workers' rights in the United States and adversely affects competition.

KTSB's success depended on two main factors: its reputation for quality product and service; and the lack of antidumping duties leveraged on Malaysian exports of welded stainless steel products. Because KTSB has already established itself in the global marketplace in the United States, Japan, and elsewhere, the imposition of antidumping duties might only pose a minor threat to the future profitability and growth of the firm. If KTSB and its managers like En Hong Chew handle the case with care, KTSB is likely to…

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