The Chinese State Environmental Protection Agency

Case Study Report Introduction This case try out report leave bed explore the conjunction Phase Separation Solutions (PS2) and identify the key enigmas and alternatives. An digest and application of role fashion models go out then be conducted. Specifically, the 5 models chosen consist of a PESTEL analysis, Porters Five Forces, a SWOT analysis, the VRIN model and the organisational configuration model. An evaluation of alternatives involving divine swear outs and disadvantages for the alternatives be then checkd. Finally, a conclusion and recommendations be awarded for PS2.Identification of Key Problems and Alternatives Within the case study in that respect argon a set of key lines and alternatives largessed. The outset problem deals with whether PS2 should enclose the Chinese grocery store. To investigate this further, economic problems, regulatory problems, and the problem of voltage squargon offed securities industryplace places in Canada and sum Ameri ca may compel PS2 to command. Declining economic grocerys and volatile patch up lean in Canada and North America display expressage sustainable forthcoming revenues and weakening PCB-contaminated s anoint al hole.Regulatory bulges prohibit PS2 from transporting s rock inuncts from the US to Canada in addition to PCBs hitherto providing PS2 with short term momentum as PCB discussion is a declining commercialize in Canada. Currently, in the Canadian commercialise at that place is a dominance limit in regards to the measuring rod of PCB-contaminated priming and unfavourable represent advantages which may require PS2 to vista abroad in install to increase their argumentation activities. These circumstanceors raise issues of constraints in PS2s comp rebeling commercializes (Canada and North America) which ordain ca intake mind whether PS2 should internationalisticise into mainland chinaware.The second problem deals with which of the devil opportunities shou ld PS2 come. PS2 needs to weigh up the two selections. Option unitary is a joint venture (JV) with Nanjing show of surroundal Sciences (NIES) in the remediation POP-contaminated soil while selection two is a JV with Zhoushan Nahai Solid Waste Central presidential term (Nahai) in oil retrieval from oil dung. Either n whizz, picking one, option two, or two need to taxed and then selected. Would it be feasible to take twain(prenominal)? Assessments of interior capabilities would need to be undertaken, focusing on financials and costs to look on the possibility of pursuing both options.In recite to undertake both options, PS2 has to assess the cost and benefits. The third problem deals with whether PS2 possess the required re point of references and capabilities to pursue an equity-based admission. An internal mind of resources and capabilities will need to be undertaken to disapprovemine current authorityity and any future resources and capabilities needed to exp and. Additionally, determining the affect cooperative opportunities with NIES and Nahai in china would do to impact the metrics of PS2 and the flow-on impact on corporeal resources and the organisational structure.The fourth problem deals with what self-possession take aims PS2 should assume for each option. Investigating both options and determining the percentage of willpower levels for both options (i. e. equal joint control, mountain control or minority control) needs to be undertaken. Therefore keep down negotiations with effectiveness JV partners must suit PS2. Based on ownership levels, the fifth problem would be how PS2 would staff its Chinese operation(s) if they decide to pursue the opportunities in china.Organisational structures, systems, and staffing need to be considered when determining the JV and the collaboration of staff. The 6th problem could be that the Chinese market is lock up in an acclivitous do which brings about issues of lagged development of industry in terms of search capabilities and techniques of treatment facilities even though the electromotive force size of this market appears a decent size for small firms such(prenominal) as PS2. The seventh problem deals with antagonists (i. e. BEV) who restrain been seeking opportunities for geographical diversification which could saturate the market and honk insistence on PS2.Competitor analysis and determination of future potential industry outcomes are needed to determine a long-term plan for PS2 to internationalise into chinaware. Lastly, the modes of international implicatement subscribe previously been on a non-equity basis, in the form of equipment exporting, licensing and service contracts. The eighth problem is that PS2 has no be intimate in international intricacy of an equity-based manner which could present unforeseen issues PS2 has non previously submitd. Therefore determination of company capabilities to set-up operation systems to effectively imp lement an equity-based inlet will require copious assessments.Analysis and Application of Models 1)PESTEL Model (macro analysis) PS2 is no eery to international markets and is presented with the prospect to demean the unfamiliar yet seemingly win whatever Chinese market. An analysis of the Chinese market is necessary to determine the expansion vi office. PESTLE is a model which ro employment provide comprehensive information about the macro-environment of the Chinese market and usher out help answer the problems of whether or not PS2 should memorialize the Chinese market and which option(s) to adopt.Political Factors The Chinese government has fulfiled and reached a consensus on the importance of prioritising environmental protection beyond a basic policy of country agenda from 2009. The Chinese State Environmental Protection Agency spent $162. 5 billion on environmental protection in 2009 and the Chinese government strongly committed to the capital of Sweden Convention o n Persistent Organic Pollutants, which pie-eyedt the government needed to correct much attention and spend to a greater extent(prenominal) money on environmental protection (Peng & Beamish, 2012, p. 9).Furthermore, in 2010, the Chinese government claimed that $3 billion would be invested to oil investigation and oil remediation from 2011 to 2016 (Peng & Beamish, 2012, p. 10). Economic Factors In the preceding(a) 30 years, economic development of China was rapid where the real gross domestic product per capita rose from $220 in 1980 to $2,883 in 2010 and the annual harvest-festival rate was roughly 9% per annum (Peng & Beamish, 2012, p. 8). The huge economic development will provide well-nigh(prenominal) opportunities for companies to enter. The Chinese economic environmental is still at the early stage still it has prominent potential to grow.Social Factors Environmental pollution has become a serious favorable issue facing the Chinese government overdue to its negative consequences on societys health. Around 410,000 race go by means of every year in China because of environmental pollution (Peng & Beamish, 2012, p. 9). Meanwhile, the tote up of protests related to environmental pollution increased with an annual rate of 29% in recent years (Peng & Beamish, 2012, p. 9). Technological Factors Chinas expert capabilities are not as developed as opposite nations and do lags in potential growth.TDU engineering is widely used in Chinas POP market. Compared with TDU, PS2s TPS engineering science has higher mobility. In China, the oil oozing industry is in its infancy so advanced technologies are needed to propel development. Environmental Factors China is critically abnormal by environmental pollution with smog causing negative effects on rifleer attendance and productivity. Environmental pollution has placed a freight on the countrys medical system causing pres convinced(predicate) on the government to solve the problem.Dumping of untreated oil seepage into pits or the fact that they were incinerated is too bad for the environment. Legal Factors The government is on its authority to addressing environmental pollution. On one hand, it takes measures to reduce pollution. On the former(a) hand, regulations throw been cookd in order to treat pollution worthyly such as the regulation to forbid the traditional way to deal with the oil sludge, which can be compulsive for PS2 to compete in the market. Overall, the PESTEL model analyses the macro-environment of China. Generally the environmental industry of China is cute.On one hand, China has seen huge economic growth so that the country has the ability to spend money on environmental protection. On the other(a)(a) hand, the economic development was made at the cost of the environment and race in China pay been negatively affected by the environmental pollution, which means it is necessary to take measures to protect the environment. moreover, the engine room o f the environmental industry in China is not developed. To sum up, the macro-environment of China is positive for companies to enter with advanced echnologies. Both the POP industry and oil sludge industry are at the early stage with great potential, so the external factors are positive for PS2 to pursue both options and enter into the Chinese market. 2)Porters Five Forces Model (micro analysis) The treatment of POP and Industrial scoop micro-industry analysis inwardly China addresses the aspects which directly influence PS2 and its warring demeanor and responses. Porters Five Forces interact and determine an industrys attractiveness and profit potential.One problem PS2 can look into to gain a clear picture of whether they should enter the Chinese market in order to determine its viability and what forces offer potential attractiveness or barriers. Another problem PS2 can review is the competitive nature of the Chinese industry with potential opportunities or obstructions as we ll as varying competitor market saturation levels. Industry analysis will enable an overall assessment of the desirability to enter, severey to enter, and potential of the industry. holy terror of New Entrants upset threat of advanced newcomers as there are high barriers to entry which would be voiceless to overcome in time regulatory changes are transforming industry operations. Both options would mean PS2 would have high start-up costs in conjunction with the JV as they would have high capital requirements for allocation of site locations and treatment facilities as well as high fixed costs with the latest engineering science and transportation. The industry capabilities are specialised and require k right awayledge built by dint of years of immersion in the industry.Legal barriers make entry more difficult to comply with environmental and legal policies which can restrict operations. Threat of Substitutes Low threat of substitutes as there are no direct substitutes to the love almost materials used in operations, such as POP contaminated soil and oil sludge. As both soil and oil are innate resources, the likelihood of substitutes are low however government pressures for preservation of environmental reserves means there are various substitute addresses towards dialogue of soil and oil which would be dependent on engineering science and cost advantages.The ability to switch between substitute processes is moderate however contracts with companies would limit the ability to switch as site locations grant permission to treatment of the resource. Bargaining post of Buyers Low bargaining exponent of buyers as they have peculiar(a) capacity to acquire or produce immanent resources, such as clean soil and oil on their own. There are a multitude of buyers who would purchase large volumes of either soil or oil however they would lack the ability to influence the products as the scientific processes are passing specialised and restricted to governme nt policies.Buyers do however have the ability to switch between similar operational organisations if electric switch costs and contract negotiations enable such business transactions. Bargaining Power of Suppliers Moderate-to-high bargaining power of suppliers as they are reliant on natural reserves that determine the allocation of such resources (soil and oil) to organisations. judicatures and private organisations would need to fountain permission for site allocation as well as implication of resources to potential buyers which can be a rigorous and costly task.The medium of the resource and finite nature makes the bargaining power strong at heart the Chinese market. There are in addition other suppliers, such as the companies that supply PS2 with materials for their technology and devices. These suppliers have a high bargaining power as it is assumed that hardly specialised companies can provide PS2 with the materials and equipment that they need. The Threat of Competit ive Rivalry Low-moderate threat of competitive rivalry as there are a few competitors in the market with various location sites, technological processes and operational capacity.The industry growth is immensely high with regulations and environmental outlooks encouraging preservation of natural resources (soil and oil) encouraging organisations to compete. There would be limited differentiation between resources however production and technological processes would ensure some differentiation enabling PS2 to apply such processes to deliver a competitive advantage in the Chinese market. Overall the POP and Industrial droppings industry is moderately attractive as a studyity of forces draw limited threats. The process systems between buyers nd suppliers are complex however power distri notwithstandingion is f postly un-proportionate. The high barriers could be cin one caserning however once entered into the market, the threat of substitutes and competitive rivalry is limited. Addres sing the problems, PS2 has the ability to enter the market as it is attractive and can compete and differentiate with other competitors with the assistance of a JV. PS2 has TPS technology which has the ability to provide the Chinese industry with a super unique and differentiated competitive alternative especially as the market has the capability for such treatment processes. ) SWOT Analysis The SWOT analysis takes an overall approach to the strengths, weaknesses, opportunities and threats presented to PS2 in the case. Specifically, the SWOT analysis can review the problem of whether or not PS2 should enter the Chinese market, which of the two options they should select, the feasibility of pursuing both options, ownership levels, the problem of competitors wanting to enter the international arena, and the fact that the market was still at an emerging stage. Strengths PS2 is no singular to internationalisation into other markets with technology deployed in 14 countries in the pre historical 15 years. -PS2 possesses internationally proven technology (TPS), the however one to be able to aspirate 90% of oil from industrial sludge (Peng & Beamish, 2012, p. 3). It is value as being world class for motion, reliability, mobility and its lack of harmful air emissions. -TPS technology can easily be deployed at fixed locations and has some(prenominal) advantages ( acceded in above point). -PS2 is well suited to the Nahai JV as they have planetary experience.Both owners have similar personalities and stories. A firm trustingness had already been developed and Nahai had solid assets with a wide range of permits already obtained. -The Government agency (NIES) has a degree of in effect(p)ty to it which reduces the risk of the puke. They had extensive expertness and experience and had identified and inventoried 300+ sites in three provinces. This option also acted as a gratuitous advertising campaign for PS2. -Being an early entrant into the emerging market of r emediation of POP-contaminated soil,PS2 would most likely enjoy first mover advantages. Weaknesses -The oil recovery from oil sludge market was separate and the industry was still in its infancy. -The cost of both JVs are expensive ($3 one thousand million each option). -For option one (POP-contaminated soils), the JV would need to design, engineer, manufacture and market TPS units in China for use in various regions of China. -There is no guarantee that option one will work as the JV would need to design, plan, launch and bid for, fail and participate in projects in China. Some competitors already have the rights to other regions of China which will make it harder for PS2 to gain permissions to other areas in China and cause competitive intensity in the industry. Opportunities -The contaminated soil market has opened up significantly since regulations im experienced by governments required more adequate touch of soil. -China was becoming more environmentally aware qualificatio n protection a anteriority. Previously muff would be dumped, however now it can be treated with new regulations in some provinces. More sludge would be generated from increased oil imports which equates to more business for PS2. -Nahai was a leader in the area, possessed the only waste management processing permit in the area, and had an excellent infrastructure. -If option two goes ahead, it opens the doors up for other opportunities like consulting services and applying the technologies to other separate of China. Threats -The main threat is the issue of the JVs. Issues of control, management and staffing are present and could undermine PS2s abilities. foul soil sites were widely dispersed across the country. The soils would therefore need to be transported however this is not easy due to their bulk. New laws and regulations were pass judgment to cast out the importation of waste containing POPs from province to province. Based on the SWOT analysis, it appears that the streng ths and opportunities outgo the weaknesses and threats. From the model, it looks current that indeed PS2 should enter the Chinese market, and pursue both options as it is feasible to pursue both options.Entering the market would beat any competitor in unveiling the Chinese market and may even deter them, hence eliminating the problem of competition. The problem that the market was at an emerging call down helped PS2 as it was in a growth stage and this seems likely to continue. Regarding ownership levels, there seems to be a good fit between the two groups who PS2 would enter the JV with, so this should not be much of a problem. 4) VRIN Model In order to determine which option to pursue, or whether PS2 should choose to pursue both, the strategical capabilities and resources as a basis of competitive advantage must be explored.The internal capabilities will be examined, alongside the required resources and capabilities to pursue an equity-based entry. Furthermore, company capabi lities to set-up operation systems to effectively implement an equity-based entry will be determined. Value With the Chinese government understanding the current environmental concerns in their economy, a need for the protection of the environment was a priority for the government. Pollution was not only an issue, but posed a social issue to residents of the country.As a result, environmental protection became a basic state policy (Peng & Beamish, 2012, p. 9). Contaminated sites were randomly dispersed across China, and the mobility of PS2s TPS technology provided them with a possible competitive advantage in this market. This ease of use across the various sites in China was not something offered by PS2s competitors. Also, due to application of PS2s technology regardless of the POPs to be treated, the opportunity in China could allow them to compete in a $725 million market (Peng & Beamish, 2012, p. 0). The technology PS2 possesses offers value to the company and an entry into Chin a could extract extra value for PS2 based on favourable policy changes. peculiarity The history of the company, providing a management team with extensive knowledge of the industry, and the geographical experience possessed by these individuals provides PS2 with a supremely talented and knowing workforce. With the president and CEO Paul Antles 25 years of experience behind him, his abilities to pursue projects have contributed to his many awards.He was recognised for his success as an entrepreneur, suggesting similar qualities to that of Nahais owner. This similarity, alongside an ability to direct and manage, provides PS2 with the advantage of appellative with individuals and knowledgeable people to run such a project. Moreover, PS2 offered services on a fee-for-service basis creating a desirability surrounding their product and service Furthermore, their adoption of previous ways to raise capital, such as the enceinte Pool Company program, and their insight into becoming a ex oteric company suggest that PS2 has been a strategic player in their ambition to create funds.All this confirms that the resources and capabilities that PS2 possesses are rare and hard to find in other companies within the industry. Inimitability The TPS technology differed to that of its competitors. It produced safe soil with an 85% accrue in volume that could be retorted to the environment. The TPS process not only enabled the recovery of oil and other hydrocarbons for reuse or resale, but also generated its own fuel source to fire the system. Compared with incineration and land filling, TPS technology produced no harmful air emissions and no land and water pollutants.And finally, compared with incineration, the TPS process produces significantly less greenhouse gas emissions. The environmental benefits presented by this technology dealt with the current environmental concerns facing the Chinese government (Peng & Beamish, 2012, p. 3). This makes the TPS technology hard to im itate by any other competitor as there is no other technology that can match its superiority. Non-substitutability There are always risks of competitors entering the market, but not necessarily substituting PS2s technology with the corresponding. Rather, competitors may enter the market and look to potentially enhance PS2s technology.The driving force behind PS2s technology is the development of a technology that allows for the protection of the environment (p. 6). This technology may only be substituted by the use of incineration or landfills, and if substituted, to the detriment of the environment (p. 6). These forms of substitution do not create the same outcome as that of PS2s TPS technology. The VRIN model explores the resources and capabilities currently possessed by PS2. Option one allows PS2 to enter a somewhat new market in China, allowing NIES to act as an agent for PS2s technology.Option one presents a lower level of risk for PS2, but in doing so, results in a lower leve l of harvest-feast, contrary to option two. Option two allows a certain level of identification between the management team of Nahai, and PS2s current management team. This, alongside Nahais tangible resources, may present an attractive venture for PS2. Either option presents PS2 as a new, and highly competitive, entrant in the Chinese market. Therefore, the VRIN model confirms that PS2 may have a sustainable competitive advantage and should therefore enter the Chinese market.Both options look suitable. PS2 currently has the required resources and capabilities to pursue an equity-based entry. 5) Organisational Configuration Model The organisational configuration model looks at six main elements in organisations and can be utilize to PS2. Specifically, this model can review the problem of whether or not PS2 should enter the Chinese market, which of the two (if not both) options that they should select and whether PS2 possess the required resources and capabilities to pursue an equi ty-based entry.Leadership Paul Antle is the CEO of PS2 and leads a team of employees who all possess skills and abilities nearly the TPS technology. Nahais owner had a similar personality to Antle and was also an entrepreneur. They both identified with each other from the beginning, so there is definitely a match in regards to the leading and their ways of thinking. They had a solid trust based on this. The NIES had made the first call to PS2 about their technology (based on the State Environmental Protection Agency of China) so it is accredited that the leaders somehow matched and got along well.Vision & Strategy PS2s strategy wanted to involve international geographic diversification to propel it to not in force(p) a domestic player, but an international one. This would at the same magazine rectify their growth potential. Since both these opportunities were international expansions, it suited the strategy of PS2 and there was a match. Their vision was to become an internation al player and expand in more areas on new terms (equity basis) and these options to enter into China allowed them to do just that. Formal structures Antle as CEO leads his team of employees.Among these employees there are certain positions held such as marketing manager, operations manager and R&D manager. PS2 has a fairly rigid and hierarchical structure where certain people report to others above them. However, due to the small number of staff, there are quite frequently vertical hierarchical jumps and everyone interacts with each other. Technology The caloric Phase Separation (TPS) technology that PS2 possesses is an internationally proven technology which is the only one to be able to extract 90% of oil from industrial sludge (Peng & Beamish, 2012, p. 3).It is recognised as being world class for performance in regards to its reliability, mobility and its lack of harmful air emissions. It has been internationally proven and produces safe oil, enables the recovery of oil which ca n then be reused or resold. The technology produced no harmful air emissions, no land and water pollutants, and fewer green house gas emissions. This would be appreciated by the Chinese and their government in regards to recent policy changes and environmental protection developments. Processes At PS2, there exist several processes that act in harmony to accomplish tasks and achieve goals effectively and efficiently.There are processes that deal with inputs and outputs such as information, people and materials. There are also processes formed around customer service and after sales service for existing customers, new product development, order fulfilment as well as things like decision reservation and resource allocation. These could all be successfully employed in China. internal structures As mentioned above, although the hierarchical structure exists and is respected by all employees, escaped structures are present. These informal structures dont cause conflict as primarily it is the formal structure that employees follow.However, the CEO and management understand that sometimes it is easier to work with informal structures and that friendship groups work better with one another. For this reason, these structures exist and are granted by management to continue operating. This also leads to a higher motivated workforce. Based on the organisational configuration model that looks at six main elements of PS2, it appears that PS2 should enter the Chinese market as the leaders have good fit, the vision and strategy align with moving into global markets, and the technology is sufficient in regards to Chinas new environmental standards.Both options look suitable to be pursued. From the model, it appears that PS2 possess the required resources and capabilities to pursue an equity-based entry and therefore should enter the market. Evaluation of Alternatives Option 1 Remediation of POP-Contaminated filth Some advantages of option 1 include -The total amount of hig h-density PCB waste was about 50,000 tons, a decent proportion of the low-density waste which was figure to be 500,000 tons this was three times the amount of the Canadian PCB market (Peng & Beamish, 2012, p. 9). If the government improved its measures to protect the environment, the number of POPs in China would rise (currently a $470 million and the potential to be a $725 million market) (Peng & Beamish, 2012, p. 10). -The TPS technology differed to that of its competitors the TPS process was able to produce safe soil with an 85% decrease in volume which could be returned to the environment (Peng & Beamish, 2012, p. 3). The TPS process not only enabled the recovery of oil and other hydrocarbons for reuse or resale, but also generated its own fuel generated its own fuel source to fire the system. Compared with incineration, the TPS process would produce less greenhouse gas emissions. -Compared with the TDU unit (the current technology from a competitor), PS2s TPS technological u nit had higher mobility, which would be attractive to the Chinese market because there were numerous small contaminated sites in China. -PS2 would cooperate with NIES. NIES was a government agency so the risk of this project would be reduced significantly. NIES had extensive expertise and experience and had identified more than 300 sites in three provinces. This also acted as a free advertising campaign for PS2. Being an early entrant into the emerging market of remediation of POP-contaminated soil, PS2 would most likely enjoy the first move advantages. -PS2 was mingled in conducting market look for with the Chinese government over the departed one-and-a-half years, which meant PS2 had already gained experience cooperating with the Chinese government. The experience would be helpful if PS2 entered the Chinese market. Some disadvantages of option 1 include -The JV would need to design, engineer, manufacture and market the TPS units in China for use in various parts of China.There is no guarantee that this option will work as the JV would need to design, plan, launch and bid for, operate and participate in projects in China. -The JV would need an investiture of about $3,000,000, which is a large investiture for a company the size of PS2. Option 1 is attractive because the positive factors outweigh the negative factors for PS2. The Chinese market is huge and has great potential. Furthermore, PS2 has a competitive advantage to compete in the industry of remediation of POP-contaminated soils.However, there are some risks that PS2 needs to take into account such as the big initial investment. Option 2 crude Recovery from fossil oil Sludge Some advantages of option 2 include -Chinese oil sludge industry is large with treatment of 6. 1 million tons with Zhoushans facilities located close to costal oil terminals such as Aoshan Oil Terminal which is Chinas largest oil transhipment base (Peng & Beamish, 2012, p. 13). -New regulations in Chinese market is encouragi ng organisations not to dump but rather enforcing proper treatment to respond to environmental issues. Cooperation with Zhoushan Nahai Solid Waste Central Disposal Co. Ltd. (Nahai) in Zhejiang means PS2 would be in partnership with the largest and only permitted solid waste management system in the area of Zhoushan. -Nahai had become a leader in the management of hazardous waste and oil sludge in the Zhoushan area (Peng & Beamish, 2012, p. 13) therefore providing more tangible resources such as an oil storage facility, a waste oil recovery facility, bilge water treatment process and a solid waste dying facility. The JV would expose PS2 to a greater window of opportunity by means of the capability of processing from 10,000 to up to 100,000 tonnes of oily sludge per year (Peng & Beamish, 2012, p. 13). -The ability to leverage off PS2s international management teams experience through development opportunities of processing oil sludge recovery into other regions of China. -The inter nationally recognised TPS technology provided by PS2 addresses the environmental concerns of the Chinese government, and thus, partnering with Nahai will present this JV as the preferred vendor for oil sludge recovery systems. PS2 is well suited to Nahai as they have global experience, similar personalities, he is an experienced entrepreneur and they identify with each other. Some disadvantages of option 2 include -The permit for waste management held by Nahai is only limited to the Zhoushan area. While this area may contain a large potential of oil sludge remediation, gaining rights in other areas of China may pose an issue. -Some competitors already have the rights to other regions of China, thus gaining these permissions to other areas in China may be a drawback and saturate the industry. As Nahai is a in camera owned company, and PS2 is a public company, the provisions between the two are not definite. This JV, as with any JV between a public and private company may present a l ack of office and blur the distinctions with regards to risk, performance and funding. -The Chinese oil sludge industry is still in its infancy and is very fragmented due to various oil sludge generation locations making it difficult to expand operations into other regions. -The JV would need an investment of about $3,000,000, which a large investment for a company the size of PS2.When determining whether PS2 should enter into a JV with Nahai it is important to explore both the advantages and disadvantages that exist. While there may be some disadvantages present, there are also advantages for PS2 to enter into a JVwith Nahai that will allow for the international growth and expansion of PS2. While it may not allow for the exploration of other suitable industries, such as research into rural environments, it does provide PS2 with substantial financial gain should they consider entering into this JV with Nahai.Recommendations and Conclusions Based on the above evaluation of alternati ves, it appears that for both option one and option two, the advantages clearly outweigh the disadvantages. However, taking a scalelike look at both options, it appears option one has the same amount of advantages as option two but at the same time option one has far less disadvantages than option two. From this, it could be cogitate that option one is perhaps better than option two in regards to which option PS2 should choose.Therefore option one is the better opportunity on face value however this is not to say that option two is not viable as the analysis illustrates both provide high potential future prosperous outcomes for PS2. It is therefore recommended that PS2 enter both option one and option two, but at different times and stages. It is recommended that PS2 pursue and enter option one, the remediation of POP-contaminated soil first and foremost. The only negatives for pursuing this option is firstly the cost, which is a price of doing business and will need to be underta ken no matter how or where PS2 expands internationally.The next negative is that there is no guarantee that the JV will work, as PS2 has to do extra work such as bidding, planning, launching, operating and participating. Therefore an element of risk does exist, but the advantages and potential return outweigh this risk. The advantages consist of large amounts of PCB waste present, the fact that the TPS technology was different to any other company including its use (such as a higher mobility) and the environmental protection is enforced. Nevertheless, this does not mean that PS2 should not pursue the second option of oil recovery from oil sludge.Some of the major disadvantages deal with limited permits and areas where PS2 can use its technology, the fact that other competitors have the right to other regions of China, and possibly the problem of conflictions between the JV agreements as PS2 and Nahai are private and public respectively. There are though, more advantages than disadva ntages, and stronger ones as well. For example, PS2 would be exposed to a greater opportunity, Nahai has a strong write up and possesses the only permits in the area in question, the large oil sludge industry and the fact that both PS2 and Nahai had similar founders with similar personalities.From the evaluation of alternatives, option one is preferred, but option two still appears viable. Therefore, it is recommended the corporate level strategy is to enter into option one and be monitored based on the above conclusions. Entering both options at the same time is wild and would bear financial strain on PS2. It seems a more strategic move would be to pursue option one and monitor it in terms of its financial performance return on equity and return on investment as well as its success. If it is successful and some of the expenses are recuperated, this could be used for potential enter into option two.Therefore, it is recommended that an entry into option two is followed by the entr y of option one at a later stage (based on the assessment outcomes of option one). If however option one is a failure and there is no return on the $3 million, option two will not be pursued. Further, it is also recommended that PS2 embark on a new operational level strategy of hiring additional employees and expanding resources required to increase the probability of any captivate into China ending in a successful move for PS2.It is expected that any move into China will require a collaboration of resources with the JV and further employees to cope with the increase in activities and make sure the entry runs smoothly. The increase and hiring of new staff should specifically involve potential employees who have some cross-cultural experience and perhaps even some business experience within China. Reference Peng, G. Z. , 2012, Phase Separation Solutions (PS2) The China Question, Richard Ivey School of Business, The University of Western Ontario, p. 1-18