Market-Entry Gambit

The record

1. 2000

   Vodafone

   Held in part

   Whether to acquire Mannesmann in a giant all-share deal at peak-market prices

   • Acquire Mannesmann all-share — Buy Mannesmann in an all-share deal at peak-cycle priceschose this
   • Do not acquire — Decline the giant peak-market acquisition

   Stated reasonVodafone bought reasonable assets to build a global empire, but paid in its own bubble-priced shares at the top of the dot-com market

   Committedroughly $180 to $181 billion (all-share deal for Mannesmann)

   What happened

   • 2006 goodwill impairment: £23,515 million of goodwill impairment, principally in Germany and Italy
   • 2007 goodwill impairment: a further £11,600 million written off, principally from Mannesmann
   • 2006-03-17 divestiture of Vodafone Japan: sold all of Vodafone Japan to SoftBank for £8.9 billion (approximately US$15.1 billion)
   Read the full analysis →
2. 2017

   ByteDance / TikTok

   Held

   How to win American teens: build a US audience organically or buy one via acquisition

   • Build audience organically — Earn Western teen trust from zero, as every prior Chinese app tried
   • Buy Musical.ly's audience — Acquire a US/Europe teen-saturated app already builtchose this

   Stated reasonTrust between a teenager and an app is the slowest thing to build, so buy the audience that already exists

   Committed$800 million to $1 billion (reported price for Musical.ly; no exact figure disclosed)

   What happened

   • 2018-08-02 app consolidation: Musical.ly accounts and data folded into TikTok
   • 2019-02-27 FTC COPPA penalty: settled with FTC for $5.7 million, the largest COPPA penalty at the time
   • 2020-08-14 divestiture order: President ordered ByteDance to divest US TikTok interests within 90 days, citing the 2017 acquisition
   Read the full analysis →
3. 2018

   BMW

   Held

   Whether to deepen into China by taking majority control and locking the venture to 2040

   • Take majority control to 2040 — Raise stake to 75% and lock contract until 2040.chose this
   • Stay at shared stake — Keep the shared three-way ownership arrangement.

   Stated reasonBuilding in China with a state-linked partner gave BMW cars made where they were sold, priced for the market, and politically welcome

   Committedmore than €3 billion in new plant structures (Pledged with the 2018 stake increase; a further RMB 10 billion sunk into a Shenyang battery plant.)

   What happened

   • 2023 China share of Group deliveries: China was BMW's largest market at 32.3% of Group deliveries, with 824,932 vehicles sold, up 4.2%
   • 2024 China deliveries: China deliveries fell about 14% to roughly 715,200 units, and China's share slid from 32.3% to 29.2%
   • 2024 Group net profit: BMW's 2024 net profit fell 36.9% to €7.68 billion and automotive EBIT margin dropped to 6.3%
   Read the full analysis →
4. 2022

   Alibaba

   Held

   Whether to keep publishing the Singles' Day GMV figure or go silent on it

   • Keep publishing GMV — Announce the Singles' Day total loudly each year as before
   • Go silent on total — Withhold the figure and use vague language insteadchose this

   Stated reasonThe number had stopped climbing, so announcing it would confirm the slowdown

   What happened

   • 2023-12-31 Taobao and Tmall Group revenue growth for the 2023 Singles' Day quarter: RMB 129,070 million, growth of just 2% year over year
   • 2023 Pinduoduo China e-commerce share vs Alibaba: Pinduoduo at 19%, up from 7.2% in 2019, with Taobao and Tmall combined at 44%
   • 2024 Taobao and Tmall China commerce retail revenue for fiscal 2024: RMB 414,414 million, up 5%
   Read the full analysis →
5. 2023

   ASML

   Held

   Whether to keep selling DUV machines to China as export controls were announced with future effective dates

   • Sell DUV before controls bite — Keep shipping unrestricted DUV to China ahead of the dated restrictionschose this
   • Curb China DUV sales — Voluntarily hold back sales to align with US policy intent

   Stated reasonDutch policy was country-neutral and invited continued case-by-case sales, and buyers front-loaded orders against dated, itemized restrictions

   What happened

   • 2024 Peak quarterly China share: China was 49% of ASML net system sales in Q2 2024, its highest-ever quarterly share
   • 2024 China share falls back: China's share fell to 29% of net system sales for full-year 2024
   • 2024 Sales to Chinese entities of concern: ASML sold nearly $3 billion of equipment and services to Chinese entities of concern in 2024
   Read the full analysis →
6. 1926

   Novo Nordisk

   Held

   Whether to direct company profits to a foundation or to private shareholders

   • Adopt foundation ownership — Direct profits to a foundation to reinvest in researchchose this
   • Answer to shareholders — Distribute returns to private owners on a quarterly clock

   Stated reasonA structure that ploughs profits back into research and can think in decades because nobody can force it to think in quarters

   What happened

   • 2023 GLP-1 diabetes market value share: 53.1% value share, with US GLP-1 sales up 50% and obesity-care sales up 114%
   • 2024-03 market capitalization: touched roughly $604 billion, worth more than Denmark's entire GDP
   • 2026 market capitalization: fallen to roughly $210 billion as competition arrived
   Read the full analysis →
7. 1977

   Aldi

   Held

   How to enter the US grocery market: force a large box or hold the disciplined format

   • Close the ill-fitting store — Shut a building too large to run the Aldi way rather than compromise the formatchose this
   • Double down on big box — Keep operating the oversized store and adapt the range to fill it

   Stated reasonThe building was too large to operate the Aldi way, so a store too big is a broken machine Aldi would rather not run

   What happened

   • 2024 US store count: 2,428 Aldi Süd stores in 39 states
   • 2024 US store visits: 18.2% surge over prior year, visits per location up 13.5%
   • 2024 expansion plan: invest over $9 billion and open 800 new stores by end of 2028, reaching nearly 3,200
   Read the full analysis →
8. 1987

   Yum Brands

   Held

   How to enter the China market — export the American model or localize it

   • Export the American model — American expat managers and rented local supply chain
   • Localize managers and supply chain — Taiwanese operators and a proprietary supply chain from scratchchose this

   Stated reasonTaiwanese operators understood Chinese culture from the inside and China had no supply chain to rent, so KFC built its own

   Committedabout $1.1 million (cost to build the first Beijing store)

   What happened

   • 1988 first-year store sales: sold the equivalent of about 300,000 chickens and cleared over $3 million in sales
   • 2013-01 same-store sales during supply scandal: down 41% year-on-year in January 2013
   • 2024 China store count and revenue: KFC's 11,648 China stores generated $8.5 billion and net profit climbed 10% to $911 million
   Read the full analysis →
9. 1987

   Nestle

   Held

   Enter China by building the dairy supply chain first, or launch products directly into the market

   • Build supply chain first — Co-invest in dairy zone and cold chain before sellingchose this
   • Launch product first — Ship product and market into the existing market

   Stated reasonIn markets where infrastructure does not exist, the barrier is being able to physically deliver, so building the missing supply layer turns underdevelopment into a moat

   What happened

   • 1992 China dairy factory opened: First dairy factory opened in 1990; Yunnan coffee project launched 1992
   • 2023 Emerging-market organic growth: Emerging markets grew 8.4% organically versus 6.4% in developed markets
   • 2024 Emerging-market organic growth: Emerging markets at 3.7% organic growth led the group of roughly CHF 91 billion in sales
   Read the full analysis →
10. 1987

    Yum Brands

    Held

    Whether to enter mainland China as the first Western QSR and build its own infrastructure and bicultural bench

    • Enter China first, build own — Move in early, build own cold chain, staff with a Taiwanese benchchose this
    • Wait for infrastructure — Hold back until logistics and market templates existed

    Stated reasonExisting Chinese logistics were poor or non-existent, so KFC built its own distribution and ran the market via a bicultural Taiwanese cohort given operational autonomy

    What happened

    • 2026 store count: over 13,000 KFC restaurants in more than 2,600 cities
    • 2016-10-31 spinoff completed: Yum China separation completed, one Yum China share per YUM share held
    • 2024 revenue and net profit: $11.3 billion in revenue and $911 million in net profit, 1,751 net new stores opened
    Read the full analysis →
11. 1987

    7-Eleven

    Reversed

    Whether Southland should take itself private via a leveraged buyout to defend against a takeover threat

    • Leveraged buyout to go private — Take on heavy debt to keep control and repel raiderschose this
    • Remain public — Face the possible hostile takeover without leveraging up

    Stated reasonTo preempt a reported hostile takeover threat and keep control of the company

    What happened

    • 1990-10 default on debt: defaulted on $1.8 billion in publicly traded debt and filed a bankruptcy plan
    • 1991-03-04 ownership sold: Southland sold 70% of common stock to IYG Holding Company for $430 million
    • 2005 full acquisition: Seven-Eleven Japan launched a tender offer for the remaining 27.7% it did not own, completing the buyout
    Read the full analysis →
12. 1993

    HSBC

    Held

    Whether to accept a London headquarters as the Bank of England's condition for acquiring Midland Bank

    • Accept London HQ for Midland — Relocate world headquarters to London to win regulatory approval for the acquisition.chose this
    • Forgo the Midland acquisition — Keep the Hong Kong headquarters and abandon the deal.

    Stated reasonRelocation was the price of the Bank of England's approval to acquire Midland Bank

    Committed£3.9 billion, around $7.2 billion at the time (Cost to acquire Midland Bank)

    What happened

    • 2023 Asia share of revenue: Asia contributed roughly half of HSBC's total reported revenue, out of $66.1 billion worldwide
    • 2023-05 Asia spin-off vote: The resolution to consider an Asia spin-off lost and never came close to a majority
    • 2025-01 restructuring into four businesses: HSBC reorganised into four businesses anchored by separate Hong Kong and UK units while keeping a single London-domiciled legal home
    Read the full analysis →