Case Title
The Chinese Fireworks Industry- revised

Date
October 8th 2012

1. Issue identification：
Jerry Yu is considering whether to invest in Liuyang fireworks factory, so he made an evaluation of the Chinese firework industry. Here is a brief identification of the issue:

1.1 History of fireworks:
There is an old-line of the Chinese fireworks, which is tightly combined with varieties of celebrations and festivals in China. Especially, Liuyang is known as “the home of fireworks and firecrackers” and good at making varieties of fireworks. And fireworks and firecrackers has become the pillar industry of Liuyang.

1.2 Product:
Fireworks mainly include two categories: display fireworks and …show more content…

After 1949, government-run factories replaced the family-owned workshops.
After the reform towards a market economy started in 1979, most of the factories were broken up and became family-run units of production again.
Since the opening of the Chinese economy in 1979, exporting had become a major market for the Chinese fireworks industry. As one of the most celebrated products out of China, export sales of fireworks had risen dramatically between 1978 and 2009.

2.13 Social
In a staple of Chinese New Year celebrations, weddings, grand openings, births, deaths and other ceremonial occasions, people get used to setting firecrackers and fireworks. Also, the loud reports and burning fires of firecrackers were found to be perfect for frightening off evil spirits and celebrating good news at various occasions. For more than a thousand years, the Chinese had been seeing off past years and welcoming in new ones by firing firecrackers. To conclude, the fireworks and firecrackers are essential to Chinese people.
Fireworks made their way first to Arabia in the 7th century, then to Europe sometime in the middle of the 13th century. By the 15th century, fireworks were widely used for religious festivals and public entertainment. In 1777, the United States used fireworks in its first Independence Day celebration, and fireworks have become closely associated with July Fourth celebrations ever