Design Management Mode Transition Of Luoyang HY Industry&Trade Co., Ltd.

OEM (Original Equipment Manufacturer) production originated from European and American countries in the1960s and1970s. Due to the rapid development of science and technology, as well as the pursuit of high profits in developed countries, it promoted international division of labor in industry, providing a rare opportunity for Chinese OEM production. However, after the outbreak of the global economic crisis in2008, international giants start to shift their attentions to other lower labor cost countries and regions. As a global power of OEM production, Chinese OEM economic mode changed dramatically.Luoyang HY Ltd.(hereinafter referred to as HY) is managed by Henan Zhonglian Group Enterprise, which is affiliated with Henan Bureau of Prisons, and HY’s mode of operation is OEM-based. After nearly a decade’s development, HY uses its low labor cost advantage in the initial stage, accepts processing with customers’ material as well as with customer’s samples, realizing the primitive accumulation of capital and technology imitation, laying the foundation for next steps in the development. HY suffered orders reduction or halt in2008, so that HY ranked bottom of the list of total output value of enterprises in Henan Bureau of Prison. Therefore, how to find a suitable and sound development for the business mode is a new problem in recent period HY has to face. In this case, the paper discussed and researched business model theory and core competence theory, and used literature analysis, SWOT analysis and survey research to resolve the path of its current mode formation, dug its problems, and found out the reason, then proposed ideas, objectives and principles for the transformation of HY’s business mode, and develop strategies in technological innovation promotion, new product development, market expansion and training of human resource, in order to promote a healthy development of the company.Through this study, so that in such a time that political factor and economic factors are changing rapidly, HY can change the old business model, introducing new ideas and methods, to find ways for their own special operating conditions, proposed its business restructuring feasibility plan. It is also of much significance in the operation model and development to similar enterprises.