Research On Transformation And Upgrading Strategy For Processing Trade Oriented Manufacturing Companies

DongGuan City is known with biggest cluster of Taiwan-funded enterprises in Mainland China.Most of them are small and medium sized enterprises and engaged in processing trade,also known as OEM manufacturers.2008 financial crisis had overwhelming impact on DongGuan Taiwan-funded enterprises.Especially,in recent years,overseas demand declining,Chinese mainland labor cost continuously increasing,raw materials cost-up,US Dollar depreciation and RMB appreciation… etc.The multiple strikes stressed up Taiwan-funded enterprises.A lot of Taiwan-funded enterprises went bankruptcy in past years.Small and medium sized OEM manufacturers had been seeking for their way out.Some of them started transformation and upgrading.Based on the theory of competitive advantage of strategic management,this research is intended to study the transformation and upgrading strategy for a small and medium sized OEM manufacturer,through literature review and case study approach.It took DongGuan Evervictory Electronic Co.,Ltd.(EVR)as a case study company.First of all,the research described research background,research aim,logical structure and research method.The case analysis was conducted by the major affecting factors of strategy selection,including industry development,external competitive environments,and internal resources and capabilities.PEST and SWOT analytical tools were adopted.Secondly,it made literature review on transformation and upgrading on basis of global value chain theory and relevant researches.Thirdly,it introduced EVR company profile,development milestones and growth challenges after transformation and upgrading.Fourthly,it made comprehensive analysis with an attempt to identify the crux of the growth challenges.Fifthly,based on case analysis,the author crafted transformation and upgrading strategy portfolio for EVR: Expansion Strategy,Technological Innovation Strategy,Restructure Strategy,and Management Innovation Strategy.Further to case study,the author concluded that: a)Enterprise transformation and upgrading is a long term strategy.It has to consider external environment dynamic changes,as well as company resources and capabilities so as to select applicable transformation and upgrading strategy.It is not one step solution.In the case of multiple business modes co-exist,the company shall combine market potentials with its own strength,select a core business in development.b)In the process of transformation and upgrading,technological innovation is key step.Other than its own internal resources,the company shall integrate all the available external resources to maximize corporate efficiency and benefit.c)Enterprise organization,product structure as well as enterprise management also need to adapt to enterprise transformation and upgrading.This research paper made case study on a representative Taiwan funded electronics OEM manufacturer in DongGuan.It systematically analyzed its transformation and upgrading experiences,its developing challenges and opportunities.Hope it can have some reference value to other Taiwan-funded OEM manufacturers in DongGuan as well as to other OEM manufacturers while making transformation and upgrading strategies.