Business Model Innovation Of Hengrui Medicine

The current Chinese economy is faced with a problem-over capacity. The shortcomings of Chinese economy’s extensive growth are appearing. How to realize the transformation and upgrading of manufacturing enterprise business model, is the industry concern, as well as an important topic in academia. The competition between companies today is the competiton of business model, it is not only a way to earn money, but also a sustainable way to turn a profit. Combined with the global economy trend of the industrial economy to service economy transformation, business model innovation and servitization can be a direction of the upgrading of the manufacturing enterprises in our country.In recent years, pharmaceutical manufacturing is growing in its economic status. This paper takes it for example to illustrate business model innovation. First of all, we make an introduction of the industrial development history. In the early stages of new China, pharmaceutical industry in our country has a weak foundation, and gradually develop to the present achievements. Then we analyze the current situation of the industry with the PEST model. Finally, a comparison between Chinese and foreign pharmaceutical industry is made, so as to understand our limitations and future development trend.There are many ways to build a business model. In this paper, we choose a brand-new model, which is build on the base of Osterwalder business model canvas, whose modules are modified with service-dominant logic. It consists of four main parts: localization, stakeholders, key resource &ability and the financial aspect. Then we carry out a case analysis about Hengrui Medicine, we apply the model to design an entirely new business models, and compare it with the original model, providing a beneficial reference for enterprise strategic planning.The core of business model transformation is value creation, to test its results, this article predict the future value of Hengrui Medicine with the Present Earning Value Method, as well as the PE ratio method and PB ratio method. It proved that business model innovation is helpful to the growth of a company’s intrinsic value.