Discussion About The Business Model Of Gold Production And Management In China

Though the gold industry was not set up in China until the reform and opening-up movement in 1979,great strides have been made over the past one decade or so since China's cancellation of the "unified purchase and distribution" planning system in 2001.A market scale with an annual revenue of 300 billion has taken shape.After undergoing the raw material promotion period,the consumption-driven period and the industry and finance combination period,China's gold industry has formally stepped into the important development period of "Intelligent Manufacturing","Industry 4.0" and"Internet Plus".So far,China has developed the largest gold processing base in the world,and turned into the most important gold consumption market.In recent years,China's gold consumption market,which has gradually expanding its production capacity and sales volume,has been faced with the problem of excess production capacity and entered into a struggling developmen.t period.Compared with the gold industry in developed countries,the one in China is large in scale but not strong in competitiveness.A series of problems hindering development of China's gold industry include inadequate cultural connotation,backward processing techniques and production flows,quality inconsistency,lack of diversified sales models and channels,and inadequate brand construction capability.The root cause of these problems is that the gold manufacturing industry and the gold retail industry requiring a large amount of capitals have difficulties in financing.The high financing cost brings down their profit rate.This paper attempts to reform the current commercial model so as to cut the financing cost and improve the profitability of gold manufacturing and retail enterprises.In this way,these enterprises will have adequate funds for daily operation,including human resources construction,financial management,equipment update,technical innovation of products,and marketing services.In this paper,CompanyZijinis adopted as a research object.Financial performance of Company Zijin before and after reform of its commercial model is compared to verify feasibility of reducing the financing cost and improving the profitability via the commercial model reform.Meanwhile,combining the commercial model reform of Company Zijin,the author conducts planning of the future development strategies for Company Zijin.This paper consists of six chapters.Chapter 1 introduces research background,questions and significance as well as research methodology and framework of this paper,and expounds on theories related to corporate development strategies.Chapter 2 gives an overview of the business model of gold processing manufacturing and gold retailing in China's gold production and management enterprises.Chapter 3 and Chapter 4 revolving around the main line of reducing the financing cost,explicates how to implement the gold leasing service commercial model for the gold processing and manufacturing industry and for the gold retail industry,respectively.Based on the case study of the underway project in which Company Zijin provides gold leasing services for Company HX,Chapter 5 proposes development strategies and measures for Company Zijin.Chapter 6 summarizes main research findings of this paper,and puts forward approaches about how to solve the problem of the financing cost in the gold industry.Meanwhile,management suggestions for better development of CompanyZijin in the future are also put forth.Finally,according to research of the commercial model reform in this paper and the verification of feasibility of the commercial model reform based on the case study of Company Zijin,the author proves that gold financing services oriented towards the gold processing and manufacturing industry and the gold retail industry can effectively reduce the financing cost,decrease the total cost in the value chain,and improve enterprises' profitability.During the commercial model reform process,enterprises should proceed from their practical situations,observe market changes,and strengthen risk management.Only when the commercial model reform is integrated into the corporate development strategies can enterprises increase their core competency.