Research On The Transformation Strategy Of Suzhou ZXL Enterprise

From the Lehman Shock in 2008,the traditional electronic components manufacturers in China,especially the representative companies in the areas of Pearl River Delta and Yangtze River Delta,started suffering from the existing predicaments.The main businesses of the manufacturers are producing the low-ended components for the large international telecommunication companies who outsourced the manufacturing process in the developing countries.As the shopping enthusiasm fades,the orders from the large clients reduced dramatically.Facing with the bargaining requests from the lower-stream clients and the lack of bargaining power towards the upper-stream suppliers,the manufacturers are in a dilemma.On the other hand,the appreciation of Chinese Yuan as well as the depreciation of Euro,Japanese Yen,Korean Won have been reducing the competitiveness of the Chinese companies globally.In addition,the better labor rules and policies in China increasing labor costs,thus cutting manufacturers'net profit.In the meantime,as the dramatically fast development of internet and new technology,most of products must face the competition from substitute goods and fast-speed replacements,and the traditional client bases have been retreated or transformed.For example,notebook computers are largely replaced by panel personal computers,traditional phones are replaced by smart phones,and Liquid Crystal Display Television is prevalent.Suddenly,the marketing environments of products and clients are all changed.The best period with preponderance of cheap labor ends.Enterprises must face strategic transformation,or will die.This article through the study and analysis of the Product Life Cycle Theory,Competition Theory,the theory of Economics and Strategic Management of the domestic and foreign,studies the Motive of transformation,the Mode of transformation and the risk management of transformation.Also,according to the transformed company's successful experiences,this paper comes up with a series of methods to solve the problems of "if necessary,when and how to transform",especially aimed at those traditional private exporting electronic components enterprises.Using Suzhou Zhongxinglian which the writer works in as an example,this paper analyzes its industry life cycle,competition position in the industry,internal existed resources and potential opportunities,and concludes that it has been in the mature or recession period and it must transform.Thus,it explains the necessity of transformation.Then,based on the premium customer in automotive electronic field,as well as internal technical ability in mechanics and electrics,even with some deficiencies,it has the basic and necessary conditions to transform to the automotive electronic components industry.Thus,it explains when to transform.To build up the competitive advantages in the new field,the company develops a series of strategies on recourses input,talent introduction,market development and financial management.It also makes a clear strategy map with BSC(The Balanced Score Card).At last,it evaluates the preliminary implementation achievements and the potential risks and those preventive actions.Thus,it explains how to transformThis paper,in view of the common traditional electronic private enterprises,analyzes and researches the internal and external environments,studies the transformation motives,modes and strategies.The feasibility and risk of strategy implementation has been evaluated rigorously and scientifically.Subsequently,the implementation effect has been analyzed and following research and development has been conducted.It is expected that the research will provide some inspiration and reference for the similar enterprises.