Research On Operational Status And Development Strategy Of Jilin Province Security Industry

In China, security industry now has become an important participator of capital market during more than ten years'develpement.There are more and more large security company, sales department, and high quality talents. But recently, as competition becomes more serious, security industry in China emerge some disadvantage, i.e.lag profit pattern, short of operational way, lack of innovation.Nowaday Security company can be divided into two types, which are Broker Company and Comprehensive Company, the latter is better than the former in many side, i.e. size, business function, policy assistant etc.The development history of Security Company is reviewed, and the difference between Chinese security company and national famouse security company is pointed out, which can be summarized as follows:lack of production and innovation, weakness of management, simpleness of profit structure, smallness of capital size, and lack of capital management experice.The circumstance of Security Company is analized.The develpement of economic and law system, the entrance into WTO all give Security Company a chance. But more and more seriouse competition, freedom trend of commission acceptance, and market recession make it difficult for security company operation.Jilin Province security market was established in 1988.After more than ten years'development , there are two security companies and one trust company whose business also includes security, there are 58 security sales departments, 25 security service departments. In 2003, Jilin Province security trading volume is 2.68 percent of the whole country's trading volume. The two security companies are Northeast Security Co. which is Comprehensive Company, and ChangCai Security Co.which is Broker Company.Both of these two companies have safety and liquidity assets, maturity management structure and risk control system.Sales departments of Jilin Province cover with almost all the developing towns.The small size sales departments, which has lower cost, are more profitable. This means big size, luxury sales departments are not suitable for modern security market.There are only more than ten years of develpement history for Chinese security industry. So it is normal that there are some problem and risk. Security company risk can be divided into self-operational risk and broker risk. Self-operational risk includes basic risk and management risk, which are interest risk, purchase power risk, political risk, operational risk, and credit risk; Broker risk includes credit trade risk, trade mistake risk, system guarantee risk, open-account risk, and sevice risk. Security company can manage risk by perfecting system , supervising , and self-disciplining.Security company can also control risk by polishing up circumstance and enhance self-discipline.The bankruptcy of Xinhua Security company gives some lessons to Jilin Province security industry.As a security corperation, based on sales department is connatural limitation, imperfect inner control system and lack of risk control consciousness and ability will speed up the formation of risk. Small size, most capital invested in fixed asset, strait business scope, sole revenue structure will block security company's development. There are some problem in Jilin Province security sales department, for example, asymmetry sale net, similar structure , homogeneity service , distemperedness inner management system.The development of Jilin Province security industry is a big system engineering, which needs each sides' management and administration.Firstly, government must program the development of Jilin Province security industry; pay more attention to capital market; enhance the administration of security company; and keep away risk.Secondly, security company must focus on improving core competitive ability, which can be achieved by the following way: grasping chance and change profit pattern;exploring production innovation; practicing high level broker system; expanding capital size , and strengthening business.Sales department should modulate broker busines...