A Study Of Strategy Of Kelon Of GuangDong Province

Guangdong Kelon Electrical Appliances Company is one of the leading enterprises inthe household appliances industry. As the increasing advance of strategic reform of nationaleconomy, the adjustment and improvement of industrial structure and diversified marketstructure, the enterprise faces unprecedented crisis. Many affairs, such as the business andmarket range, organizing and products structure; have to change a lot under the condition ofmarket competition and large-scale combine and reform of enterprises. Meanwhile, manytransnational corporations get into China, which results in the great increase of competitionpressure of national enterprises. Thus, Kelon Company has to renew its developingstrategies in time to gain success in competition.Enterprise strategy theory is composed of four schools, that is, classic enterprise strategytheory, modern enterprise theory, nuclear ability theory and strategic union theory. The firstone emphasizes adaptation to environment and programming and carrying out of strategy.The second one emphasizes the decisive function for the ability to make profit caused byindustrial characteristics and developing tendency; also the relation and power contrast ofrelative enterprises. It also provides two important study tools ------industrial structureanalysis model and value chain analysis model. The third one stresses that the basic reasonfor the profit differences among enterprises is the valuable, rare, irreproducible andimplacable resource and ability. The last one stresses competition and cooperation. Thistheory believes that the competition advantage is based on the combination of the advantageof the enterprise itself an others.According to the analysis of the market demanding and structure in householdappliances industry, there are some opportunities for Kelon from the point of view of theexternal environment. They are the policy of enlarging the internal demand of the country;displacement of household appliances; the purchasing capability of household appliancesincreased by citification; new changes brought by new consuming fashion and ideas;population element; the spatial area in countryside and the mid-west area; the newdeveloping chance with the transfer of international industry. Meanwhile, there are alsosome risks, such as the invading of international trademarks, the infiltration in business ofhousehold appliances and the increasing price of raw material.According to the analysis of some key links in Kelon, such as the inside resource andvalue chain, we can see that the company has gained strong material base and richproducing experience, thus it possesses strong competition ability. Its advantages are: thelarge scale of household appliance products; as the vanguard in this industry; the leadingtechnology in the world; multi-products; a lot of producing area; powerful controlling ofmarket results from sound selling network and numerous selling staff member; the solutionof the motivation for enterprise development; the strategic union with companies belong toGreenKeer, which provides shares knowledge, techniques and market. Its disadvantages are:no ability to produce some important components such as condenser and electric controllingsystem; no washing machines; no experience and ability to deal with numerous trademarksan lack of system program for its trademark; lack of obvious originality in its productscompared with other competitors; low efficiency and high cost of the enterprises.Effected by the old managing system, the problem of no core competence exists in allhousehold appliances industry in China. Actually, the process of recognizing the corecompetence is also the process of understanding how the company gets the Kelon now hasthe competence of design and manufacturing the main products, the competence of utilizingall kinds of resources, the competence of marketing, and the competence of reform. Basedon this, measures should be taken to help forming its own core competence.Based on the analysis of the internal and external environment of Kelon, the strategytarget for Kelon in the future should be made as having its feet on the major and reinforce itskernel to combine with others, strengthen itself and open up new market. To be specified,The basic strategies is concentration, differentiating, advancing, withdrawing andcooperation.There are five main strategic measures. The first one is to increase system renewal,stress the strategic integration and construct the system base for developing nuclear ability.This one is composed of the reform of the business, dealing with capital and strategicintegration, etc. The second one is to cooperate in techniques and develop the technicaladvantages. And this one includes the changing thoughts for development, exploit nuclear...