| The small and medium enterprise (SME) of third-party logistics companies in Hong Kong have faced the enormous challenge during globalization. Since the innovation in economic policies of China, the environment is to be more suitable for business. This has attracted multinational companies to invest and to set up their own factories in China and made China maintain a rapid economic growth. On the contrary, many investors closed down their factories in Hong Kong due to the high production cost of Hong Kong and moved their factories or production procedures into China mainland. Hong Kong was forced to transit its economic model from manufacturing to others, such as services. Moreover, when China has been a member of World Trade Organization (WTO), many international logistics company will enter into the logistics service markets of China, then there will have a great competition to Hong Kong third-party logistics companies. In this situation, the business operations of Hong Kong SME logistics companies will be more difficult. By introspection, they know there must be an innovation in their business development strategies to confront the change in business and operation environment. They must find out their survival area, otherwise they will be faded out. Then the logistics market will be monopolized by the large logistics enterprise. This paper tries to suggest the ways and strategies in the business development to the Hong Kong SME logistics companies for surviving.After literature review, this paper discusses the characteristics of the operation and management targets of Hong Kong logistics companies i.e. lower cost, differentiation, more efficiency and effectives, and competitiveness improvement. A case study of a Hong Kong SME third-party logistics company, B Company, illustrates the issues in their operations and management and try to reveal in depth the issues in the Hong Kong SME logistics companies. Then, this paper analyzes the impact of the change in the economic environment to Hong Kong third-party logistics companies. Finally, suggestions of how to improve the business development will be proposed.The suggestion is that Hong Kong third-party logistics companies could arrange merger, acquisition and/ or alliance to increase their business scales. The merger, acquisition or alliance can be horizontally and vertically, including upper level and lower level. The benefits from merger, acquisition or alliance are that they can share their experience, enjoy the benefits from economic scales, improve competitive advantage and develop their own brand names and images. |
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