| China's entry of WTO has witnessed prosperous development of small and medium size int'l trading company in China. With deepened reform of foreign trading regime and opening of foreign trading permission, a multi-entity, multi-ownership, multi-level, multi-channel business model is being formed. On the other hand, relevant regulations were made from central and regional government to foster the development of small to medium size enterprises. Especially, Shenzhen municipal government has set designated funding to support private and small to medium size enterprises and to assist expansion of domestic and global market. In September 2006, in order to further optimize industry structure, expedite the growth model reform of foreign trading, central government increased the exportation refunding rate from 13% to 17% for critical industry equipment, partial IT and bio-chemistry products, and other hi-tech products under exportation encouragement list of China's industry policy. All the above measures have expedited the growth of small to medium foreign trading companies.Rapid development of IT and e-commerce has also brought unprecedented opportunities for small and medium foreign trading companies. The coming of internet era has led significant revolution of international trading model. E-commerce has accelerated the development of international goods trading by breaking through the geographic restraint, shortening transaction chain, saving transaction cost. Efficient utilizing of business flow enables a company to go beyond the restraint of economic scale, overcome the entry barrier of global market. IT has also changed the transaction methods of international business. Electronization of business exchanging data including PO, invoice, B/L, customer declaration sheet, place of origin certificates have made transaction in international business more swift and convenient. Virtual Enterprise, a new type of business entity is coming into our sight. As, Shenzhen Leo Electronics (Leo as below) is a small size foreign trading company founded two years ago specializing in exportation of computer peripherals and electronic consuming products. With the deepening of China's openness policy, more and more companies are entering the field of international trading including foreign companies with strong financing and HR advantages. On the other hand, many manufacturing companies are transforming to self exportation from traditional way of relying on trading company. With the multi-challenging from trading giants, small and medium size trading companies and other new entries, how Leo should understand the current competition environment properly, adjust business strategy in time and stand soundly in the market with sustainable growth is the topic which this report is to focus on.The author, as the founder of the company, based on thorough analysis of external and internal business environment which Leo is facing, objective assessment of the advantage and disadvantage of existing resources, has provided a growth strategy for future practice. It has set the clear direction for how the company can survive; obtain competition advantage and sustainable growth. It is believed that Leo should continue the structuring of"virtual enterprise", focusing on exploring customer resources, improving customer service, virtualzing manufacturing management, logistic and financing, strengthening the existing advantage in web-marketing. In the long term, the company should specialize in electronic consuming sector, gradually build brand value and quality level strength in new production introduction in selective markets. |
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