North China Pharmaceutical Group Corporation Changes In Strategy Research

North China Pharmaceutical Group Corp. (NCPC) is a leading pharmacymanufacturer in the provincial capital of Shijiazhuang City, Hebei Province. NCPC, in itsearly days, was one of the key construction projects during Chinese First Five-Year Plan,consisting of the antibiotics plant of the 156 assistant projects of the former Soviet Union,the starch plant and the medicinal glass plant from the former Democratic Germany in June1953, with a total investment of 75.88 million RMB yuan. The successful operation startedin June 1958. NCPC created a history of large-scale production of antibiotics, putting anend to the dependence on imports of penicillin and streptomycin. The situation of lackingmedicine changed significantly.With the development of 40 years, NCPC has been continually growing and takingthe lead in China pharmaceutical industry in key economic indexes. By the end of 2001,NCPC's total assets have been 15.5 billion RMB yuan. Covering 1.3 million square meters,hiring 18,500 employees, having 9.1 billion yuan of profits, 6.95 billion RMB tax andprofits, 630 million US dollars of export.However, from 2003, NCPC's operating performance gradually decline Andproduction workshops began the rotation of the production. But there was a substantialincrease in inventory. The products lack of competitiveness in the market. Meanwhile, theproblems of internal management began. Just in 2002. Product quality problems inNational market led to a result of litigation resulting from payment of up to 40 million.Sales management and systems implementation were negative, causing a lot ofuncollectible accounts receivable.It is well known that the pharmaceutical industry is a traditional but rising industry.Its status is increasing in the national economy. But because of the extremely intensecompetition among more than 4000 Pharmaceutical factories, many enterprises wereeliminated. In China's WTO accession, borderless market is formed. And China has thebest market in the world. In this environment, as a lead pharmaceutical factory, NCPCshould promptly adjust its business strategies, integrating the resources to prepare for thesecond development, building up the brand of NCPC, and rejuvenating our nationalindustries.This article analyzed NCPC's operating environment and its strength & weakness inaccordance with the financial statements in recent years, finding out the reason of thedecline of current business performance. Then corresponding solutions were made so thatNCPC will extricate itself from its current business situation, returning to the road of rapidgrowth.