Strategic Transformation Of The Small And Medium-sized Labor-intensive Enterprises In Zhongshan

Small and medium-sized labor-intensive enterprises play a decisive role in China's national economic development. After 20 years of rapid development period, many enterprises suffer a downturn because of facing rapidly rising costs, labor shortages, financial difficulties, the financial crisis and other external environment changes since 2005.They urgently need change or transformation. Corporate restruction has become a domestic public hot topic in recent years. Large state-owned enterprise groups and listed companies become the focus of research. Small and medium-sized labor-intensive enterprises are less involved in the research of enterprise transformation. According to a few literatures that can be found, most of the views are from Stan Shih's famous "smile curve" theory. They put forward that the transition path of manufacturing enterprises is into the two ends of the curve. It means improving the added value of products by introduction of R & D, technology, brand, service and other elements, or transition into other high profit industrial chain link, or simply transition into other sectors such as services. But after the in-depth research, we found out that some small and medium-sized labor-intensive enterprises have clever use of their extensive industry experience and market advantages. They make the best response to environmental change, make a lot of change and innovation to reduce the cost. They successfully avoid the external risks, create new competitive advantages, and complete the transformation of enterprises. For example, the M company in this article, shifted from the single plant pattern into"remote factory + farmer"mode. It significantly reduced the production costs and earned a substantial profit, through the reconstruction of its value chain and business organization pattern. The M company implemented the new strategic transformation, successfully transferred from a traditional manufacturing enterprise into a new type of enterprises which have a set of information management, outsourcing and other manufacturing.Small and medium-sized labor-intensive enterprises have a big difference from large enterprises, especially in the aspects of market, size, mechanism, organization and history. We need to be more close to the market, have more angles and different categories of research about the problem of strategic transformation. The object of this research is the strategic transformation of small and medium-sized labor-intensive enterprises in Zhongshan city. This study based on the method in the literature, used empirical analysis including interviews, investigation and comparison. It focused on revealing the motives, bottleneck, goal and main path of the strategic transformation. It particularly analyzed the M company's strategic transformation process and its enlightenment. The strategic transformation pattern of the M company is not necessarily typical and representative, but its unique approach to gain the advantage easily in the changing market was able to give some enlightenment to the business community and academia. I hope that my crude remarks may draw forth by abler people.