The Analysis Of Hisense Electricco.LTD Technology Capital And Its Contribution To Profits

After20years of rapid development, Chinese household appliance industry hasbecome few international competitiveness industries.But because of the lack of coretechnology, the development of household electrical appliance enterprise has facedthe bottleneck. In many home appliance enterprise, Hisense’s first strategy is"technology support enterprise, and spread the company’s operations around thetechnology. To reveal the contribution for technology capital to corporate profits,determine technology capital strategic advantages, this paper selects Hisense as theexample. This paper has analyzed the trend of technology capital, estimated itscontribution to profits.The paper use case study method. This paper is divided into five parts contentstructure, the first part is the introduction. The second part is the literature review. Thethird part is case description. In this part, we describe and analyze the company’sfinancial conditions, operation ability and governance structure, and introduces thestrategy of "technology support enterprise". The fourth part is the case analysis, thispart is the core part of the paper. In this part, we analyzes the technology capitalizationpath of Hisense, the proportion and trend of capital of technology, reveals the principleof technology capital creating profits, and analyze the contribution to profits fromqualitative and quantitative aspects. The fifth part is summarized, the article points outthe deficiencies, and according to the problems found in research put forward somesuggestions.This research results can be attributed to the following:(1) Technology as one of the major factors of the enterprise, if wanted to becomecapital, must go through certain path. That is: put the technology into enterpriseproduction process, through the production processing form corresponding technicalproducts, namely high technical content of artificial products, artificial files, and thespecial behavior; In the economic process, through the market exchange, the aboveitem to be other enterprise organizations purchase, for the original enterprise to theother resources.(2)Hisense’s technology capital to total assets to the total is continuous decline.Along with the development of the technology level, Hisense’s technology hasexperienced a process from scarce to the general, in this process, the technology forprofit contribution gradually reduce, thus investors and producers of technologyinvestment preferences also have been declining.(3)In the enterprise, the technology of the contribution of capital profits mainlyembodied in two aspects: one is to enhance enterprise’s sales income, the other is toreduce the cost of the business. Through to the financial data Hisense appliancesqualitative and quantitative analysis, we draw the conclusion, technology capital ofHisense electrical brought extra yield.(4)Technology capital can bring the strategic advantage to enterprise. The strategic advantage usually appears as the enterprise’s core technology. Technologycapital strategic advantage lies in technology capital can with less cost to create morevalue of the product or service, consistently get excess profits and the value added,thus win favorable competitive advantages and market position.