Research On The Innovation Of Business Model Of Light Yilan Group Co., Ltd

As an enterprise solely funded by the state, Zhongqing Yilan (Group) Co., Ltd. (Zhongqing Yilan henceforth), has been operating in the red for 18 years with a total loss of over 2 billion RMB. The reform and innovation of its operation mode has to take its state ownership into consideration.The SOE (State-owned enterprise) reform was revisited in the 18th CPC National Congress in 2012, and the National People’s Congress in 2015 further defined that the SOE reform should head for the ECOS (Enterprises of the Composite-Ownership System). It is well-grounded to infer that the purpose of the reform is to restore the enterprises’ role as the main body of the market and enable the enterprises to adopt efficient operation mode to match the market.The research object of this paper, Zhongqing Yilan, is a wholly-owned subsidiary of the state-owned Yuntianhua Group Co., Ltd. It suffered an annual loss of about 200 million RMB during 2011 and 2013 and was completely dependent on its parent group. Such enterprises are not rare in China. Therefore, the research on Zhongqing Yilan has implications on other Chinese enterprises in similar conditions in terms of how to improve operation efficiencies and reduce the loss of state property under the present SOE reform policies. It is worth mentioning that such cases can be found in China only and they are rare in Harvard MBA case base.Based on years of follow-up and specific statistical data of Zhongqing Yilan, the author presented the corporation the proposals on its operation reform and innovation, which were adopted in 2014 and achieved satisfactory effects.This paper presents the statistical data of Zhongqing Yilan, analysis of the data, proposals on its reform and innovation and the application of the proposals, mainly based on its phosphate branch. Thorough and detailed description and analysis of the effective innovation measures in the adopted proposals are provided. It is evidenced that state-owned enterprises can improve their efficiencies of utilizing resources and secure their competitive position by employing effective operation mode and stimulating their staff’s initiative.Presently, state-owned enterprises still play a dominant role in the market in China. It is hoped that the effective reform and innovation measures in the research such as business restructuring and multi-mode of operation could shed light on the ECOS studies.