Study On Profit Ability Model Of Chinese Manufacturing Industry Based On Global Value Chain

Withthe process of globalizationaccelerating, Chinese manufacturing has gradually involved in the supply chain and the value chain in the world, who relied on cheap labor, advantages of land cost and broad domestic and other advantages to attract many foreign and domestic manufacturingleaders to build up factories, which made her be the world’s biggest manufacturing country. However,becoming a manufacturing country not a manufacturing power, not only related to the short time for the Chinese manufacturing to transition, but also concerned with the development of China’s manufacturing industry profit model. Being embedded in the global value chain process, Chinese manufacturing industry started from the low-tech, low profitability links which was lack of strong profitabilitydue to lack of core patents and technology. Therefore, it becomes a strong manufacturing critical path to clear profitability and find effectively enhance the profitability model.The first part of this article shown the evolution of global value chains and described the global value chain characteristics and profit marginsbriefly, which lead to cause of the small profit margins and relatively weak profitability when China’s manufacturing industry went through the globalization process and embedded in the process of small profit margins and relatively weak value chain. Meanwhile on this basis of the profitability and discussion of the core ability from home and abroad, this article makes the redefinition of manufacturing profitability, and according to the impact of manufacturing enterprises, of the divided the profitability into two aspects---research and development abilities and brand ability.On the basis of redefines of research and development capabilities and brand ability, this article search and verify quantifiable data representative to interpret R&D ability and brand ability, whose data source is limited to2012EU Corporate R&D Investment Scoreboard, Top100Global Brand Value in2011and Top100Chinese Enterprises Brand Value released by Interbrand, which determines the manufacturing joint research and development capabilities and brand ability by use of both of quantitative and qualitative methods.With the use of SPSS in the third part, the article explores and builds the functional relationship between corporate profitability, which regards R&D investment and brand value of26furniture manufacturing business representative as an argument. And it passes through the consistency test. According to it, makes further analysis including the contribution margin analysis, the contribution scale analysis, contribution elastic analysis, the marginal rate of substitution analysis, the elasticity of substitution analysis and profitability growth equation analysis.In the following, makes comparison between the sample data with the Chinese manufacturing enterprise research and development ability and brand ability. In detail, explores the difference of R&D ability in R&D investment, number of R&D staffs, output of R&D to analyze the present situation of research and trend of R&D ability in Chinese manufacturing industry, while the difference of brand ability from the aspects of brand value and brand image to analyze brand status and trends in Chinese manufacturing industry.In the last part, based on the research and development ability and the brand ability, the path to increase China’s manufacturing industry profitability is divided into three types. The first one is promoting research and development ability to be OEM, which has strong research and development abilities and quantity of patents, Samsung, for example. The second is enhancing brand ability to be OBM, which creates well-known manufacturing brand or sets up a good brand image, Galanz, for example, who started from OEM and then accumulated their own advantages of technology and efficient brand to embrace successful transition. This requires that companies not only have excellent market view and good service concept. The third is increasing research and development abilities and brand ability to implement SCM, which is fully integrated into the global value chain and play an important role in it, Huawei, for example.