Discussion On The Strategic Transformation Of The F-company

In the past couple years,World economy struggled to stay up.Under such macro-economic situation,China manufacturing sector suffered more in export and domestic market.Over-capacity became the main issue in nearly all domestic industries.As China's only publically listed heat treat enterprise-Company F had an under-par performance in ROI and share price,largely because heat treat market shrank noticeably and company growth reached bottleneck even it is still China's leading heat treat company.Therefore,it is essential for Company F to develop new enterprise transformation strategies so to reshape its competitive advantages and to improve its market value.This paper applies case study methodology and focuses on Company F's transformation strategy development,including the phases of strategic transformation options,transformation roadmap design,strategy execution,risk assessment,and post-transformation evaluation.First,the author uses vertical integration and horizontal growth methods to study the options of Company F's transformation in heat treat industry.By conducting enterprise value-chain analysis,Company's roadmap was developed in the direction of vertical integration through acquisitions and self-expansion to shift company's business structure from heat treat equipment manufacturing centered to heat treat service centered.Second,by applying Porter's five-force model and other enterprise value-improvement methodologies,Company F's transformation strategy is developed as acquiring other advanced heat treat technologies to enhance company's technology leadership so to improve its core competiveness.Third,its transformation is designed in combination of acquiring technology based heat treat equipment manufacturers and acquiring heat treat service companies,which should improve Company F's profit generating capability,financing capacity as well as R&D innovation capability with the ultimate goal of retaining and improving company's future market value.Then the author further studied the execution process of Company F's transformation by comparing other similar real-world M&A cases,analyzing company F's competence,selecting target companies,studying target companies' businessmodel and valuation,and acquiring the target companies.Last but not the least,the author conducted economic evaluation,risk assessment,and follow-up study to Company F's strategic transformation process.