HTXL's Profit Model Improvement Study

The wire and cable industry(Including the optical fiber and cable manufacturing)is an important basic industry to maintain and ensure the safety and the efficient operation of the modern economic society.The wire and cable products whose application is throughout the national economy have been regarded as the key to ensuring the normal operation of the society.China is a country with the largest production capacity of wire and cable in the world.However,the overall strength of the domestic wire and cable industry is great but not strong,and the overall profitability of the industry is poor because of the low industry concentration,weak innovation foundation and irrational industrial structure.In the current economic situation in the new norm,the long-term deep-seated contradictions in the industry are becoming more and more obvious such as overcapacity,supply imbalance,an increase of loss.There is a comprehensive reshuffle in the industry.In this paper,HTXL company with a fifty-year history of wire and cable manufacturing is taken as the research object.On the basis of analysis of the status and trend of the industry,the profit model of the enterprise is analyzed deeply to put forward some countermeasures and suggestions on the improvement of the profitability.If so,the enterprise can survive and grow better in the complex and difficult environment.There is important practical significance.In the paper,through literature review and theoretical analysis,with the combination of the theories of Adrian J.Slywotzky and Li Xuesi,the profit model of HTXL company is analyzed and studied in case study method,quantitative analysis method and comparative analysis method.It is thought that there are some problems such as simple customer choice,inflexible value-obtaining means,weak profit protection ability,and unreasonable business scope.Then from strategic elements of the profit model of HTXL company,an improvement program is put forward,including the combination among the customer solution model,the value chain regroup mode and the professional profit model,and the specific implementation ways.For example,by means of the use of strengths in talent,technology and market,intensify the development of high margin core products-special optical fiber cable.Extend the industrial chain upstream and reduce procurement costs to improve the competitiveness of the company.By taking advantage of the recession of economy,and the asset price at historic lows,merge and acquire peer enterprises,and build production bases in the Midwest China independently to achieve low-cost expansion.