Research On Business Strategy Of Foxconn Group

As the leading company in electronic manufacturing industry,Foxconn group is the top level company in terms of its business scale and successful customer OEM services.Over the time with rapid changes of electronic manufacturing environment,the supply chain situation and competition became tough and more critical and even caused the survival issues for manufactures.All these situation may drive the company to consider its business strategy as the most important factor of its decisions,since it leads to the direction to the whole enterprise.The reasonable business strategy is not only the valued decision to a company,but also the changeable solution which should be adjusted based on any other factors changes.Over the past years,Foxconn's main business focused on consumer electronics manufacturing,such single business model drove its business strategy to the lower cost competition strength.This strategy brought about huge sales opportunity from 2011 to 2017.During this period,Foxconn annual export value achieved hundreds of billions of dollars,which also pushed company scales developed rapidly.As a result,Foxconn now is a super big company now.However,since the electronics industry always keeps changing and the new products launch quickly,Foxconn is facing serious competition and cost pressure.Although Foxconn was listed as top one company in this field since 2009,its profit space kept shrinking by end customer and the consigned suppliers,and Foxconn lost its negation power with negative business situation.Meanwhile,the labor cost keeps raising up in recent years which increased Foxconn management cost a lot,which was really a burden for company to keep the lower cost competition strategy,company relocated the manufacturing factories didn't help a lot to solve this issue.Such non-continuative strategy couldn't support company's long term development,so multi-industries business might be the option.This paper makes detailed analysis for Foxconn internal and external environment,its strength and weakness by using PEST and Porter Five Forces tools,then takes another two top level similar manufacturing companies(Singapore Flex and America Jabil)as the reference to seek for long term business strategy.In order to solve Foxconn current problems,Foxconn could change the strategy to diversified industries management and start to develop other industries business besides of electronic OEM.With this new management strategy,company should explore high profit industries such as medical and AI industries,improving company automatic manufacturing level,centralize the company sourcing to reduce the labor and purchasing total cost.Regarding current main electronic OEM business,since it relates company main resources,equipment and employees,it is better to regard it as the resource exchange from OEM to new brand development with strategy cooperation partner so that company could maximize its best resources performance.In addition,the new management strategy requires other company function adjustment such as organization chart,human resources policy and company culture promotion,etc.