As brand reshaping and market repositioning work gradually progress, family businesses have begun to focus on extending the industrial chain and expanding strategic cooperation to further consolidate and enhance the company's market position.
After in-depth research and analysis, company executives discovered numerous potential development opportunities within their current industry chain. For example, in the upstream raw material supply chain, direct participation in or controlling stakes in related suppliers can better ensure raw material quality and supply stability. In the downstream sales and service chain, expanding proprietary sales channels and providing value-added services can enhance control over the end market and improve customer satisfaction.
"We must actively extend the industrial chain and achieve coordinated development of upstream and downstream. At the same time, through extensive strategic cooperation, we will integrate resources and enhance the overall competitiveness of the enterprise." The company's leaders clarified the development direction at the high-level meeting.
Therefore, companies began to investigate and evaluate upstream raw material suppliers, looking for suitable partners or acquisition partners. However, in this process, companies faced the challenge of conducting in-depth investigations into suppliers' financial status and operations, as well as valuation and integration risks during the M&A process.
"Establish a professional due diligence team, including financial, legal and industry experts, to conduct a comprehensive and detailed review of potential targets; formulate a comprehensive M&A integration plan, and plan in advance for personnel arrangements, business integration, cultural integration and other aspects." The company's senior management carefully organizes and strives to reduce risks.
At the same time, the company is actively expanding its downstream sales channels, planning to open directly-operated stores and e-commerce platforms. However, it lacks relevant experience in site selection and operation management of directly-operated stores, as well as in setting up and operating e-commerce platforms.
"Introduce management talents with rich retail experience and form a special team to be responsible for the preparation and operation of directly-operated stores; cooperate with professional e-commerce service providers to quickly build an e-commerce platform with complete functions and good user experience." The company makes up for its lack of experience through talent introduction and external cooperation.
In terms of strategic collaboration, companies actively engage in discussions with leading companies, research institutes, and financial institutions in the same industry. However, reaching cooperation intentions and finalizing the details of cooperation agreements are often slow due to diverging interests and unclear cooperation models.
"Deeply understand the needs and expectations of partners, seek common interests, and develop flexible and diverse cooperation models; strengthen communication and consultation, and resolve differences and problems in cooperation through frank exchanges." The company sent an experienced business team to work hard to advance the cooperation process.
In addition, in the process of extending the industrial chain and expanding strategic cooperation, enterprises also face challenges in financial pressure and resource allocation.
"Optimize the financial structure, rationally arrange the use of funds, and raise funds through multiple financing channels; establish a scientific resource assessment and allocation system, and rationally allocate human, material and financial resources based on the importance and development potential of the project." The finance department and the strategic planning department work closely together to ensure resource supply.
After a period of hard work, the company has achieved certain phased results in extending the industrial chain and expanding strategic cooperation, but new problems have also emerged.
For example, after extending the industrial chain, the management complexity of enterprises has increased significantly, and how to achieve efficient cross-departmental collaboration and resource integration has become a top priority; at the same time, cultural conflicts and management differences brought about by strategic cooperation may also affect the effectiveness and continued stability of cooperation.
"Establish a unified information management platform to achieve real-time sharing of data in all links and seamless connection of business processes; strengthen corporate culture construction, promote cultural exchange and integration between the two parties, and create a good atmosphere for cooperation." Corporate senior management solves new problems through management innovation and cultural integration.
In the future, family businesses will continue to face numerous uncertainties in terms of industrial chain expansion and strategic collaboration. For example, changes in market demand may lead to adjustments in industrial chain layout; strategic adjustments by partners may also affect the direction of the partnership.
"Continue to pay attention to market trends and the development trends of partners, establish risk warning mechanisms and response plans; strengthen the construction of our own core capabilities, and improve our voice and dominance in the industrial chain and cooperation." The company's top management is preparing for the future and actively responding to future challenges.
Despite numerous difficulties, the family business firmly believes that by unswervingly promoting the extension of the industrial chain and the expansion of strategic cooperation, it can create a more complete and competitive industrial ecology and achieve leapfrog development of the company.
During the inspection of upstream suppliers, the company found that some suppliers did not meet environmental standards, which may bring reputation risks to the company.
"Before cooperation, we require suppliers to carry out environmental rectification and establish a long-term supervision mechanism; we give priority to suppliers with good environmental records and sustainable development concepts to promote the green development of the entire industrial chain." When selecting suppliers, companies take environmental factors into important consideration.
At the same time, when expanding downstream sales channels, companies found that market demand and consumption habits in different regions vary greatly, which means that the product configuration and marketing strategies of direct-operated stores need to be adapted to local conditions.
"Establish a regional market research mechanism, regularly collect and analyze market data from various regions, and provide directly-operated stores with accurate product and marketing suggestions; grant directly-operated stores a certain degree of independent decision-making power so that they can flexibly adjust their business strategies based on local actual conditions." Through refined management, the company improves the market adaptability of directly-operated stores.
In the course of cooperating with leading companies in the same industry, the company discovered that there were issues regarding intellectual property ownership and confidentiality in the cooperation between the two parties in technology research and development.
"Sign a detailed technical cooperation agreement, clarify the ownership and use rules of intellectual property rights, and establish a strict confidentiality system; set up a dedicated intellectual property management team to be responsible for intellectual property matters in the cooperation." Enterprises ensure the security of intellectual property rights in cooperation by improving legal agreements and management mechanisms.
In addition, during the extension of the industrial chain, companies found that the profitability of some new businesses was lower than expected and needed to be optimized and adjusted.
"Conduct a comprehensive assessment of new businesses, analyze the reasons for poor profitability, and take measures to reduce costs, improve efficiency, or adjust business direction; establish a tracking and evaluation system for new businesses to promptly identify problems and make decision adjustments." Enterprises improve the benefits of extending the industrial chain through dynamic evaluation and optimization.
Although the work of extending the industrial chain and expanding strategic cooperation is full of hardships and challenges, family businesses, with their deep understanding of industrial development and firm strategic determination, continue to explore and move forward, opening up a broader space for the future development of the company.
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