;This research begins with an UPS industry analysis on its nature, current situation and future development in China, followed by an in-depth analysis of the Taiwanese-funded Company A on its organizational structure and business model.
The researcher analyzes the competition of the UPS industry with the strategy group analysis, and then conducts an S.W.O.T. analysis on Company A. The key success factors are discovered and suggestions are made for Company A and the general UPS industry.
The company in study, Company A, is a Taiwanese-funded enterprise. Its mother company, a listed company in Taiwan with great capacity in research, development and manufacturing, is a benchmark company in the industry. Its intelligent, highly-reliable UPS model has been popularly marketed globally. With its limited resource and capacity in China, Company A has developed over a decade of time complete market lines and an image of superb quality. With its own market lines and the local dealers, its market covers 31 provinces and 100 cities throughout China. In such a fiercely competitive market of China, its revenue increases every year and averages a 45% increment annually. Company A has grown from single-product to become a multi-product manufacturer and it’s working its way to the goal of becoming a first-rank brand-name enterprise worldwide.
UPS is a matured industry and has slowed down on its growth and technological improvement, which then leads to ever-increasing intense competition. There are three strategy groups: foreign investments, Taiwanese investments and domestic Chinese investments. Foreign investments are mostly well-known international enterprises rich in resources and capacities, holding complete product lines, producing good quality products, and thus creating diversity with its R&D technology, quality and innovation. They focus on the high-end product market and establish high entry barriers for competition, and thus receive high profit. Their weaknesses are high production cost and poor relation with the local area. The domestic Chinese investments were developed at a later time, limited by resources and capacities, and are weak on R&D techniques, capital, human resource and product quality. Their strength is the cost-leadership strategy combined with good local relations, and they focus on the low-end product market. Taiwanese investments are limited in resources, and their three strategies are cost leadership, differentiation and focus, varying in accordance with the available resources and capacity. Most Taiwanese investments compete in the low-end product market price war with better quality product then their Chinese opponents, using the cost-leadership strategy; yet the price competition leaves practically no profit and can not last long. Knowing that, Company A chooses the focus and differentiation strategies and concentrates on high-end products. It also devotes to R&D and innovation and continues to market new product models with larger capacity, high-end powerful products with superb quality and total solutions. Furthermore, Company A continues to increase market diversity by diversifying product functions and personalizing services so as to compete with the foreign investments at the high-end product market. These are the factors that contribute to the continual success and high annual growth of Company A in the ruthless competition of the UPS industry.
This research concludes the key success factors of Company A as strong R&D, excellent production skills and flexibility in manufacturing, marketing platform that spreads across China, and the customer-oriented flexible dynamic logistics. This research then makes three suggestions for the industry: to adjust sales strategy in accordance with the change of the competition scale of the market, to change form single-product to total solutions, and to transform towards professionalized service.