Transformation and Upgrading of Chinese Enterprises

299 Pages·2019·5.025 MB·English

by  Yunshi Mao

Yunshi Mao
Transformation
and Upgrading
of Chinese
Enterprises
Transformation and Upgrading of Chinese
Enterprises
Yunshi Mao
Transformation
and Upgrading of Chinese
Enterprises
123
Higher
Education
Press
YunshiMao
Business School
SunYat-sen University
Guangzhou, China
Translated byYangchunLiuandSidanWu
ISBN978-981-13-1258-8 ISBN978-981-13-1260-1 (eBook)
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Contents
1 The Pressure of Chinese Enterprises’ Transformation and
Upgrading. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 The Bankruptcy of Smart Union Factories and the Pressure
of Chinese Enterprises’ Transformation and Upgrading. . . . . . . . . 1
1.1.1 The Closedown of Smart Union Factories Indicates
the Importance of Transformation and Upgrading . . . . . . 1
1.1.2 Definition of Enterprise Transformation
and Upgrading. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1.3 The Pressure of Chinese Enterprises’ Transformation
and Upgrading Has Long Existed . . . . . . . . . . . . . . . . . . 5
1.2 The Financial Crisis Has Intensified the Pressure for Chinese
Enterprises to Transform and Upgrade. . . . . . . . . . . . . . . . . . . . . 10
1.2.1 China Has Been Affected by the Global Financial
Crisis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.2.2 The Financial Crisis Hit the Export-Oriented Economy
in the Pearl River Delta and Yangtze River Delta
Particularly Hard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.3 Planning for Change in Time of Crisis. . . . . . . . . . . . . . . . . . . . . 13
1.3.1 In Front of Chinese Enterprises Are Three Ways:
Relocating, Upgrading, or Going Out of Business . . . . . . 13
1.3.2 Chinese Enterprises Should Bravely Break Through
in the Crisis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2 ExperiencesofCorporateTransformationandUpgradinginAsian
Emerging Economies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.1 High-LevelDedicatedFoundryRoadofTaiwan’sSemiconductor
Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
v
vi Contents
2.1.1 Five Development Stages of Taiwan’s Semiconductor
Industry. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.1.2 Sources ofCompetitivenessofTaiwan’sSemiconductor
Companies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.1.3 Transformation and Upgrading Process of Taiwanese
Enterprises from Dedicated Foundry to Industrial Chain
Integration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.2 The Realization of Transformation and Upgrading by South
Korean Companies Through Technological Innovation—from
Small Workshops to Conglomerates . . . . . . . . . . . . . . . . . . . . . . 31
2.2.1 Five Phrases of Korean Enterprises’ Transformation
and Upgrading. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.2.2 The Leapfrogging Model of Technology Upgrading:
Introduction ! Imitation ! Improvement !
Innovation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
2.2.3 The Growth Process of Korean Enterprises from Small
Workshops to Large Groups. . . . . . . . . . . . . . . . . . . . . . 36
2.3 Comparison of Enterprise Transformation and Upgrading
in Emerging Economies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
2.3.1 Enterprise Transformation and Upgrading in Taiwan
and South Korea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
2.3.2 Enterprises Should Have the Right Positioning
in the Course of Their Transformation
and Upgrading. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
3 Enterprise Case Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
3.1 Independent Innovation Path of Guangdong Enterprises from
OEM to ODM to OBM: Comparison Between Donlim
and Jasic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
3.1.1 The OEM, ODM, OBM Status of Guangdong
Enterprises and Research on Their Transformation
and Upgrading. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
3.1.2 Definition of OEM and Concepts Related to Its
Transformation and Upgrading . . . . . . . . . . . . . . . . . . . . 50
3.1.3 Transformation and Upgrading Models of OEM
Enterprises. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
3.1.4 Case Enterprises: Donlim Kichen Group Co., Ltd.
and Jasic Technology Co., Ltd.. . . . . . . . . . . . . . . . . . . . 57
3.1.5 Guangdong Donlim Kichen Group Co., Ltd. . . . . . . . . . . 58
3.1.6 Shenzhen Jasic Technology Co., Ltd. . . . . . . . . . . . . . . . 59
3.1.7 Comparison of Basic Information . . . . . . . . . . . . . . . . . . 60
Contents vii
3.1.8 Comparison of the Two Enterprises’ Transformation
and Upgrading Paths . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
3.1.9 Comparison of the Factors Influencing the Two
Enterprises’ Transformation and Upgrading. . . . . . . . . . . 65
3.1.10 Implications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
3.2 Case Two Enterprise Upgrading in the Toy Industry:
Comparisons Between Lung Cheong Toys and
HaYiDai Toys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
3.2.1 Situation Analysis in the Toy Industry . . . . . . . . . . . . . . 93
3.2.2 Case Selection: LungCheong and HaYiDai . . . . . . . . . . . 98
3.2.3 Lung Cheong International Holdings Ltd. . . . . . . . . . . . . 99
3.2.4 HaYiDai Toys Co., Ltd.. . . . . . . . . . . . . . . . . . . . . . . . . 104
3.2.5 Comparison of Basic Information . . . . . . . . . . . . . . . . . . 107
3.2.6 Comparison of Self-Innovation Capacity . . . . . . . . . . . . . 108
3.2.7 Influencing Factors of Self-Innovation of Lung
Cheong and HaYiDai. . . . . . . . . . . . . . . . . . . . . . . . . . . 118
3.2.8 Facts and Discoveries. . . . . . . . . . . . . . . . . . . . . . . . . . . 123
3.3 Upgraded Enterprise in Lighting Industry: NationStar
Optoelectronics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
3.3.1 Company Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
3.3.2 Upgrading Path . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
3.3.3 Company Competence Supports NationStar’s
Upgrading Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
3.3.4 The Industrial Cluster of Enterprises Promotes
the Upgrading of NationStar. . . . . . . . . . . . . . . . . . . . . . 139
3.3.5 NationStar’s Upgrading in Response to the Change
of Market Environment . . . . . . . . . . . . . . . . . . . . . . . . . 142
3.3.6 Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
3.4 Rapid Growth of Taiwan’s Atotech . . . . . . . . . . . . . . . . . . . . . . . 149
3.4.1 Brief Introduction of Atotech . . . . . . . . . . . . . . . . . . . . . 149
3.4.2 Atotech’s Path of Progressive Upgrading. . . . . . . . . . . . . 154
3.4.3 Implications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162
4 Case Analysis of Industrial Regions, Clusters and Parks . . . . . . . . . 163
4.1 High-TechIndustries inShenzhen Characterized by Independent
Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163
4.1.1 Basic Situations and Characteristics of Shenzhen
High-Tech Industries . . . . . . . . . . . . . . . . . . . . . . . . . . . 164
4.1.2 Constraints on Shenzhen’s High-Tech Industry
Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178
4.2 Transformation and Upgrading of Furniture Industrial Cluster
in Dalingshan Town, Dongguan City. . . . . . . . . . . . . . . . . . . . . . 181
viii Contents
4.2.1 Brief Introduction of Dalingshan. . . . . . . . . . . . . . . . . . . 181
4.2.2 Current Situation of the Furniture Industry
in Dalingshan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182
4.2.3 The Furniture Industry Is Facing Challenges
of Transformation and Upgrading . . . . . . . . . . . . . . . . . . 184
4.2.4 Transformation and Upgrading of the Dalingshan
Furniture Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190
4.2.5 Implications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195
5 Case Analysis of Public Technology Platforms . . . . . . . . . . . . . . . . . 197
5.1 High-Tech Industry Development by Taiwan ITRI . . . . . . . . . . . . 197
5.1.1 Background of ITRI. . . . . . . . . . . . . . . . . . . . . . . . . . . . 197
5.1.2 Objectives and Visions of ITRI. . . . . . . . . . . . . . . . . . . . 198
5.1.3 Organizational Structure of ITRI. . . . . . . . . . . . . . . . . . . 198
5.1.4 ITRI’s S&T Projects, Service Revenue, Talent
Cultivation and Patent Application . . . . . . . . . . . . . . . . . 201
5.2 The Operational Model and Characteristics of ITRI . . . . . . . . . . . 204
5.2.1 The Legislation and Commercialized Operation Jointly
Support the Development of ITRI. . . . . . . . . . . . . . . . . . 205
5.2.2 Integration Center Offers Powerful Capabilities
in Integrating Cross-Field Resources . . . . . . . . . . . . . . . . 206
5.2.3 The Open Research System Based on OpenLab
Project. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207
5.2.4 Establishing a Flexible Inflow-and-Outflow Mechanism
for Talents to Cultivate More Innovative Sources. . . . . . . 208
5.3 Development of Taiwan’s Science Parks . . . . . . . . . . . . . . . . . . . 209
5.3.1 From Hsinchu Science Park to Tainan Science Park. . . . . 209
5.3.2 Transformation and Upgrading of Taiwan’s Science
Parks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212
5.4 ITRI Supports the Development of Taiwan’s Science Parks . . . . . 220
5.4.1 ITRI Specialized Incubation Center Can Provide an
Effective Business Incubation Source . . . . . . . . . . . . . . . 220
5.4.2 Establishing Spin-off Companies and Cultivating
Large-Scale Enterprises Through an Intellectual
Property Rights Transfer System. . . . . . . . . . . . . . . . . . . 221
6 Factors that Influence Enterprise Transformation
and Upgrading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223
6.1 Theories About the Influence Factors of Enterprise
Transformation and Upgrading . . . . . . . . . . . . . . . . . . . . . . . . . . 223
6.1.1 EnterpriseTransformationandUpgradingIsInseparable
from Independent Innovation . . . . . . . . . . . . . . . . . . . . . 223
6.1.2 Theoretical Research on the Factors that Influence
Independent Innovation of Enterprises. . . . . . . . . . . . . . . 224
Contents ix
6.1.3 Other Factors that Influence Enterprise Transformation
and Upgrading. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226
6.1.4 Theoretical Framework for Analyzing Influence Factors
of Enterprise Transformation and Upgrading . . . . . . . . . . 227
6.2 Analysis of the Factors that Influence Enterprise Transformation
and Upgrading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227
6.2.1 Cost Comparative Advantage Is Gradually
Disappearing, and Profit Margins Are Shrinking . . . . . . . 227
6.2.2 In the Intense Competition at Home and Abroad,
OBM with Intellectual Property Rights Is the Major
Development Direction of the Transformation and
Upgrading of EEEs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229
6.2.3 The Benefits Are Extremely Unevenly Distributed
and Most of the Profits Go to the Firms at the Upper
Ends of the Industrial Chain. . . . . . . . . . . . . . . . . . . . . . 229
6.2.4 The Inherent Risks of Low-End Manufacturing Are
Becoming Prominent. Enterprises Urgently Need to
Upgrade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230
6.3 Motivation for Enterprise Transformation and Upgrading . . . . . . . 231
6.3.1 Entrepreneurship and Brand Awareness Are the Major
Driving Force Behind Enterprise Transformation
and Upgrading. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231
6.3.2 The Ownership of Key Resources and the Acquisition
of Key Capabilities Constitute the Foundation for
Enterprise Transformation and Upgrading . . . . . . . . . . . . 232
6.3.3 Increasing Consumer Demand at Home Has Provided
Market Support for Enterprises to Establish Their
Own Brands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233
6.3.4 Government Policies Promote and Encourage
Enterprises to Upgrade. . . . . . . . . . . . . . . . . . . . . . . . . . 233
6.3.5 Good Relationship with Cooperative Partners Provides
Technical and Management Reference for Enterprises . . . 234
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 234
7 Measurement Standards and Paths of Enterprise
Transformation and Upgrading . . . . . . . . . . . . . . . . . . . . . . . . . . . . 237
7.1 Theoretical Research on Enterprise Transformation
and Upgrading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 237
7.1.1 Studies on Enterprise Transformation and Upgrading
from thePerspective ofCoreCompetenceandDynamic
Capability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 237
7.1.2 Studies on Enterprise Transformation and Upgrading
from the GVC Perspective . . . . . . . . . . . . . . . . . . . . . . . 238
x Contents
7.2 Measurement Standards of Enterprise Transformation
and Upgrading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241
7.2.1 Improved Product Technological Content and Increased
Value Added . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241
7.2.2 Enhanced Product Function . . . . . . . . . . . . . . . . . . . . . . 241
7.2.3 Developing from OEM to ODM and then to OBM . . . . . 244
7.2.4 Shifting from Single Products to Product Lines, from
Single Businesses to Business Solutions, Leading
to New Products, New Services and Even New
Markets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 245
7.2.5 Developing Strategic Assets and Creative Assets to
Enhance Competitiveness . . . . . . . . . . . . . . . . . . . . . . . . 246
7.3 Paths of Enterprise Upgrading. . . . . . . . . . . . . . . . . . . . . . . . . . . 246
7.3.1 Achieving Overall Transformation and Upgrading
by Recognizing New Features and New Demands
of Traditional Industries and Repositioning Them . . . . . . 247
7.3.2 Achieving Transformation and Upgrading
by Substituting First for Imported Products, then
for Multinational Companies’ Products in China
and in Foreign Markets . . . . . . . . . . . . . . . . . . . . . . . . . 249
7.3.3 CreatingNewProductsandNewDemandsontheBasis
of Blurred Industrial Boundaries and Industry
Convergence, and Achieving Inter-sectoral
Upgrading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251
7.3.4 Removing Barriers to Key Components and Achieving
Overall Upgrading Through Technological
Accumulation and Capability Evolution. . . . . . . . . . . . . . 253
7.3.5 Achieving Upgrading by Increasing Investment
in Production Services and Boosting Value Added. . . . . . 256
7.3.6 Achieving Enterprise Upgrading by Reducing Inputs
and Consumption, Lowering Costs, and Enhancing
Environmental Standards and Value Added . . . . . . . . . . . 256
7.3.7 Achieving Upgrading Through the Establishment
of Strategic Alliances Between Cluster Enterprises
and with Large Enterprises Promoting the Development
of Small Ones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258
7.3.8 A Large Diversity of Upgrading Paths from OEM
to ODM and then to OBM. . . . . . . . . . . . . . . . . . . . . . . 260