Connotation and significance of enterprise transformation and upgrading

In order to adapt to the pace of reform and further realize the transition from planned economy to market economy, the original state-owned enterprises to joint-stock enterprises, which is the enterprise transformation and upgrading. Enterprise transformation refers to the overall transformation of the enterprise's long-term business direction, operation mode and its corresponding organization and resource allocation, which is the process of reshaping the enterprise's competitive advantages, enhancing the social value, and achieving a new enterprise form. At present, the transformation of most enterprises in China mainly belongs to the strategic transformation of enterprises.

Enterprises make the strategic decision to transform, rooted in its profound motivation. Enterprises are often due to their own competitiveness in the industry in which they are located in the decline of competitive advantage, prompting enterprises through organizational and other changes to enhance the ability of enterprises in the industry;

Or due to the decline of the industry in which they are located in the enterprise development prospects are bleak, forcing enterprises have to take the initiative or passive strategy of industrial transfer, to seek a new point of economic growth, so that the enterprise to obtain a new vitality. This kind of inter-industry transfer, may be the enterprise to retain the business of the original industry, the implementation of diversification strategy may also be completely out of the original industry, all into the new industry.

Expanded:

Drivers of Business Transformation and Upgrading:

1. New Paths to Profitability: The transformation of many companies in the electronics, automotive and chemical industries is For this reason, in the market share and company size has reached a certain level, the company found its profit return, stock value is not satisfactory. These companies, often, choose to shed low-cost products in favor of innovative, differentiated products or to focus on certain fast-growing markets.

2. Responding to market changes: With the reversal of supply and demand in the market, the entry of a large number of foreign giants into the market or the emergence of new business models, companies inevitably have to join in the fierce cost competition, and at the same time have to differentiate their products based on a clear delineation of customer needs. This is more common in the retail and intermediary services industries.

3, mergers and acquisitions and reorganization: mergers and acquisitions and reorganization of the entire company's operations to achieve a smooth grind, is a very challenging work. Once the implementation of poor, often appear "institutional paralysis", so that valuable customers and good employees to lose trust and patience. At this point, it is necessary to implement organizational redesign and business process re-engineering.

4, enhance the vitality of the enterprise: many small and medium-sized enterprises will encounter such a situation: although the senior management constantly emphasize the new vision, but always stay in the language, can not be transformed into practical action. How to make the enterprise's strategy in-depth, to retain the best talent, has become an important part of the transformation of these enterprises.

5. Fighting for survival: This sad situation is not uncommon, especially in China, where many companies are burdened with high levels of debt. How to find a way out between the long-term development plan of the enterprise and the immediate need for profitability has become an urgent task for them to carry the water.

Baidu Encyclopedia-Enterprise Transformation

Baidu Encyclopedia-Enterprise Transformation and Upgrading