Faced with the multiple challenges brought by the current industrial transformation and market demand changes, sewing machinery trading enterprises have continuously innovated and attempted in their business models and asset mergers and acquisitions, from competition to cooperation. If the trial integration of Hangzhou Haicheng in 2010 opened the curtain for mergers and acquisitions in the industry"s commercial and trade sectors, then the successful alliance of Heli Chengda is a "re start" of the commercial and trade restructuring model.
After the successful merger and restructuring of Hangzhou Haicheng Clothing Equipment Co., Ltd., at the end of last year, Zhongfu Xincheng Clothing Equipment Co., Ltd. and Beijing Fangcheng Tongli Clothing Equipment Co., Ltd., two commercial enterprises, formed Beijing Heli Chengda Machinery Equipment Co., Ltd., completing the second complete restructuring in the industry"s commercial and trade field.
At present, Heli Chengda Company has been established for nearly half a year. What changes has the restructuring brought to the enterprise, and what is the effect of the restructuring on the operation of the enterprise? With questions in mind, the reporter came to Heli Chengda Company to conduct an interview and investigation on the restructuring situation.
Zhang Xiangmin, General Manager of Heli Chengda, told reporters that in the six months since the restructuring, the new company has achieved far more than expected results, with equipment sales doubling the total sales of the previous two companies during the same period. Excluding favorable factors such as peak season, the direct growth benefits brought by the restructuring have exceeded the industry average.
Strong alliance waiting to break through
On the morning of April 28, 2013, technicians from a sister company in Japan were explaining and training a new product at Beijing Heli Chengda Machinery Equipment Co., Ltd. Except for the employees who participated in the training, other staff members were busy answering and recording business consultation calls, and the company was busy yet orderly.
From competition to cooperation, looking at the results over the past few months, the restructuring decision of the two companies was correct, "Zhang Xiangmin told reporters. The reason for the cooperation between the two companies was influenced by Hangzhou Haicheng Company, as they were familiar with each other and had an understanding of the various advantages brought about by Haicheng"s restructuring.
At that time, Zhongfu Xincheng and Fangcheng Tongli were in a competitive relationship, belonging to brothers and heavy machinery agents respectively. Often customers collide with orders, which is a headache. It is difficult to ensure profits under competitive pressure. As the market becomes increasingly difficult to operate, in a sense, this problem has become a bottleneck for the development of enterprises. "Cheng Lianchun, Chairman of Heli Chengda, said that he really hoped to solve this problem at that time. Taking this as an opportunity, both sides have strengthened communication and exchange. Starting from October 2012, both parties began to work on restructuring matters.
After more than a month of preparation, at the end of 2012, the two companies cancelled their independent operations and jointly established Beijing Heli Chengda Machinery Equipment Co., Ltd. The new company"s chairman was jointly appointed by Cheng Lianchun and Wei Ning, and the general manager of Zhongfu Xincheng was appointed by Zhang Xiangmin.
The road to restructuring is bright and clear
The road to restructuring is not smooth, and the problems brought about by the alliance between the two companies have emerged. Wei Ning said, "In the early stage of the restructuring, our main task was to solve various problems that we could foresee and encountered in practice one by one, so as to achieve the smooth development of the new company.
The primary issue is the establishment of the restructured enterprise mechanism. Multi head management is obviously not conducive to the development of the enterprise. In the early stage of the restructuring, the two companies agreed that the new enterprise team would be led by Zhongfu Xincheng and assisted by Fangcheng. At the same time, both parties agreed that only sold equipment outside of inventory would be considered assets, thus clarifying the scope of enterprise assets
Secondly, can the businesses of the two companies be restructured. Although the customer groups of both parties overlap, there are differences in major business aspects such as agency brands, subordinate secondary agents, sales channels, and service models. In response to this issue, the new company will communicate with strategic partners one by one, coordinate and optimize overlapping channels, cancel duplicate resources, and achieve optimal allocation.
The third is personnel restructuring. If the personnel of the two companies cannot be reorganized, it will be very detrimental to business development, which was the main problem at that time. The new company adheres to the policy of "being strict with oneself and lenient with others", breaks down and reorganizes the existing team, encourages the new team to carry out business, learns from each other"s strengths and weaknesses in the process, complements each other"s advantages, and timely summarizes. At the same time, establish a strict reward and punishment mechanism to maximize employee motivation and recognize their efforts.
While undergoing internal adjustments, the new company also faces external pressure. Zhang Xiangmin said, "Heavy Machinery and Brother are competitors. After our two companies are restructured, the agency rights of the two major brands will be transferred to Heli Chengda. Will they have any concerns? During the restructuring process, the vice president of Heavy Machinery Company and the chairman of Brother Company personally came to understand the situation. We candidly conveyed our development ideas and practices to them to maintain their confidence. Through communication, both major suppliers believe that cooperation is beneficial and a strong alliance. In the end, they both gave their support.
The effect far exceeded expectations
By continuously solving problems and overcoming bottlenecks, the new company gradually enters a better stage in the process of integration. According to statistical data, from January to April, the sales volume of medium and heavy machinery for proxy brands was four times that of the same period last year, with a total shipment amount of 4 million yuan in April alone; Brother"s sales doubled compared to the same period last year; Silver Arrow has grown by over 30%. Conservatively estimated, the order has been extended until June of this year.
When it comes to the results achieved after the restructuring, Zhang Xiangmin is like a family heirloom, saying that "achievements far exceed sales performance.
He said that firstly, his own software and hardware resources have been strengthened, forming a resource advantage. After the restructuring of the two assets, the company"s cash flow has become more abundant and smooth, and its ability to resist risks has doubled; Channel development, optimization, and restructuring have led to the continuous enhancement of secondary and tertiary agent and distributor resources, as well as an increase in coverage areas; The company"s employees have formed a positive atmosphere of mutual motivation, personnel restructuring has been smooth, and team cohesion and combat effectiveness have been greatly improved; The operating costs have been significantly reduced, and expenses such as warehouse and office land have been effectively controlled.
Secondly, the relationships between upstream manufacturers in the industrial chain have changed, forming a scale advantage. After the restructuring, the scale of the new company has been expanded, and the importance of upstream suppliers has increased accordingly. Enterprises such as Heavy Machinery and Brother come to the company to organize technical exchanges, new product training, and business guidance at least twice a month. Many manufacturing companies in the industry actively come to negotiate business and hope to achieve cooperation. Zhang Xiangmin candidly stated, "After the restructuring, we have more confidence in negotiating prices and support with suppliers, and our positions have begun to change. In addition, regarding issues such as controlling the source of goods and the ownership of secondary and tertiary agents, suppliers have already started to govern and adjust according to our requirements.
Thirdly, downstream of the industrial chain, the customer base has significantly expanded, forming a brand advantage. Previously, the two companies had a single brand agency, and the products required for the customer"s production line would involve two or even multiple distributors at the same time, which would be very troublesome in terms of sales and service. However, after the restructuring, we can select and configure complete sets of products from the brands in our hands for sale. Customers generally find this very convenient, and the configuration plan can be optimized, which is the most recognized aspect by customers. At the same time, a large number of potential customers and even downstream leading enterprises have strengthened their cooperation intentions and continuously signed orders, with an increase in large orders
Fourthly, the most obvious benefit of shifting from competition to cooperation is the avoidance of vicious competition. Restructuring cannot achieve high profits because the market is transparent and competitive pressure exists. But after the restructuring, a relatively reasonable profit margin can be reserved, and there is more confidence in negotiating with customers.
Yang Xiaojing, Secretary General of the Association and First Deputy Director of the Association"s Commerce and Trade Commission, stated in an interview that summarizing the two reorganizations, it is not difficult to find that shifting from competition to cooperation not only effectively solves the problems and constraints faced by enterprises, but also achieves significant development and improvement of enterprises after resource integration. The practice and experimentation of the commercial restructuring model by Heli Chengda and Hangzhou Haicheng undoubtedly provide valuable experience and reference for the transformation and upgrading direction of commercial enterprises in various industries.
Secretary General Yang also emphasized that at the just concluded Third Session of the Ninth Board of Directors, Chairman He Ye proposed to "seek new driving forces for industry development" and pointed out that mergers and acquisitions will become one of the "new driving forces" to promote industry development. Facing the new challenges brought by current market competition, how to closely follow the development trend of the industry, form its own competitiveness, and achieve new leaps through mergers and acquisitions, strong alliances, competitive cooperation, and other means will become one of the efforts of the vast number of commercial and trade enterprises to "develop new driving forces".