Zongshen
A. Describe the significant role the value chain played in the growth and development of the Zongshen Group: * Identify two elements from Porter’s Five Forces Model, determinants of buyer power and suppler power, to illustrate the problems the group entered with suppliers during the early years of China’s privatization policy.
In early history of Zongshen group, the state-owned enterprises (SOEs) played a critical role as dominant suppliers in the motorcycle industries. The SOEs have this power is because prior to 1992, the Chinese government did not allow people to launch private companies throughout the country. All of buly integrating them into the production. This change led Zongshen to improve its capabilities and to become a parts manufacturer.
Manufacturing parts and using parts that it produced to assemble engines were a new objective of Zongshen. In order to improving quality and reliability of parts that it produced as well as to reduce production costs, Zongshen started applying advanced technology tools such as computer aided design and computer aided manufacturing to its product development. Besides, Zongshen also sought manufacturing consultant from former Honda employees and visited its competitors and prospective partners like Harley-Davidson in the United State. As a result, Zongshen was stood out in the common manufacturers throughout the country.
Despite of the ability of producing parts in house; Zongshen still needed to purchase materials for its manufacturing. Zou understood that it would be a problem if Zongshen relied heavily on a small number of suppliers. Therefore, Zongshen worked with multiple suppliers for each part so that it could get competitive pricing. Consequently, it led to significantly reduce influences of suppliers.
* Identify and analyze the factors that now make Zongshen’s value chain is now a source of innovation.
There are few factors that lead Zongshen’s value chain to become a source of
In early history of Zongshen group, the state-owned enterprises (SOEs) played a critical role as dominant suppliers in the motorcycle industries. The SOEs have this power is because prior to 1992, the Chinese government did not allow people to launch private companies throughout the country. All of buly integrating them into the production. This change led Zongshen to improve its capabilities and to become a parts manufacturer.
Manufacturing parts and using parts that it produced to assemble engines were a new objective of Zongshen. In order to improving quality and reliability of parts that it produced as well as to reduce production costs, Zongshen started applying advanced technology tools such as computer aided design and computer aided manufacturing to its product development. Besides, Zongshen also sought manufacturing consultant from former Honda employees and visited its competitors and prospective partners like Harley-Davidson in the United State. As a result, Zongshen was stood out in the common manufacturers throughout the country.
Despite of the ability of producing parts in house; Zongshen still needed to purchase materials for its manufacturing. Zou understood that it would be a problem if Zongshen relied heavily on a small number of suppliers. Therefore, Zongshen worked with multiple suppliers for each part so that it could get competitive pricing. Consequently, it led to significantly reduce influences of suppliers.
* Identify and analyze the factors that now make Zongshen’s value chain is now a source of innovation.
There are few factors that lead Zongshen’s value chain to become a source of