Business Transformation Planning — A Case Study of G Company

• Main Authors: Chun-HsiungChiu, 邱俊雄
• Other Authors: Ming-Long Wang
• Format: Others
• Language: zh-TW
• Published: 2016
• Online Access: http://ndltd.ncl.edu.tw/handle/75a22s

碩士 === 國立成功大學 === 高階管理碩士在職專班(EMBA) === 104 === SUMMARY The rapid development in technology and market condition in 21th century has made adaptation a requirement for businesses to profit, hence transitions of enterprise have become one major way to boost a company’s competitive edge and maintain sustainable growth. Successful transition can grant an enterprise new advantages in competitions and improve market share; yet the process of transition and the conditions followed after initial transition are often difficult to be planned and executed and failed market analysis and bad market forecasting can easily result in failure in entrepreneurial transition or the fiasco of the company. Companies which seek transition will have immediate challenges such as technical requirement, allocation of resources and fund, adjustment and shakeups among human resources, re-defining company’s position in a market, and other serious challenges. The analysis and calculation before transition start usually are responsible for the success or failure entrepreneurial transitions hence an accurate market prediction and a solid decision making process are very important for companies who seek change. This research will primarily focus on the transition strategy for Biotech firms and use company G as subject of our case study. The research will also analyze company data acquired through our research to offer practical help for future bio-tech firms which seek smooth and successful traditions. INTRODUCTION The survival of enterprise and corporation heavily relies on being able to adapt according to the change in market conditions and era; and being willing to learn in a long term. Only companies that are willing to continue to learn and develop can maintain a perpetual survival and growth. The success of business transitions come from transition management, which means not just “what to be changed” but also “how to make change happen”. After the initial honeymoon period, decline in revenue is almost inevitable for any enterprise and company unless it is willing and able to create new opportunity for renewed growth; and being able to identify new growth opportunities adds life span of a business. Most of companies will face bottleneck in growth when facing the cruel and unpredictable challenges from the free market, but why some companies can successful transform themselves and maintain perpetual growth while some companies fail to adapt? MATERIALS AND METHODS This study, through collecting text information, summarizing and comparing available information, and the personal experience of the researcher in related fields, seeks to understand the prediction, analyzation and execution process during the initial stages of transition and the post transition stage, as well as how companies take advantage of transitions to acquire new market standing, new market share, improved company performance and lowered management cost in order to help the business to maintain new advantages while keep the existing ones. Our information shows that the market condition has been becoming more and more critical to biotech firms in Taiwan; and it is important for biotech firms in Taiwan to be able to recognize the slightest change in market conditions to avoid strategic error and business loss. RESULTS AND DISCUSSION The studied company is one of the oldest biotech firm in Taiwan which has had a history of nearly half a century. Many major companies will hit a development celling at some point and company G is no exception. In 1969 the company was a proxy for Japanese pharmaceutical companies, at the time the competitions in both Japanese and Taiwanese pharmaceutical industries were rapidly becoming intense and the company felt the pressure from competitors hence it began to look for alternatives. The company saw the trend that functional/sport drinks were on the rise, hence in 1971 the company began its first major transition to functional drink market; the company’s major revenue has relied on selling functional and sport drink for the next three decades, and such strategy was finally halted because new comers entered with similar products and much lower unit prices. In 1991, the company underwent its second major transition and introduced a new biotech center. The biotech center devoted most of its effort in developing and manufacturing biotechnologies and health products, yet because the company lacked professional sales and market experts in the biotech field, the company revenue stagnated and the company initiated its 3rd transition to become a direct selling company and build an independent supply chain to manufacture health products and other diet-related medical tablets. In 2010, this country had its 4th major transition in management level, which aimed to introduce young and innovative business leaders to revitalize the company and provide customers a fresh, renewed image. CONCLUSION Despite early success, 25 years after foundation, the company was trapped in a trend of decline in earnings per share, after 30 years after the establishment of the firm it experienced losses in revenue in three consecutive years. The company has experienced 4 major transitions in order to break development bottleneck. In year 2009, the company’s stock price per share as NTD 14, but by the end of June, 2016, the price has grown 13 times and is now 210 NTD per share. Company G has been able to confront challenges from newcomers by correctly analyzing market condition and making necessary adjustment amid operational difficulties; hence the ultimate result of its 4 major transitions was a grandiose success. The key to successful transitions for biotech firms is to carry out the execution of transition by professional teams and accumulate duplicable experience in transition. Because success transitions are uncommon in the biotech industry, biotech firms must be ready for the worst case scenario in order to calmly face unexpected circumstances and increase the probability of a successful transition. This case study should provide a valuable analysis that can serve as a reference for future biotech firms’ transition strategy and evaluation processes before transition taking place in order to improve the success rate of business traditions.