Antong Company is a special machinery manufacturing company. The company has 10 professional factories, which are distributed in 10 provinces and cities across the country, with assets of 2 billion and 80,000 employees, including 200 employees from the headquarters. More than 60% of the technical managers in this department are basically specialized in special machinery. Products produced by affiliated enterprises of the company are purchased by relevant government departments and supplied to the national market.
Since the reform and opening up, the production and operation of Antong Company has shown a good situation. In the general downturn of machinery industry, Antong Company still insists that all factories have relatively saturated products. However, after entering the 1990s, the domestic market began to show a trend of oversupply. The person in charge of relevant government departments has revealed that normal production and operation can still be maintained without buying Antong's products for three years. Faced with this new situation, leaders of Antong Company held two consecutive meetings to analyze the situation and study countermeasures.
The first meeting was devoted to analyzing the situation. General manager Liu presided over the meeting. He said that if Antong Company wants to maintain a good development trend and obtain stable benefits, it must first analyze and recognize the situation before it can adapt to the situation. Our products are saturated in the domestic market. Without the intervention of government departments and centralized procurement, our production capacity will be reduced by 30% or even more at once. We should have a clear understanding of this. Deputy general manager Li, who is in charge of the operation, said that since the reform and opening up, the profit rate of the whole company has reached about 8%, which is higher than the average level of the national machinery industry. But now the products are single, and there is a trend of oversupply. It is difficult to maintain this level of development in the future. At present, the company's headquarters and factories are abundant in funds and personnel, and new choices should be made. Deputy General Manager Zhao, who is in charge of technical work, said that the products of the head office and factories, especially some products, can basically meet the current demand of the domestic market by introducing foreign advanced technology in recent years. The professional and technical strength of the head office and the factory is very strong. If we don't continue to develop new products, it will be difficult for the industry to develop greatly by relying solely on existing old products, and professionals will also be lost. Other vice presidents also analyzed the situation faced by Antong Company from their own perspectives, and everyone felt that the meeting was timely and necessary.
The second meeting was still presided over by General Manager Liu. He said that our last meeting comprehensively analyzed the situation, which made us all more sober-minded and more consistent in understanding. This is why the head office must study its own development strategy to adapt to the new situation. Vice President Li, who is in charge of operation, said that we should make full use of surplus personnel and surplus funds, find another way and develop diversified operations. Dare to enter products outside the machinery industry. Isn't the country advocating the development of the tertiary industry now? We should make use of the preferential policies of the state, carry out diversified operations and achieve better economic benefits. Zhao Zong, who is in charge of technology, said that although Antong's products have been upgraded by introducing foreign advanced technology, there is still a considerable gap compared with the international advanced level. Now we should make full use of technical strength and capital, further introduce technology, develop new products, make some reserves for the domestic market to meet the needs of the future market, and at the same time try our best to sell our products to the international market. Other bosses also agree that Antong Company must develop and cannot stand still. Everyone thinks that Antong Company is a highly specialized enterprise. Although the main products are in the trend of oversupply, there is still a relatively stable market now, especially in the future. This main business must not be relaxed, but it is impossible to get rich by this main business alone. We should constantly explore new business areas and carry out diversified operations. Based on this understanding, Antong Company put forward a new business strategy to adapt to the market: "One industry is the mainstay, diversified business, based on this industry, facing the whole country and the world".
The two meetings unified their thinking and put forward new business strategies. All departments at the headquarters take active actions to study the future development direction and goals. At this time, Antong Company heard two news: First, a hotel in Shandong Province is under construction and will be shut down due to insufficient funds. The hotel is located in the city center with an investment of 654.38 million yuan. It is predicted that the annual profit rate can reach more than 25%, and the investment can be fully recovered in four years. This is a project with less investment and quick results. Second, there is a coal mine with an annual output of 400,000 tons in Liaoning Province, which is raising funds and seeking partners. The mine promises a return on investment of at least 20%. At present, the supply of coal is in short supply, and the market prospect is considerable.
After hearing these two news, the head office sent two teams to Shandong Province and Liaoning Province to understand the situation. A few days later, the two teams returned to the headquarters, confirmed that the two pieces of information were true and reliable, the operators were all state-owned units, and the investment prospects were good. They wrote a request report on investing 500,000 yuan in a hotel in Shandong Province and a coal mine in Liaoning Province respectively. The report for instructions was quickly approved and the funds were quickly drawn. Due to the injection of this fund, hotels in Shandong Province were successfully built and opened in the second year. After the opening of the hotel, the relevant leaders of Antong Company passed by on a business trip and visited the hotel. It seems that this hotel is well run and modern. By the end of the third year, it was reported that hotels in Shandong Province had a loss of 654.38+10,000 yuan and coal mines in Liaoning Province had a loss of 50,000 yuan, and there was no profit to be divided. In the fourth year, the same thing happened. Hotels and coal mines are small losses, and there is no profit to be divided. Antong company is very embarrassed about this and can't think of an effective strategy at once.
1. Is Antong's investment decision correct? If there is a problem, what is the main problem?
2. What countermeasures should Antong Company take for hotels and coal mines?