Analysis of Wensli silk
Wensli silk is a Chinese company that is specialized is the production and manufacture of silk products for both the local market and the international market. The company has a successful history that is anchored on prompt and accurate decision owing to the small number of people responsible in the process of decision making. Wensli silk was founded by Aiqin Shen in 1975 when she took over Hangzhou Jianqiao Silk Factory and the associated branches that deal with silk in the China. The proprietor was interested in forming a family business that would be a world leader in the manufacture and production of silk products. Aiqin Shen believed that transforming a business unit into an empire the best avenue was to entrust the leadership of the company in the hands of family members. This is because family members are not prone to diverted attention when the company grows, unlike non-family who may want to leave and venture into other fields at the time when the company’s performance is at its low period. The strategy worked for Wensli silk, but to bring up new ideas and expand the markets to outside China the company was obliged to hire non-family members to executive positions. In operating a family business significant challenge arises during the transition from one generation to the next and it may result in the dissolution of the company. However, if the transition is well -planned and the possibility of conflict eliminated, then the company will grow exponentially owing to the concentration of family members and the desire to succeed. Wensli silk has managed to plan its transition process effectively and therefore, handing of power has not affected the company’s operations. Decision making organs of the company have maintained a high percentage of family members and hence ensuring that the family interest and objectives are protected. This paper seeks to analyze Wensli silk to determine its qualitative and quantitative position in reference to the business environment. Additionally, the paper establishes the family and business system of operating the business that has made it a successful enterprise. Finally, the draft seeks to evaluate the competitive context of the business in a bid to come up with alternative business systems and offer recommendations that will propel the firm.
Definition of Key Issues
The management is responsible for the growth of any company, this is because the decisions they make may either build or ruin the company. The process of decision making is unique to each company and the system to be adopted is dependent on the type of business and the reason for factors that triggered the need for making the decision. However, it is important to analyze the Symptoms versus core issues and the Laundry list versus Clusters for a particular situation in order to come up with a management decision that is all-inclusive and applicable. Symptoms versus core issue is vital in ensuring that solutions are not geared towards solving symptoms rather than the problem. Symptoms are any indications that something or a process is not working out as expected and they indicate the existence of a problem in the business system. On the other hand, the core or the problem is the existence of situations and conditions in the business that require solutions and before the particular units may resume its normal operations. Managers are required to concentrate on finding solutions to problems rather than the symptoms. Laundry list is the concern that has been listed down by various parties regarding the areas that require interventions, they are ideas that require brainstorming before an action is taken. Clusters on the other hand, are the problems with common causes which have been grouped so that they can be addressed collectively.
Analysis of Wensli silk
Wensli silk was founded by Aiqin Shen with an intention of forming a family silk industry emperor and therefore the family system is dominant in the firm. The majority of the company’s shares is owned by the company with Aiqin Shen having most of the shares. After the formation of the company, Aiqin Shen two daughters were introduced into the company from different professions where they had gained expertise in their particular fields, this was an important input since they brought up new ideas into the management of the company. However, in the introduction of the new staff, they were assigned to lower level management and their growth and understanding of the industry ware developed before being assigned to decision making positions. Hongxia Tu the elder daughter is a management board member and the chairwoman of the Hangzhou culture Mall’s board. On the other hand, Hongyan Tu the younger daughter is the organization board chairwoman and the Secretary to the Communist Party Committee. Yunfei Wang, Hongxia Tu husband is a board member and the Hangzhou Wensli Biotech Co. Ltd.’sboard chairman, additionally, he is the Deputy Secretary of theCommunist PartyCommittee. Juanlua Li, Hongyan Tu husband is a board member and the organization president.
From inception, the company core business was to deal with silk products, however, it diversified its operations to adapt to the ever-changing business environment. The company ventured into cultural art business where its intention was to promote the silk culture. This led to the opening of Hangzhou culture Mall. Additionally, the company ventured into biotechnology business, asset management and financial investment as some of the support enterprise. The core business was to promote and uncover the silk culture, by incorporating innovation and technology in silk products. Wensli Group has developed the silk business and currently, it has come u p with three high-end silk products categories namely; cultural silk gifts, silk adornments, and silk artworks.Further, the company has transformed it mode of business from producing silk products to promoting the silk culture mainly through information management and product branding. In the year 2003, the enterprise made a milestone achievement by acquiring Wensli group, a French silk brand.this catalyzed its penetration to the international platform, to further accelerate its international recognition, the company hire Frenchman Patrick Bonnefond as its CEO.
Wensli group has a good competitive advantage in China, whereby it has established itself as a company of choice in the silk product industry and the silk art work industry. This has been made possible by the organization acquiring silk manufacturing industries and therefore, enjoying close to monopoly type of competition. In the international scene, the company faces stiff competition from established brands that are commanding the silk industry. However, the acquisition of Wensli group enabled the company to penetrate the international market, additionally, Patrick Bonnefond and the entire team have developed strategies that will promote the visibility of the firm’s products and brands in the global market. The intensive information management and the branding process is also expected to bear fruits and put the organization in the global arena.
The uncertainty facing the company and the management, particularly members of the family is the outcome of incorporating non-family members into the management of the organization. Additionally, another challenge is the difficulty of penetrating the international markets and the sourcing of raw materials. In addressing the issue, the company can resort to developing a branch that is mainly concerned with producing silk products targeting the middle-income group. Middle-income group forms the bulk of the world population and satisfying the demand of this group of people is relatively easy compared to the high-end group. Therefore, it will enable the firm to penetrate the international markets with ease as it continues with the intensive branding of the high end products. An alternative to ensure the safe and professional practice of non-family members is to develop a constitution that elaborates the terms of engagement and the benefits that come with honesty and hard work, this will ensure there is maximum cooperation and output from non-family management staff.
The company should not be worried about the in presence of non-family members in the decision-making organs of the firm, this is because they come in with new ideas hat can propel the organization further, additionally, as the company brands and position itself to produce high-end products it should not ignore the demand of the middle-class people since they form the bulk of the population.