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SMMCG1[TP3]_Cheng Shin Corporation, 50% of shareholding percentage -…
SMMC
G1
[TP3]_Cheng Shin Corporation
Horizon Diversification 2.1-2.2
Related industry
Vehicles manufacture
Bikes
Motorcycle
Cars
Bus
Tires manufacture
Petrochemical fuel
Mold equipment
Facilities
Components
AI System
chassis
Core Competency
Skills and technology for making high quality tires
Market power
Top10 world tire manufacturing corporation
HD for Cheng Shin
Producing different tires
Literally every types of tires
Petrochemical fuel
Tire manufacturing
wholesale
sell mold equipment
Economy scale
Car's huge market
Manufacture
76.8 millions sold in 2020
Maintenance
Change bald tires
High demand for tires
Economy Scope
Tire related industry
Benefits for HD
Ensure materials
Gain more profit
Reduce cost
3.1-3.4
-Geographical expansion
3.2
transnational strategy
high local responsiveness
high cost reduction
3.1
horizontal diversification
mold equipment
automotive ancillary products
3.3
coordination vs. control
Regulations Governing Establishment of Internal Control Systems by Public Companies
e-commerce
hold promotional activities online
knowledge flow
sets up research centers in the United States and the Netherlands
national competitive advantage
gather world-class talents to jointly develop global products
country and culture difference
National laws and regulations
complied no violations of competition or marketing laws
3.4
entry mode
Cheng shin established themselves except for the sales channels
1.1-1.3 Vertical Integration
downstream Vertical Integration
Cheng Shin Tire Sales Co., Ltd
the first time Cheng Shin invested overseas
Help Cheng Shin to build diversified operations.
Entry mode
Sole proprietorship
setup it's own factory
invest some value companies
Joint investment with Japan’s Toyo
Tires
Corporate Life Cycle
4.1
Overseas subsidiary
3 main brands
MAXXIS
PRESA
CHENG SHIN
stock market
market price per-share
rising by 37.6%
earnings per share
rising by 72.9%
consolidated financial report
operating expenses
decreasing by 9.23%
operating net profit
increasing by 22.76%
operating costs
decreasing by 15.58%
net profit after tax
increasing by 70.7%
operating income
decreasing by 12.14%
Future outlook
release price adjustments in a timely manner
integrate new and old generations of products
replacing them with products with high added value and high capacity utilization
obtain market pulsations with distributors in various regions
4.3
organizational inertia
agency problems
family's inheritance
4.2
CSR
Government
Issues of concern
anti-corruption
environmental protection
Negotiation channels
official documents, inspections, declaration systems, etc
Supplier
Issues of concern
transportation carbon emissions
Negotiation channels
manufacturer briefing meetings, irregular meeting reports, etc
Community
Issues of concern
waste treatment
wastewater
Negotiation channels
company website, e-mail, etc
Employees
Issues of concern
gender diversity and equality
labor-employment relations
Negotiation channels
labor-management meetings, employee seminars, e-mails, etc
Horizon Diversification 2.3-2.4
2-3 BCG Matrix
star in BCG Matrix
high market growth
advertising marketing
increase exposure to drive market growth rate
via
sponsors a lot of sports events
Core idea
spent money to maximize the marginal benefits
high relative market share
world's top ten brands in the tire industry
2-4 Governance mechanism
100% shareholding percentage
strong control of their subsidiaries and affiliates
For horizontal diversification
Subsidiary: Cheng Shin International (HK) Ltd
affiliate: Zhengdong Machinery Kunshan Co
produce mold equipment
Cheng Shin’s products
other companies' orders
50% of shareholding percentage