Participating in the Reform of the State-owned Enterprises Actively and Promoting the Transformation and Upgrading of the Private Enterprises: Practice and Enlightenment of Sanpower’s Participation in the Reorganization of the State-owned Enterprises   
  
 
——Practice and Enlightenment of Sanpower’s Participation in the Reorganization of the State-owned Enterprises

　　Since the reform and opening-up, especially since the entry into the new century, the private economy has developed vigorously on the wide stage of overall well-off and modernization, and many excellent local enterprises have upsurged. In recent years, the private enterprise Sanpower Group has grasped the new opportunity by participating in the reorganization of the state-owned enterprises including Hiteker and Guangzhou Jinpeng etc., and realized the new leap of its own development. In 2009, the gross assets reached over 20 billion Yuan, the annual sales volume broke through 30 billion Yuan, had over twenty listed companies, solely-funded companies and joint ventures and over 16,000 personnel, ranked the thirteenth among China Top 500 Private Enterprises, the fourth among Top 100 Provincial Enterprises, and was striving to the target of entering into World Top 500. The actions of Sanpower group provide the beneficial experience for the private enterprises in our province to participate in the reform of the state-owned enterprises, and promote the common development of the private economy and the state-owned economy.

　　The process of participating in the reorganization is the process of quickening the industrial transformation and upgrade. Sanpower Group grasps the opportunity of the reorganization, plays the brand and talent advantages fully, concentrates its strength on cultivating the main industry, and realizes the great promotion of the overall strength of the enterprise. 

　　Making efforts to expand the industrial fields. Sanpower Group began its career from a computer assembly company in Zhujing Road of Nanjing in 1993, and developed into a large-scale enterprise with the annual sales income exceeding three billion Yuan in 2004. After it has practiced in the field of sales for many years, how to expand the development space and accelerate the industrial upgrade become the thought-provoking question for the enterprise, which urges it to make the strategic decision to participate in the reorganization of the state-owned enterprises. In this aspect, Sanpower took two great steps, and one is extending from the retail industry to the automobile field. In 2005, Sanpower reorganized Hiteker which was the first listed company in the industry of electronic information in our province. Sanpower relied on the industrial platform of Hiteker through the reorganization, it realized its extension from IT sales to the manufacturing fields such as automobile electronics, and printing equipments etc., expanded its industrial fields effectively, and strengthened its influential power in the industries. Meanwhile, benefiting from the large number of high-quality assets and technical innovation funds, Hiteker realized the “brilliant transformation” from “being in difficulties” to “rising forcefully”. At the end of 2009, the enterprise’s market value, sales income and total profit increased by ten, seven and eighteen times respectively by comparing with that before the transformation. In 2010, Sanpower Group undertook the cross-region reorganization, invested nearly 0.16 billion Yuan to control the equity of Jinpeng Group exclusively, which was the key state-owned enterprise in Guangzhou. Jinpeng once was the national communication enterprise enjoying the same reputation as ZTE and Huawei etc., and had the strength of development, research, construction and operation in the fields such as urban security, emergency command, digital management etc. After becoming the owner of Jinpeng, Sanpower integrated the original fields such as power and cable, automobile electronics, carrier communication products, digital set-top box etc. with Jinpeng effectively, made efforts to develop “digital urban” products with independent intellectual property and brands, transformed the enterprise’s competition methods from selling products traditionally to “providing all-dimensional system solutions” with high additional values, realized the advanced layout in the new round of information industrial competition, and seized the first development chance.

　　Making efforts to take new brand advantages. The brand is the main embodiment of the enterprise’s product quality and comprehensive strength. In the process of participating in the reorganization, Sanpower promotes the brand strategies forcefully, explores the market and wins competition by relying on the brand. Firstly, creating the professional chain sales brand. By relying on the platform of Hiteker as the listed company after the reorganization, Sanpower has promoted IT chain of its subordinate “Hisap” all over the country, formed four advantages such as understanding target customer groups deeply, having a clear insight into product tendency, developing suppliers constantly and deeply, and carrying out in-store management and arrangement accurately and properly since 2005. It takes the lead in carrying out the strategy of self-owned brand, and the computer brand “Hiteker” designed independently realizes the scale of the annual sales of 100,000 computers. Hisap has become the first professional IT chain enterprise insisting in the strategy of category focus and made great success, covered eight province (municipal)-level regions and vertical four-level market in the regions, and had nearly 200 self-operated chain shops. “Going to Hiteker to buy computers” has become the prior choice of many customers. Secondly, creating the service brand of “Red Express”. Focusing on diverse service demands of customers, Hisap has set up the efficient and professional service system called “Red Express” integrating chip maintenance, network remote services, shop follow-up services, and 10106699 technical support etc., and passed the national ISO9001:2008 quality assurance certification successfully. The technical service engineer team of the enterprise is composed of 3,000 persons taking up 30% of the total number of the personnel, the proportion is the maximum in the industry, and it has become one of the rare large-scale technical service providers in IT industry of China. Thirdly, creating “digital urban” construction operation brand. Information technology will be applied in the larger range and wider field with the fast urbanization process. Sanpower Group grasps the tendency keenly, enters into the digital urban construction field directly through the reorganization of Guangzhou Jinpeng, and competes with the international famous enterprises such as IBM “on the same stage”. At present, Sanpower puts the high-quality assets and development funds into Jinpeng gradually, promotes Jinpeng’s brand image as “the digital urban construction operator” vigorously, extends its operation range all over the country, plans to be listed within the three years, and increases Jinpeng’s reputation, influence power and market share to a new level.

　　Making efforts to strengthen talent support. Competition of the modern enterprises is competition of the talents. In the process of participating in the reorganization of the state-owned enterprises, Sanpower attaches great importance to talent capital and optimal allocation of human resources, and focuses on three-level talent hierarchy construction. Firstly, leaders. Chairman Yuan Yafei was a civil servant, gave up his “iron rice bowl” to set up the private enterprise resolutely in order to develop his new career, went through many hardships, kept on fighting in spite of all setbacks, brought a small shop in a computer city into the front ranks of the development of China’s private enterprises. He uses high virtues as the first quality of the enterprise’s development, dares to innovate, adopts new strategies, thinks creatively, does things boldly and has won the honorary titles such as “Jiangsu Socialist Construction Contribution Award” and “Jiangsu Excellent Private Entrepreneur” etc. Secondly, professional management team. As a large-scale enterprise group, it relies on the professional and dedicated management to excellently manage and operate over twenty enterprises in the fields such as IT chain, electronic manufacturing, and financial investment etc. In the process of the external reorganization and business development, Sanpower constantly absorbs excellent talents with leading thinking, international insight and professional quality into management teams, attaches great importance to display of individual abilities as well as utilization of overall strength of teams, and promotes the enterprise’s stable development on the scientific and standard management track. Thirdly, high-quality personnel teams. Sanpower thinks that the enterprise’s fortune is co-created by the owners, operators and personnel, and the personnel are the important human resources of the enterprise. The enterprise often develops skill training, and improves the personnel’s comprehensive quality constantly. At present, the managers and engineering technicians reach over 2,400, the personnel having bachelor degree or above take up 80%, including over 330 personnel having master degree, and over twenty overseas talents are attracted to join in it. The reasonable structure and high-quality personnel teams provide the important support for the fast expansion and healthy development of the enterprise.

　　The process of participating in the reorganization is the process of promoting the innovative development of the enterprise. Sanpower grasps the opportunity of the reorganization, carries out management innovation, business model innovation and operation innovation forcefully, and realizes the large promotion of the enterprise’s core competitiveness.

　　Promoting the enterprise’s management innovation. Yuan Yafei thinks that “there is no bad industry, but there is only poor management.” In the process of participating of the reorganization of the state-owned enterprises, Sanpower attaches great importance to the enterprise’s management, especially system construction, it has set up the management system with 200,000 words, and formed the new matrix management model with the characteristics such as clear processes, definite posts, specific responsibilities, high efficiency and smoothness. Sanpower’s standard management system covers various aspects of the enterprise’s management from organizational structure to operation rules, from post duties to process acts, from living principles to action methods. In the aspect of plan management, it ensures that everything is planned, assesses the results according to the plans, and avoids the problem of “disease of large enterprise” effectively. In the aspect of platform management, operation management is divided into the front and rear large platform, all the operation platforms use the rear management platform commonly, and the management costs are reduced largely. In the aspect of team management, it stabilizes operation management teams according to operated product lines, absorbs professional personnel into teams, and improves labor division coordination abilities and implementing responsibility capabilities of the large enterprise and diverse products. In the aspect of information system support, it develops a set of time-limited information management system integrating business flow, capital flow and logistics, supports multiple terminal flow office, and makes the enterprise’s operation efficiency and management abilities reach a higher level.

　　Promoting business model innovation. In the changeable market competition, Sanpower Group insists in innovating business model, tries to become professional and strong within the limited business range, and follow the principle that “we have one when others have none; we have the best when others have the rest.” It is the first enterprise which brings the modern business model in IT industry of China. IT consumption moves downward the general public fast and provides the realistic basis to the appearance of IT chain retail which is the modern business. Sanpower Group follows the tendency, sets up We Do Model (WDM), takes the lead in exploring standard and remote management in the fields such as the enterprise’s organization design, image identification, shop operation, centralized purchase, sales settlement, internal control system, remote management, market strategies, logistics distribution and so on. This unique business model has been tested by business practices and recognized widely in the country, so Hisap has become the enterprise of “China No. 1 IT Chain Store” for eight years consecutively. It is the first enterprise introducing DIY model in the professional chain industry in China. DIY is a way that a customer chooses to buy accessories to assembly a computer. Hisap is the first chain enterprise bringing DIY into terminal shops at large scale, satisfies with customers’ demands on choosing accessories to assembly computers by providing professional services to them. The international famous enterprises such as Intel and AMD once spoke highly of it, and thought that this kind of “open and clear” site service safeguarded customers’ interests, and made great contribution to innovation of IT consumption model.

　　Promoting operation method innovation. The development and growth road of Sanpower is the innovation road of operation methods. The enterprise insists in the integration between capital operation and industrial operation, between self-operation and investment operation, realizes optimal allocation of internal and external resources by the large-scale flow of capital and increases comprehensive force constantly. In recent years, Hiteker has issued private stocks twice, and raised 2.25 billion Yuan of the net funds. It creates the finance industry platform based on “banks, securities and trust” actively, and has held stocks of the finance entities such as Jiangsu Bank, Huatai Securities and Nanjing Trust etc. consecutively, and established strategic cooperation with many banks such as CITIC Bank. Jiangsu Bank increased its investment, and Sanpower Group became one of the main investment forces in 2009; In 2010, Huatai Securities was listed successfully, whose shares was held by Sanpower; it invested Nanjing Trust Investment Co., Ltd. and became the largest private shareholder; it invested nearly 80 million Yuan to set up Jiangsu Hi-tech Development and Growth Funds with Govtor Capital Co., Ltd. and take new steps in capital operation constantly.

　　The process of participating in the organization is the process of bearing social responsibilities actively. Sanpower Group takes the opportunity of the reorganization, strives for the construction of the enterprise culture, shapes the image of the national enterprise, and realizes the large promotion of the enterprise’s influence power and reputation.

　　Cultivating the enterprise culture carefully. The enterprise culture is the main embodiment of the enterprise’s core value. Sanpower has closely integrated the construction of the enterprise culture and the enterprise’s development, promoted the levels of the enterprise’s development with the cultural construction, and created enormous centripetal force of culture for the enterprise’s development after the organization and expansion. Yuan Yafei who is the pioneer emphasizes that the core of Sanpower culture is “Honesty, Reason and Clear Insight”. Honesty means being kind and honest, and thinking in customers’ prospective; reason means making efforts to explore and follow development rules of things, act according to principles; and clear sight means the enterprise’s development insight shall be long-term, and operation measures shall be smart. In the process of participating in the reorganization of the state-owned enterprises, Sanpower does well in the allocation works of personnel, specific standards are set up according to work period and properties, allocation policies preferring high level to low level, posts of technicians are adjusted with industrial integration, those personnel lacking skills will be employed in property and logistic departments, and the profits of the personnel from the transformed enterprises are maintained practically. In daily operation management, it sets up the concept of “letting the large number of personnel share the enterprise’s development achievement”, concerns about their vital interests such as safety and health, wages and welfare, social insurance and so on, strengthens their overall development abilities practically, and condenses their wisdom and strength to promote the enterprise’s development. Under the appeal and encouragement of the enterprise culture, the personnel and the enterprise integrate into the interest community and career community, which promotes Sanpower’s constant development and growth.

　　Dedicating to public welfare. Sanpower constantly thinks that private enterprise shall focus on righteousness and profit. Only when the enterprise creates economic effects, performs its social responsibly practically and seeks “profit” in “righteousness”, it can win more respect and trust from the society and promote its development in a better way. The enterprise has invested 0.2 billion Yuan to participate in public welfare and charity such as disaster relief, the Guangcai Programme, poverty alleviation and development, new rural construction and so on. In the aspect of disaster relief, personnel spontaneously donated about 3.5 million Yuan in total after the drought in southwest and Yushu earthquake in 2010; the group emergently allocated 4 million Yuan of materials to support the earthquake-stricken area Wenchuan and proposed its staff to donate 450,000 Yuan in 2008; it donated one million Yuan of materials to help the reconstruction of the snow disaster area. In the aspect of new rural construction, it participated in the activity of “Enterprise and Village Become Well-off in Pair”, and donated 700,000 Yuan to Pingzhuang Village in Yeshan Town of Liuhe District in Nanjing; it participated in the new rural information construction, and donated 2.5 million Yuan of funds and materials to hold All-province Peasants’ Online Competition. In the aspect of supporting education development, it invested five million Yuan to set up “Yuan Yafei Scholarship and Teaching Fund” and establish “College Student Venture Fund” to encourage self-employment of college students. In the aspect of caring for and helping the disabled, it invested human resources and materials reaching 3.5 million Yuan, donated a batch of high-configuration and high-performance computer equipments to Nanjing Disabled Persons’ Federation and set up the special network for the disabled with the largest information content and widest service range in China. The enterprise’s righteous actions participating in the social public welfare have been awarded by the governments and charity organizations at all the levels,  

　　Sanpower Group is an epitome of the vigorous development of the private economy in our province, and its practice of participating in the reorganization of the state-owned enterprises explores actively to further reform and promote the joint development of multiple ownership economy, and provide important enlightenment. Firstly, participating in the organization of the state-owned enterprises is the effective method for the private enterprises to become large and strong. The private economy is the important component of the socialist market economy. Sanpower’s practice proves that the private enterprise can integrate flexibility of its own systems and market acuity with management basis, technical advantages and human resources of the state-owned enterprises, which is beneficial to cultivate and form the new economic growth point, and promote its constant development and growth. Secondly, absorbing private capital is the important measure to promote the reform of the state-owned enterprises. After over thirty years of the reform development, a batch of private enterprises have had the strength of cross-region, and cross-ownership merge and reorganization. Sanpower’s practice shows that encouraging and supporting the private enterprise to participate in the state-owned enterprises’ reform and quickening the state-owned enterprises to withdraw from the ordinary competitive fields are beneficial to accelerate the strategic adjustments of the layout of the state-owned economy, promote the diversification of the main body of the enterprises’ property rights, increase the overall quality and international competitiveness of the industry, and realize the mutual development of the state-owned economy and private economy. Thirdly, insisting in innovative guidance is the vigor of the constant development of the enterprise. Innovation is the source of the development vigor of the enterprise and the key to win competition. Sanpower’s practice tells us that only the private enterprise uses innovation as the core power of the development, adopts the innovation spirit as its first spirit, promotes concept, technology, product, management and culture innovations vigorously and increases its innovation capabilities comprehensively, it can secure its place in the violent market competition. Fourthly, creating excellent environment is the necessary guarantee of the development of the private economy. Sanpower’s development and growth rely on the excellent policy environment. As for developing the private economy, the governments at all the levels shall encourage it in terms of policies, protect it in terms of laws, provide it with convenience in terms of services, create the social environment encouraging venture, the high-quality and high-efficient service environment, the strict and standard legal environment and the excellent environment supporting the development of the private economy in the society, and promote its better and faster development.

Provincial Research Office

Xu Shanpu, Xu Jinyuan and Fan Xubin