Overview of COFCO strategy

In COFCO, Chairman Ning followed the growth law of Welch, the former CEO of General Electric Company, "either first or second, or you can fix it, sell it or close down". For COFCO, "state-owned enterprises, foreign trade enterprises, diversified enterprises and transformation enterprises" are in jeopardy. Put eggs in different baskets and emphasize the advantages of specialization. Therefore, Ning has determined the development strategy of the enterprise, transforming the enterprise into an industry-based enterprise, and at the same time engaging in limited diversification and all-round integration of the enterprise. For example, COFCO's three Great Wall wines are systematically integrated, and the terminal sales are unified, highlighting the joint strength of brands; For example, make full use of its own advantages to develop ethanol and bioenergy; A series of mergers and acquisitions, such as the acquisition of Tunhe River in Xinjiang, the acquisition of Shen Baoheng, the acquisition of Zhonggu, and the entry into the insurance industry, all highlight the integrated management of COFCO in terms of resources, such as expanding product lines, controlling upstream raw materials, and entering growth industries, which can form a joint force with enterprise development. In order to further promote the integration of COFCO, recently, China Grain and Oil Co., Ltd. was split on a large scale, and food, beverage and agricultural products were separated. Among them, COFCO Oil will focus on food and beverage business, and the company name will be changed from "China Cereals and Oils International Co., Ltd." to "China Food". The spin-off of "China Cereals and Oils", which mainly focuses on the processing of agricultural products, will be listed on the main board of Hongkong. After the spin-off, the core business of China Food will be divided into four parts: First, the Coca-Cola beverage and alcohol business mainly engaged in production, bottling, distribution and sales; Second, it is mainly engaged in the production and sales of red wine, white wine and Shaoxing wine of "Great Wall" and "Huaxia" brands; The third is candy products such as chocolate mainly based on "Di Chin"; The fourth is the small package edible oil business, with brands such as "Fulinmen", "Fulinmen" and "Hayes". The core business of China Grain and Oil includes biofuel and biochemical business, oil processing, rice trade and processing, beer raw materials and wheat processing.

Edit the development strategy of this paragraph.

Looking at the business scope of COFCO, there are three main businesses at present: food processing and manufacturing; Grain and oil, food trade, grain and oil sugar futures and logistics; Insurance, hotel and real estate development and management, the whole COFCO has formed a development pattern with grain, oil and food processing industry as the main body and related industries as the consideration. For these industries, they are undertaken by four major sectors: First, COFCO Cereals and Oils Import and Export Corporation is engaged in grain, oil and food trade, mainly in import and export business, and some are engaged in entrepot trade; Second, COFCO International is engaged in the production, processing and manufacturing of grain, oil and food, including Fulinmen edible oil, Di Chin chocolate, Great Wall wine, COFCO flour, COFCO malt and other products; Third, Li Peng International, represented by Gloria Hotel, engaged in real estate and hotel business, has developed more than 5 million square meters of properties in China so far; Fourth, the financial sector, including futures brokers, finance companies, Sino-British Life Insurance and Zhong Yi Insurance, is engaged in the grafting service of industrial capital and financial capital. For the development and growth of COFCO, it is mainly:

Cooperative diversification strategy

Since COFCO changed from an import and export trader to an industrial development stage, its main industries are: food manufacturing, real estate, hotels, finance, insurance, bioenergy and so on. These businesses are all synergistic. For example, according to the company's strategic positioning and the synergy between businesses, the company's existing businesses and related businesses of the group are evaluated and reviewed, and long-term growth momentum is obtained through internal growth and external expansion, and the company's internal resources, including brands, channels and resources, are integrated. For example, in terms of edible oil, the market has occupied a dominant position, from independent Fulinmen to holding Lu Hua, and then to developing high-end mining, forming a series of brands and effectively forming brand segmentation; For example, the reorganization of Zhonggu has strengthened its advantages in the field of agricultural product circulation; Entering bioenergy not only makes use of its own advantages, but also has the support of the state for energy strategy, which has a huge development space; Using capital to enter insurance and real estate, through strong capital strength to carry out industrial integration, diversified investment and professional management, it has produced good synergy. For example, in the real estate industry, COFCO injected high-quality real estate development business into Shenbaoheng after the acquisition of Shenbaoheng; Using the existing land resources of Shenbaoheng, a production and processing base of grain, oil, food, packaging and other products will be set up in Baoan District by renting a factory or other appropriate forms, so as to develop Shenbaoheng into a listed company integrating logistics, warehousing, trade, procurement and real estate.

Group strategy

Judging from the management mode of the five major business groups of COFCO and its subsidiaries, the whole COFCO is implementing the collectivization development strategy, that is, industrial integration by holding and acquisition, and then forming a value chain and supply chain with synergistic benefits. Of course, in the process of collectivization strategy, the group culture, core competitiveness and unified image of COFCO have not been effectively formed. Although its product brand and corporate brand have gained great popularity and reputation, the brand image of the group needs to be improved.

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"You can't put eggs in different baskets, but you should also emphasize the advantages of specialization." For the future development of COFCO, it is necessary to build core competitiveness other than COFCO capital, because COFCO, as a leading enterprise in the domestic grain and oil industry, is not competitive enough and its business development is not stable enough. There are few means of competition, and the focus of competition is mainly limited to production capacity and layout, but there is a lack of complete integration of supply chain management, talents, products, brands, technology, resources and other factors. The lack of core competitiveness such as profit model, supply chain competition, corporate governance and management system and corporate culture model may be the biggest hidden pain of COFCO at present. With the further liberalization of the market and competition from abroad, COFCO should further develop its "combination boxing" and cultivate its own "core" in order to grow healthily in the increasingly international market structure. Implement industry focus, product focus and continuous innovation, and take the road of "industry integration" and "market diversification"; Cross-regional operation, reasonable concentration and dispersion of resources, upgrading and establishing management and control capabilities and systems, guiding internal human resources development, and pursuing stable return on investment; Standardized management, intensive integration, systematic process and standardized system ensure superior competitive position. As Dong Huan said, the shaping of COFCO's core competence should be constrained, that is, based on the strategic positioning of the enterprise and by means of professional development, from the existing core resources of COFCO, such as brands, talents and market networks, the integration of enterprise knowledge base, innovation mechanism, management, culture, resources, technology and services should be promoted, and an independent R&D system, an effective management platform and a systematic corporate governance and control system should be established. It also needs extension, that is, taking core competitiveness as the goal, obtaining the core technology source needed by enterprises or the talents who master the core technology source through market means; Establish strategic alliances with enterprises with complementary advantages or acquire enterprises and groups with certain comparative advantages. The current merger and integration of COFCO and its possible internationalization in the future are just a means and process of outreach. Therefore, in this process, COFCO should be alert to all kinds of crises and great risks brought by outreach. Only with strong integration ability, error correction ability and balance ability can we ensure the success of outreach.