Yongle Build Large And Medium Joint Venture To Expand The Market Outside Beijing And Shanghai –

December 14, 2005, medium and large electrical appliances and Paradise Electronics announced that they reached was on December 11 of a framework agreement, will be funded 50% of the way the build joint venture as a pioneer in outreach. First piloted in Qingdao and Xi’an.

The news has caused Competition Rival States United States , Suning And appliance business concerns. 2005
Home appliance chain The current industry rankings, Yongle and Dazhong the list are among the top four were ranked third, fourth, and first, second place was occupied GOME and Suning.

Unified management of both joint venture stores
Dazhong Electric Appliance senior told reporters yesterday, Dazhong and Yongle signed a cooperation framework draft, a joint venture to build a joint venture to act as the vanguard of foreign expansion. The senior said, “This is a national chain of medium and large appliances in advancing the process of saving resources, using an effective expansion strategy it is to promote healthy development of home appliance chain useful attempt.”

Dazhong and Yongle under the framework agreement reached, Dazhong and Yongle will jointly select the first regional branch in early into the pilot. In the selected region, jointly funded by the large and medium and Wing-lok (each out of 50%) to form a new joint venture company, large and medium and continue to use their own Paradise

Brand The premise of the two giant chain stores in the selected region by the unified management of the joint venture company, in procurement,

Marketing , Development and human resources to implement an independent management company.
The high stress that the establishment of such cooperation, Dazhong and Yongle different from previous work together to build up in the John Winton. John Winton in the chain giant was even

Locks Development and Operate Construction of the relatively loose management advisory body to then as the parties did not request

Capital , Procurement, marketing and management for integration. Despite John Winton still playing the role of the originators of their design, but with the further development of the industry chain, need a more compact and powerful ways to promote cooperation.

Paradise chairman Chen Xiao is revealed, the two sides have been half a year of negotiations. Yongle side said the large and medium joint venture, and thinking is completely different from the text on the acquisition of Tsann Kuen, also different from the original on the Tom Lee and hundreds of joint ventures, is a new type of cooperation between the two giants relationship, this cooperation will help improve both the competition in the new force into the region, quickly expand their business areas, but also to avoid excessive competition in these new areas are killing.

Beijing, Shanghai joint venture model is not listed
According to Chen Xiao said the joint venture company in some second-tier cities. Joint venture in Beijing and Shanghai is not the list. The two sides will open the first two in Qingdao and Xi’an joint venture. Paradise now 3 stores in Xi’an, Qingdao has not yet entered.

Marketing manager, according to medium and large, said Zhang Yong, medium and large current in Xi’an and Qingdao respectively, 3 and 4 stores in these two places were also build 3 and 2 stores. Present in the manipulator by the large and medium, “but after such a joint venture built into the joint venture to go.” Yongle Marketing Manager Huang Jianping was revealed recently in Qingdao will be the name of a joint venture to open a new store.

It is reported that China, Qingdao and Xi’an in the United States were 10 and 13 stores, accounting for the local share of 40%, and Suning in the two cities were 4 and 8 stores.

Suning CEO Sun Weimin said the next year to open two stores in Qingdao, Xi’an open 3-4 stores.

Gome, Suning look cool, “Joint Model”
Cooperation to expand the industry that Yongle, Dazhong voice
Dazhong and Yongle joint venture for the news, the top two home appliance chain Gome and Suning have performed very cool.

Suning CEO Sun Weimin said that 50% of their investment patterns in the future will face many problems. Not just a matter of capital levels, including staff and management. “Who cares in the end, each

Business management Varies, how fusion. “He also mentioned that” how the future investment, investment and how much money, how to vote, how much loss is a limit? “And, later in Beijing, Yongle and Dazhong how future development in Shanghai? Difficult to Qingdao and Xi’an in a partner, playing tough battle in other places?” If this cooperation is laying the groundwork for greater cooperation, then meaning that there is. “

States Hair He Yang-ching, a spokesman, said 50% of their respective proportion of the risk there, who said the are not. In addition, both large and medium and Yongle

Corporate Culture Differences and very different management systems, such as Paradise has more equity shareholders.
Ho Yang Qing said the United States has completed the current state of the layout of the country, has reached 420 stores this year, the two rivals combined would not affect its established strategy, the number of stores next year to continue to improve. Goal is to attack the foreign giants into the home appliance chain.

Wen Jian Shen industry analysts believe that cooperation can be expanded in Paradise, large vendors in the discourse, improve the procurement scale will bring down the purchase price, to increase profit margins. At the same time, you can pool resources, avoid tight financial chain, human resources, lack of restrictions on commercial norms. However, the co-operation, how to coordinate two critical chain brands. Chain

Marketplace
The expansion has now developed a branding effect, Gome, Suning’s brand influence greatly. Now they have set up a new joint venture company, in the case of unification of resources, how to weigh the Yongle, Dazhong brand development? I think the ultimate result of the development will inevitably focus on building a national brand, and the other is reduced to a regional brand, will not achieve the simultaneous growth of the two brands.