Chapter 1353 – Business Ecosystem
“Old Zhong, you can discuss with your men about these issues and see if it is implementable.” Feng Yu gave Zhong Qingxian a doc.u.ment he wrote.
Businesses are most concerned about the industry chain. Businesses of different industries are closely related, forming a chain.
This is a disadvantage to businesses. If any part of the chain cannot keep up, the whole supply chain will collapse.
For example, the industrial chain of an automobile company is parts manufacturing, development, and a.s.sembly of the automobile, sales, and after-sales services. This is a complete industrial chain.
If there are problems with the sales stage, other parts of the chain will be affected. The cars cannot be sold. There will be no more after-sales services, and parts manufacturing, development, and a.s.sembly of cars will stop.
That’s why most businesses will have two systems as a contingency plan. The upstream and downstream of a business should not have one partner. They must have at least two or more partners. At the same time, their partners must also have more than one partners to prevent any issues from arising.
This will form a tightly knitted interrelated network of companies.
This is not a bad model, but it’s hard for businesses to grow rapidly.
If the businesses in the upstream join forces, they can limit the company’s growth. The easiest way to prevent such risk is to form your business ecosystem.
This means you have to do everything yourself.
Using the automobile industry as an example again, the company must handle the parts manufacturing, development and a.s.sembly, sales, and after-sales services.
But this is not a complete cycle. It must include the sc.r.a.pping of vehicles, recycling and processing the steel and using the recycled steel to produce automobile parts.
Songjiang Motors’s cycle is not completed, and it’s very hard to form a chain. For example, when steel prices rise, the parts’ cost will also rise, and the selling price of their cars must also rise.
There are significant impacts from the up and downstream. To prevent the company from being at the mercy of others, they must control all the related businesses.
Songjiang Motors handled the parts manufacturing to the after-sales services. Feng Yu had settled the part for raw materials. The Polar Bear Mining Enterprise has started producing steel, and they have control over the basic material.
Feng Yu wants all of his current businesses to expand to their up and downstream and form an ecosystem.
Another advantage of forming a business ecosystem is the related business will benefit when the value of any one stage increases.
This forms a win-win situation for all companies within the chain and reinforces the bonds between them.
A business ecosystem can let all partic.i.p.ants benefit from the industry growth, better position themselves, and increase their adaptiveness.
Feng Yu owns a lot of businesses. Some had already formed their business ecosystem. For example, Beidacang. They own the agricultural land, processing factories, and sales. Their factories also produce animal feed to feed their pigs, chickens, etc. These animals’ waste is used as fertilizers for their farms.
The chicken waste is also made into fish feed, and the fishes are processed into food or other animals’ feed.
The agriculture industry ecosystem is easier to complete. The production and sales are also simpler, and such a system can give consumers peace of mind.
But other industries are more complicated to form a business ecosystem.
Feng Yu is trying his best to complete it. For example, he had invested in a Crystalline silicon factory, one of the raw materials for electronic components. The a.s.sembly of electronic components, system development, product development, sales, and after-sales services are all completed.
Feng Yu still does not control the raw crystalline silicon and does not own any electronics recycling plant. That’s why this cycle is not completed. It can only be considered a business chain and is affected by raw crystalline silicon prices.
Feng Yu has a partner for crystalline silicon but not for recycling plants. There are only a handful of people doing this in China. He got his men to check out the electronics recycling industry and found that most companies are located in two regions. j.a.pan and Taiwan.
These regions are formerly Asia’s top crystalline silicon industries. After Feng Yu’s raw crystalline silicon plant started production, Wind and Rain crystalline silicon have become the world’s biggest crystalline silicon company in the world. They supply almost half of the world’s supply.
They could easily exceed this figure, but they stopped. Anything more than 50% might be considered a monopoly, and they will face lawsuits.
Some Chinese crystalline silicon companies started to revamp their production lines and technologies after seeing Feng Yu entering this industry. Very soon, China’s crystalline silicon companies will be supplying more than half of the global demand. These companies’ total production is no where close to Wind and Rain crystalline silicon, and Wind and Rain crystalline silicon has the final say in the crystalline silicon prices!
The business ecosystem Feng Yu wants to set up the most is the financial industry ecosystem. In his previous life, the only digital financial ecosystem is Ma Yun’s Ant Group. All other companies, who tried to imitate their model, cannot be compared to them.
Ma Yun’s companies’ biggest a.s.set is this Ant Group. Its core is Alipay. Many people speculate that if Ant got listed, he would become the World’s Richest Man!
Many people are puzzled. Most of Alibaba’s shares are owned by foreign investors. Although Ma Yun and his team have the final say in the company, the Chinese Government should not be supporting them.
This is because the most profitable business, Alipay, is owned by Ma Yun and his team. Although Alibaba’s other businesses are doing well, those are nothing compared to Alipay and Ant.
Look at those banks’ a.s.sets after they got listed, and you will know how great Ant’s potential is. This is a real digital bank, and it includes all bank services. Most importantly, it has the most valuable transaction history!
“Manager Feng, I will discuss with the rest. But I think it should not be a problem. Even if we cannot do it ourselves, we can exchange shares to get the controlling stake. This way, we will lower our risks!”
“Go ahead. If you require Wind and Rain Holdings help, let me know. I will get Kameda Masao to a.s.sist you.”