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Business Aspects

Business Aspects
Chinese company makes Heat Exchanger
Units (HEU)
Founded by Ma Rui in 1997 in Xian
Generated revenue mainly from Heat
Exchanger Units and HVAC(Heating,Ventilator
& AC).
Catered to residential and commercial projects
Standardised products for commercial and
residential application
Competitors SOE, Yongda and joint ventures.

Set up branch sales office in Lanzhou

headed by Zhou Xun
12 models and 3 product lines of
heat exchange units
Revenue over RMB 6.2 million
Started manufacturing from 3rd party
in 2000
27 employees in 2002

Ma had a strong engineering and technical background
so he had
designed series of heat exchanger units with different
won several national prizes in boiler design.
Captured 80% of low end and 20 % high end
commercial and residential projects
Employees were more reliable.
70% of the sales engineer were university graduates
with engineering background.
Attractive compensation package.
Employee benefits- 10%

Zhou Xun former sales manager has
left and joined their competitor
Jindi did not owned any production
From 2002, manufacturing was done
by a third party.
Low recognition in high end market

Expanding into industrial markets
Establishing connecting with
architectural design firms
Communicating value to customers
efficiency, low energy consumption
and good quality

Since Zhou has left the company so
he can disclose the Jindis sales
Cut throat competition (Yongda)
Competitors products were cheaper,
provided good service, and were
financially strong
Low end market was cluttered

Strategic decision
Expanding into industrial market
Less competition but established
High barriers to entry
Few large but national players mostly
Opportunity to secure 20% 30%
premium over existing product line
Payment cycle time 30 days shorter

Exceptional engineering ability

Technical solution efficient and
Sales team with technical proficiency

Customised products to be supplied
Not enough funds to manage both
product lines