Introduction: The paper industry has long been debating the path of transformation and upgrading for Chinese paper companies. For any enterprise, defining a clear and realistic development strategy is one of the most critical steps before embarking on this journey.
When companies set their strategic goals, the concepts of "bigger" and "stronger" often become intertwined. These terms are straightforward in meaning—“bigger†typically refers to expanding the scale and capacity of the business, while “stronger†implies deepening expertise in core areas and becoming a leader in those fields.
So, how should companies choose between these two directions? According to analysts from the International Pulp and Paper Network, when developing strategies, companies must not only consider their own market position but also closely monitor industry trends and external changes. Market dynamics and environmental shifts can significantly influence strategic decisions. Moreover, the two concepts shouldn’t be treated as separate choices; instead, they should be integrated organically. A company should grow in size without neglecting strength, and at the same time, it should build strength while aiming for growth.
During the rapid expansion phase of China’s paper industry, many companies opted for the “bigger†approach due to oversupply. This was largely driven by market conditions. However, some companies focused too much on growth while ignoring the need to strengthen their core competencies. As a result, they failed to develop high-value, specialized products or technologies. This lack of balance led to slower growth, stagnation, and even decline as the market became saturated and the industry slowed down. Many found themselves struggling to break through, feeling uncertain about their future direction.
However, it's not too late for these companies to make adjustments. With the industry facing a downturn, many paper companies are in similar situations. Now is the time to seek innovation, identify new opportunities, and explore untapped markets. In our view, the current industry landscape makes “strengthening†a more viable choice. Companies must go beyond their traditional roles and focus on improving product technology and increasing value. After all, true strength and scale come from technological leadership and innovation. By doing so, companies can not only survive but also thrive in an evolving market.
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