Yunnan Copper To Maintain A Competitive Edge Research

Business competition is that between a firm and its competitors. Yunnan Coppery ranks the 3rd largest copper firm throughout the country and faces fierce market competition from others such as Jiangxi Coppery, Anhui Tongling Coppery, Jinchuan Non-ferrous Metals and Hubei Coppery.To be successful in competition, firms need to ensure that resources go in the direction that would make them most effective in the market resource allocation process. This would result in that the fittest survives.The approach of this paper is based on the business competition advantage model. It applies the positive analysis to answer the question as to how Yunnan Coppery would develop and maintain its competition strength in an environment packed with various competitors.In theoretical analysis in chapter 1, a conclusion is made that modern business competition theory goes far beyond the tradition theories of core technology edge (also put forward as hard core competitiveness). It is equally significant to realize the importance of soft-core competitiveness composed of resource, ability and system factors.In the theoretical analysis in this chapter, the paper discussed the approaches and steps to develop, maintain and upgrade business competitiveness. We both emphasize the external access and the internal one. After analysis on both chapter 1 and chapter 2, we conclude that customer value is the source and judgment of business core competitiveness.In the strategic analysis in chapter 3, we make sure to choose the most appropriate ways of analysis. The FAROUT approach is selectedfrom the recent concepts to compare different ways. Finally we choose the SWOT method and the chain of value method.Chapter 4 is the major part of this paper. According to the SWOT analysis, we surveyed the opportunities, challenges, strengths and threats in competition. A conclusion is drawn from positive analysis that the major weakness of Yunnan Coppery is its location far from raw material ports and places of consumption. Its transportation cost is RMB 800-1200 higher than those of Jiangxi Coppery and Anhui Coppery, which cut down its profit dramatically. Therefore, the point and breakthrough is that Yunnan Coppery should try to be effective as well as be big and powerful. Secondly, management should be comprehensive and efficient rather than crude. Thirdly, chain of value should extend to management of technology advance rather than production management.In the paper there is new thinking on strategic goals and emphasis. Another breakthrough is the one of resource strategy. Refined processing and resource management strategic should be made.Chapter 5 goes further from chapter 4 to make study into chain of value. As a resourced-intensive firm, Yunnan Coppery can only use the low-cost strategic expansion and make good use of chain of value if it is to realize its strategic goals. In recent years, Yunnan Coppery made big investment to introduce Aisa furnace that makes the production cost competitive. However, in the part of the chain of value where there material and the consumers are linked, the overall cost is high and the weakness is obvious. In making the competition strategy, Yunnan Coppery should see and solve that problem. The chain of value analysis corresponds with the SWOT analysis: the major weakness is that the location of Yunnan Coppery is far from ports and consumption. It is an import-dependent business, and its profit is confined to the processing fee offered by the overseas copper manufacturers.Therefore, the breakthrough of the paper is that it points out the biggest problem facing Yunnan Coppery, and take into account of technology features of coppery supply, production and sales. In 2002, for example, Yunnan Coppery has an asset of 8,827 billion and sales of nearly 4,3 billion. Yet the profit is only as much as 35 million. Both the capital-profit and revenue-profit ratios are extremely low. This leads to its vulnerability in price fluctuation, in particular copper price falls. Although in 2002 it copper production reaches 185,000 tons, increased by 8.35% from last year, its profit decreased by 17.6%.Through the paper we pinpointed the problem in Yunnan Coppery strategies. Feasible operation policies and advice are given from a creative point of view.