Research On Cost Leadership Strategy Implementing Of Zhang Ye Power Plant

The environment of state-owned power plants has changed due to the new successful reform of electricity system. Two actions, separating net from plants and bidding for net, have been put into force, which mark the opening of electricity area and the setting up of the market of power. There will be an intense competition among the power enterprises as a result of the break of monopoly. It is of great importance for us to analyses the situation and study the business competition strategy of power plants, because there will be a great impact on the state-owned power plants from the changed environment.For Zhang Ye power plant, which has been founded only a very short time, how to face the reform of electricity industry and choose appropriate business strategy will be the key of success. For the special structure and characters of electricity, low cost leadership is the only choice for power plants. In other words, how to combine the external environment and its own resources and capabilities to reduce cost is very important for Zhang Ye power plant.The paper begins with should-be conditions of Zhang Ye power plant's low cost strategy. In particular to new change and reform of electric industry, the plant's opportunities and threats of four main aspects, which includes political and law environment, economical environment, technological environment and social environment, were described firstly. Then, combined with Zhang Ye power plant's internal actual condition, which includes value chain and core ability of Zhang Ye power plant, the conclusion, was drawn as follows: external opportunities were stronger than external threats and internal weaknesses were stronger than internal strengths.Based on this conclusion, and under the particular characters of electricity industry, some advice and suggestions were given for Zhang Ye power plant's business strategy- cost leadership strategy in the long run. And then, some methods and ways were drawn to reduce cost of Zhang Ye power plant. In the end, this article analyzed and summarized the principles and the key factors to carry out the cost leadership strategy successfully and efficiently.