A Study On The Competitive Strategy Of Hydrogen Fluoride Products For Jinan San'aifu Fluorine Chemical Co., Ltd.

Jinan San'aifu Fluorine Chemical Co., Ltd. (JSFC) is a newly established company by Shanghai Organic Fluorine Research Center through asset reorganization. It originated from Jinan Chemical Factory, which has a hisitory of more than 80 years and is one of the earliest fluorine producing enterprises in our country. Hydrogen fluoride products are its leading products. As the competition becomes so severe in the industry, JSFC is now analyzing, studying and designing the competitive strategy for the products.This thesis quests for the competitive strategical models of the hydrogen fluoride products by means of PEST, five-force model of Porter, value chain, strategical clock and SWOT analysis method together with comparision, questionare, quantitative and quantitative methodolody.First of all, this thesis looked back on the definitions of strategic management and fundamental competition strategy by different gurus and experts, expatiated the main points and contents of the designing school, the planning school, the positioning school, the capability school, the resources school and their theories, all of which contributing to the guidance of this research. It also introduced the driving factors of basic competition strategy.Then, this thesis illustrated the opportunities and threats that JSFC faces through political and leagal, economical, social, and technological analyses, based on the conditions and situations of the company and its hydrogen fluoride products. These opportunities include the economic development in terms of fluorine chemicals which brings about the development of hydrogen fluoride products; the changes in the population structures, which improves peoples' need for fluorine chemicals as freezing agent; the increase of proper-age population which will benefit the enterprise in acquiring low-cost laborers; the scientific and technological development which stimulates the regeneration of hydrogen fluoride related technologies; the state policy coordination for the maturing development of the hydrogen fluoride market; the increase in income, which helps improve living conditions and living qualities through adopting fluorine related paints in furnishing and using fluorine related freezer in air conditioner; the betterment in legislation, which stipulated markets and improved the macro environment. Threats include the cancel of the returned taxes of hydrogen fluoride products, which affect the development of hydrogen fluoride enterprises, lowering the competitivity of the hydrogen fluoride products; the low industrial threshold and trade barriers, which leads to high vulnerability; the national confinement on the digging of fluorbaryt, which limited the development of hydrogen fluoride products; the environmental assessment and safety evaluation requirements in the development of new hydrogen fluoride products within the enterprises, wchich somehow enhance the difficulties of picking up new products; the lack of resources refraining the enterprise development; the aggravating pollution, which increased the burden of processing; and the slowing development and application of new materials, which restricted the development of hydrogen fluoride products. This thesis analyzed the industrial environment that the enterprise faces by using five-force model in terms of potential competitors, current enterprises within the industry, suppliers, customers and replacements. It is held that customers are the biggest threat of hydrogen fluoride products. For customers of the hydrogen fluoride products, it is relatively easy to find other suppliers for the low conversion cost. Meanwhile, hydrogen fluoride products are standadized and homogeneous, lacking in differentiation. Customers are, nevertheless, quite sensitive to prices.In addition, this thesis analysed the inner environment of the company in terms of resouces and capabilities. Advantages and disadvantages of the company are as follows. Advantages include the flexible policy for gearing to the market changes because of small scale of organization; the mobilized marketing policy and fine credit to the customers; the quality workers with strong competition power; incessant reformation of the manufacturing processes enforcing the profitting capability of the company; advanced production technologies; teamwork with strong learning ability, and being unified and daring; the fine management system and competitive mechanism; the production experiences of decades and ownership of technical staff mastering core technology in producing hydrogen fluoride. Disadvantages include low capacity in financing; weak innovative ability duo to the restriction of traditional ideas of the state-owned enterprises; large inventory which occupies a large amount of capital; unscientific and unsystematic planning of human resources; relatively low levels of education of personnel; organizational structure calling for adjustment; unscientific, loose and casual features of production; lack of sound enterprise culture; relatively small scale of production and relatively low ratio of start production.According to the mission, target and overall strategy of JSFC, combining questionaires, using the SWOT analysis and driving factors analysis of competitive strategy, this thesis held that the hydrogen fluoride products of JSFC accord with the conditions of implementing low cost strategy. This research proposed that JSFC must carry out low-cost competition strategy for its hydrogen fluoride products, that is, to remain the quality of products and services in lowering prices.Competition between companies does not depend simply on certain links, but on the whole value chain. Comprehensive factors of the whole vale chain determines the capacity for competition. JSFC will realize its strategic target through the reorganization and merge of each link of the value chain on corporate framework, financial management, human resources management, technical reformation, purchasing, operation, marketing and selling, logistics and services. First, reformation of the company framework. Second, enforcement of financial management. Third, eulogization of human resources management. Fourth, enforcement of technical reformation. Fifth, improvement of the process of purchasing and lowering its cost. Sixth, control the expense of logistics. Seventh, reinforcement of produtive operation and management. Eighth, strengthening marketing and reducing selling cost. Nineth, offering rational services.Finally, by summing up and looking into the future of hydrogen fluoride industry, this thesis proposed that JSFC needs to seriously considere and explore the system refonnation, development models and financing so as to ensure the sustaining, lasting and successful realization of low cost competitive strategy 'for its hydrogen fluoride products.