Based On Core Competence Research Into Chinese Iron & Steel Enterprises Merger & Acquisition

Generally speaking, there are two ways to foster and enhance the core competence of the enterprises. One is through the accumulation of internal resources, another way is through the adoption of external resources. The former is called an internal development type, the latter briefly named a type of external expansion. The former way, which is not in line with the development of policy in fostering the enterprise competitive advantage and sustained competitiveness of China's iron and steel industry, does not have practical. But M&A also is a kind of main form of external expansion, By the latter way, reorganization and integration of the corresponding resources could get new core competence effectively. This matches our country steel industry development policy, which support enterprise group with the national steel of the strategic reorganization's developing a policy. And the trend of reorganization inclines to be in line with the iron and steel enterprise of international scope.With the main line——M&A of iron and steel enterprise, this paper, based onthe recent domestic and foreign M&A classic cases, compares the status of M&A of iron and steel enterprises, demonstrates the characteristics and differences of core competence of M&A of iron and steel enterprises among different countries, which rely on imports of sea-based resources in Japan and South Korea, and cross-border M&A in European. According to the M&A development of the iron and steel enterprises and the core competence theory, three strategic M&A modes are comprehensively analyzed: M&A of the core competence based on the strategicresources——mainly fixing eyes upon the integration of the tangible strategicresources of the M&A enterprises; M&A of the core competence based on thetechnology——mainly researching the technical complementary advantages ofintangible resources of the M&A enterprises; M&A of the core competence based onculture——mainly comparing the sharing and mixing of culture differences ofintangible resources of M&A enterprises. Its conclusion is: after the M&A and integration, the core competence of some period is different in different time and development stage of different countries so that new core competence should be introduced to adapt to the competitive environment change.Referring to the status of the resources, production and market environment and layout of China's iron and steel enterprises, the paper proposes the sustainable competitive advantage is generated by the heterogeneity of resources of the enterprises. Concerning about the sustainability of competitive advantage should merge and restructure China's iron and steel enterprises macroscopically, especially the integration of the core competence based on the tangible strategic resources, to mainly make the regional distribution of resources and the space layout of steel base coordinate, and make the total resource supply of the upstream industries and the total resource demand of the steel production capacity of downstream industries basically balanced. Since the weak status of raw material in iron and steel industry chain, The paper also analyzes the bottleneck factor which influences the upgrading of the wholecore competence advantage of China's iron and steel enterprises——the allocationand integration of the original ore tangible resources. The paper attempts to do regional and inter-regional join and restructure by the way of M&A and integration in order to share the core competitive advantage from markets and resources of upstream and downstream industry chain, to expand the scale of iron and steel enterprises, and form aggregation effect of iron and steel industry clusters, thereby fostering and enhancing the core competence of the M&A iron and steel enterprises.