V-development Strategy

Strategic management of enterprises as a long-term, overall planning tool for enterprises is a must-have tools and effective means to improve their own competitiveness. An important role the oil industry plays during the implementation of economic and social sustainable development strategies is to ensure the steady growth of oil production, to speed up the development of the natural gas industry, which has become an important condition and guarantee for the implementation of sustainable energy development strategy. The development strategy determines the survival and development of an enterprise, nevertheless, the oil business competitiveness pending much on its formulation and implementation of development strategy.Company V, a high-tech enterprise with advanced technologies is engaged in oil and natural gas exploration and development, and mainly in charge of development of Pinghu oil and gas field in East China Sea Area. In more than a decade, although it is set up as the project company in the very beginning, it has been listed in regional top 100 enterprises and made positive contributions to "Escalation New-generation" of city gas. However, nowadays, the so called "Big Three" China state-owned enterprises in energy sector -China National Petroleum Corporation, SinoPec. and CNOOC has strengthened their capability of emerging in the domestic market, in particular, severe competition for occupancy of natural gas market in Shanghai and further development of the East China Sea Area, from which, for a local oil company in the same industry - Company V is confronting even more pressure in its development. Therefore, one of the current critical tasks for Company V is how to formulate feasible strategies, and work out an innovative method to develop itself combining with its own advantages in the variable environment.In this paper, I would like to analyze objectively the prevailing strategic advantages of Company V basing on strategic concept and theory, referring to cone-shaped structure with a strategic advantage and Mao Zedong's "Base Area" theory and taking Company V's background as foundation, in aspects of scientific corporate governance structure, human resources, product structure, sound financial advantage, adaptation to the policy, the unique company culture, and so on. On the other hand, I also analyzed factors constraining of Company V's further development, for instance, lack of reserve-production, unbalanced ratio to storage and exploitation, severe oil and gas production, more difficult to control the cost of the project, difficulties in exploration, most of the remaining resources from marginal gas fields, traditional way of exploitation and inadequate skills to explore in deep Sea area. At the same time, the opportunities and threats confronting the company's development is also discussed.It is considered in this article that by using Company V's first-mover advantage and human resource in Shanghai for their strategic advantages, the company will collect super natural resources, enhance the exploration and development technology adapting to the China East Sea Area, and finally become the strongest in the exploration and development company in this region for obtaining more developing regions from the shareholders. Company V chose "Base Area" development strategy supported by three-dimensional strategic advantage, taking natural gas-based products, crude oil as supplement material, light hydrocarbon as value-added products, focusing on developing China East Sea Area, and the original blocks as base area, relying on its own advantages, coordinating various resources to expand constantly exploration regions, basing on "to survive " concept to pursue development stability for local leading position of developing the China East Sea Area. There are three specific stages to carry out the strategies. First, set up the base area; second, strengthen and develop the base area; third, copy the base area in order to become the leadership of exploring and developing China East Sea Area. Above all, strategic design to Company V is done through strategies of resources, technology, alliances, intelligence and etc. and accordingly, this article has put forward six strategies of innovation to a specific organizational structure; re-create the corporate culture; scientific and technological progress to enhance their core competitiveness; market-oriented and strengthen marketing management; strengthen enterprise management, improve the corporate governance system; actively explore the development strategy and so on. It is my wish that through this article, the topic will provide some advice to Company V and draw your concerns or thoughts.