Xx City Gas Co., Ltd. Development Strategy

Coke oven gas and coke are the main products of the Gas Business Co., Ltd. in XX city. Coke oven gas becomes the gas source for urban pipelines after purification. And the coke can be distributed to the steel corporations for pig-iron smelting. As the only pipeline gas supplier, the company should provide public service like constant gas to the city on the one hand, and earn profits as much as possible for its shareholders on the other hand, which requires a balance between efficiency and fairness. Thus, to the management board, it is a big challenge to settle this out and maintain a healthy and sustainable development of the company.From the perspective of public service, gas can be the principal product of the company, and also the fundamental of it; while from the operation perspective, coke should be its prime product since it accounts for a decisive 80% in the whole sales revenue. Therefore, the company has to take much more aspects into account when produce and sell the gas as a quasi-public good.As the deepening of the global economic crisis, the coal prices have a violent fluctuation, and the price and demands of coke are plummeting deadly for the shrinking demands for steel. The coke business of the company hence faces a danger of huge profit losses. Moreover, the company has began to invest the No. 4 coke oven yielding 600,000 cube meters gas daily, which would be finished and put into production in December 2009, with an increase of 600,000 tons coke. The present situation not only destroys the balance between production and sales, but also brings a larger crisis to the endangered coke business.In spite of the soaring coal price and the obstacle of coke sale, the company could not limit or stop the coke production for its continuous restrictions. Thus, struggling for a way out with a long-term strategy is no doubt becoming the priority for the management board, and also the municipality.Based on the adequate data of the coal chemical industry both domestic and abroad, the thesis figures out a step-by-step strategy to enlarge the production capacity by stretching its value chain and setting up corporation alliances. It also suggests the municipality to build a coal price adjustment system to connect the prices of coal sale and raw coal together. The thesis also refers to the solution of the strategy implementation and risk control. The thesis contains seven parts. Part one gives an introduction to the background of the study, and the strategy theory. Part two makes an analysis of the operation status of the company. Part three observes the exterior situation of the enterprise to figure out its opportunities and threats. The fourth part digs out the interior resource and capability that are needed for the development of the enterprise. The fifth part makes out a development strategy through SWOT analysis, Critical Success Factors Analysis and Boston Business Portfolio Analysis. Part six illustrates the implementation of the strategy and its control system. In the last part, the thesis discusses some policy suggestions for the development of enterprise with commonwealth characters, and the possibilities of further study.Basing on the quasi-public goods, the thesis makes a comprehensive analysis on the challenges and the exterior situation of the urban coal gas company along with an in-depth research on the value chain and core competitiveness of the company. It composes a strategic planning for the company, and makes a brief analysis on the policy arrangements of public goods, which will be helpful to enterprises for public utility. The weak point of the thesis is the inadequacy of the competitive analysis on the costs of urban coal gas due to the inaccessibility of sample data.