China Huaneng Group Strategic Research

A company's strategy consists of a set of competitive moves and business approaches that management is employing to run the company.A state-authorized investment entity and a state-holding corporation, China Huaneng Group (CHNG) is a major state-owned enterprise approved by the State Council, whose business scope of CHNG mainly covers the following areas: energy-related investment, construction, operation and management. Since the establishment of CHNG in 1985 and up to 2003, CHNG has made remarkable contributions to the national economy and to the reform and development of the electric power industry in China. Today, energy market in China is huge and rivalry among competing energy enterprises is intensified. Now high-raking managers of CHNG are considering how to maintain company's competitive advantage as an industrial leader and how to locate new profit-making points.For achieving CHNG's objectives, it is of paramount importance for CHNG to craft a corporate strategy and the author puts forward the following steps. Firstly, making an industry and competitive situation analysis of CHNG by using a key analytical tool (Porter's Five Forces Model) to identify main sources of competitive forces and strengths of these forces. Representing the first letters in Strength, Weakness, Opportunities and Threats, the SWOT Analysis is a useful tool to evaluate company resources and competitive capabilities. Through SWOT analysis, the author identifies CHNG's Strength, Weakness, Opportunities and Threats in addition to CHNG's finance conditions.Secondly, the author formulates CHNG's corporate strategy of power generation and development by using such tools as SWOT Comparison method and GE's nine-cell matrix. Finally, the author discusses how to execute CHNG's corporate strategy by adopting the Balanced Scorecard method.