The Research On Competitive Strategy For AB Company

AB is a limited liability company mainly producing a series of products such as blast furnace slag, micron ultra-active slag powder, special admixtures for high-speed railway track plate, etc. It was established in 2004, with the registered capital of＄1.5 billion Yuan, and was officially put into operation in January 2005. At the same time, AB is a joint venture under the control of state-owned legal person shares. After 7 years of rapid development, although satisfactory results have been achieved, in the face of gradually increased competition in the market environment, the operations management of AB began to exhibit many challenges. Prior to its listing on the stock market, AB is working on the analysis and feasibility studies so as to design competitive strategies suitable for its own development.The external opportunities that AB company enjoys are:the national industrial policy support, high market demand, adequate supply of raw materials, the increase of domestic rate of production equipment, the short supply of the overall industry, strong pricing power, no alternative threat, no leading brand yet in the industry, in line with new social concepts and values, etc. On the other hand, the company is in face of several threats such as, the cyclical nature of industry demand, high transport costs, small radius of sales, fluctuations in prices of raw material, new entrants of potential competitors.AB company's internal strengths are:relatively low transport costs, excellent production equipment, advanced manufacturing technology, adequate supply of raw materials, a competitive workforce, outstanding production management capability, healthy financial condition, high operations and management ability, good performance culture of the team, excellent executive team, etc. Meanwhile, the internal disadvantages of AB company mainly lie in the following aspects, weak R & D capability, weak purchasing power, lack of logistics capacity, and relatively weak sales team, and so on.Through comparative analysis, this thesis concludes that AB must adopt the overall cost leadership strategy to be able to gain super profits in the competition. For the overall cost leadership strategy to implement effectively, AB company should focus on the following areas:1. by building a corporate culture of cost leadership, the company should establish a centralized organizational structure; 2. the company should set up knowledge management system so as to improve its basic management; 3. the company should upgrade its human resource management through strengthening staff training and implementing targeted incentives; 4.the company should promote lower production costs through rapid expansion of production capacity, vigorous implementation of lean production, and pursuit of zero inventory and zero defect production; 4. the company should work on technological innovation of cost leadership through vigorous implementation of concurrent engineering and development of internal potential; 5. the company should upgrade its marketing efficiency through establishment of centralized and unified structure of sales systems, practice of successful cold calling to promote the sales, and vigorous skills training for front-line sales people; 6. the company should outsource the non-critical value chain, and 7. the company should establish strict control systems to ensure implementation of the strategy.This study not only helps foster the core competitiveness of the AB company to make it unbeatable in the fierce market competition, but also, with its conclusions, provides a model for reference and guidance for companies in the slag powder industry to develop their own competitive strategy.