Study On The Strategy For Steel Company "A"

At present, restricted by resources, environment, national macro-control and otherfactors, increase of steel market demanding shows a slowing trend. So the competitionamong iron and steel enterprises is growing sharply.Steel company A ranges13in steel industry. But it has had three successive yearsof profitability less than6%, with2010sales revenue profit margin is only5.41%.The reason is that the developing environment of company has significantlychanged. The raw materials supplements are determined by the market and itstechnologies and products have no strength among the industry. Additionally, theequipment of company A is impacted by national steel control policies thusadvancement of the equipment sees few possibilities in a short time. Moreover, its"centralized low-cost" strategy, which means the production is limited to the smeltingprocess instead of including raw materials basement and product basement, cannotmeet the need of competition of developed steel product chain. Therefore, strategictransformation is imminent for steel company A.The purpose of this research is to resolve the elements which impact thedevelopment of company A, such as the issue of raw material supplement,homogenization of product and technology and national steel control policies. We willanalysis its external environment such as general developing environment, operatingenvironment and industry environment, its internal environment including the profitcapacity, equipment level, structure of labor, and further research on the popularstrategies of sizeable steel enterprise such as integration strategy, diversificationstrategy and product differentiation strategy. And based on the above research we canconclude that company A has not been ready to diversification strategy, and hasdifficulties meeting all the demands of product differentiation strategy and thereforesuggest that company A should implement vertical integration strategy. And based onthat, we will come up with specific steps of practicing integration strategy. company Acould perform it‘s strategy in three steps: first step (to year2013) develop andintegrate resource, second step (to year2015) develop product quality and technology,third step (to year2017) prepare for company‘s detail management and competitiveproduct strategy.I hope this conclusion and research methods in this research have reference valueto the same type steel enterprise at home and abroad for the future with strategyresearch.