Research On Competitive Strategy Of China Chengda Engineering Co.Ltd In The Coming 12th Five-year Plan

In the past eleven five-year plans, China has got a lot of achievements in all walks of life, which made her national comprehensive strength greatly increased, apart from that the average per capita GDP reached 3800USD. However, there are still some problems, such as unbalanced industry structure and people’s wealth problems and so on. Therefore, there will be two major changes in the coming 12th five-year plan, one is that the economic development mode will be more emphasized rather than the increase of economy only; another is that the strong power of China will not be more emphasized but people’s well-being. With the transformation of the economic development mode, China has started on the path to the transformation by adopting the energy-saving and environmental protection, new information technology, biology and advanced manufactural industry as its backbone industries, and regarding new energy sources, new materials and new energy automobile as her pioneer industries. In this prospective circumstance, considering it as a whole, China Chengda Engineering Co. Ltd (as Chengda hereafter), whose main business is to design chemical plants, would lose its main advantages in its backbone business and face all kinds of challenges. Nevertheless, Chengda would get new opportunities as well. Hence how Chengda changes its strategy to value the challenges and grasp the opportunities has become a vital strategic problem.On the ground of Chengda’s basic structure and main backbone business, the article analyzed the inner and outer circumstances, competitive environment, shortcomings and strongpoints of Chengda respectively by using the PEST model, the Five Forces model and TOWS model. The strategy by using the mode of contract for design-build is gotten from the analyses. The more details are as follows:The PEST model analysis:At present the world economy has not recovered yet, and the potential trade protection were severe. And all these made it more difficult for Chengda to step into the world; On the other hand, the world’s climate deterioration forces China’s enterprises to invest more in environment protection and severe production capacity surplus in many industries forces China’s enterprises to upgrade. So it is all these that force Chengda to change its strategy to match the change.It has been growing recognition that nowadays people’s concern about the environment is increasing and the government’s attitude on standardizing and supervising will determine and influence the environment and zoology of newly built projects. However, viewing from the standpoint of Chengda, that just left space for its development. Furthermore, the development and the use of the information technology made it possible for Chengda to have higher efficiency in its project construction.The Five Forces model analysis:The competence and conditions are considered by analyzing the strong or poor forces of the supplier, the buyers, the barriers to entry, the substitute and the rivalry of the enterprise. On the basis of analyzing those of Chengda, we know that the rivalry among the existing players is strong and the competition is intense, and the bargaining power of buyers is rising. But the bargaining power of buyers is not strong, the barriers to entry are high, the threat of substitute is not strong enough.The TOWS model analysis:The production capacity surplus in many industries, which narrowed the new project chance, and the world economic crisis, which slowed the investments around the world, were the main threats of Chengda. Meanwhile, the poor technological innovation ability and the vanishing competitive power are the main weaknesses of Chengda. Nevertheless Chengda has the following four advantages:(1).the result of Chengda being integrated by its parent company in 2009 reduced its competition among the brother companies. (2). the government’s policy encouragement on upgrade and the large-scale bring chances for Chengda. (3). the good invisible asset and managerial ability. (4). the rich manpower and the strong engineering ability.Based on the above analysis, there is no doubt that Chengda should take the contract for design-built as its important strategy in the next five-year plan so as to grasp the opportunities and slide over the threats. Taking this strategy could not only let Chengda make the greatest use possible of its managerial ability and engineering ability, but also band together the environmental and zoology protection in its engineering projects. A perfect example can be found in a successful urea warehouse contract for design-build project presented at the end of the article.The article analyzed the present and future circumstance in which an enterprise lies, then analyzed the inner and outer circumstance of an enterprise, competitive situation using the theories concerned so as to find out the strength and weaknesses of the enterprise, and finally led to the strategy of the development of the enterprise. It is meaningful in this way for an enterprise to grasp opportunities, change concept, have clear thoughts, maintain invincible in the future.