Research On Competitive Strategy Of Large State Construction Enterprises In China

With China’s rapid economic development, the number of construction enterprises in recent years has achieved rapid growth. Since the homogeneity of construction industry, low barriers to entry, competition in the industry over a long period is extremely fierce and corporate profits tend to be thin. Even more alarming is that among the best of the construction companies in the country, most have generous state-owned assets, advantages of industry or local protection, in varying degrees, enjoying the "power subsidies".it seems fairly strong from the appearance, but in fact it is probably "paper tigers" at risk. The robust body is not as perfect as their outward appearance, most of them may lack the capacity for sustained development and core competitiveness.At the same time, large state-owned construction enterprises are facing increasingly tough competitive environment. Since the accelerating opening of domestic construction market, the international construction giants actively take actions and is being or for participation in the domestic construction market; the state-owned construction firms are also facing the "going out" option. Together with more regulation and supervision on the market, the large state-owned construction enterprises have got being squeezed by multiple factors. As to most state-owned construction enterprises themselves, for their operation in the capital, management, personnel quality, performance and other aspects of the industry cannot match with foreign rivals, even with the private construction companies compete with clearer property rights and more flexible management mechanism. A number of state-owned construction companies will have to face the loss of, or even the pressure of being eliminated. Any large state-owned construction enterprises which wish to survive and, even more, to seek further development, must choose its own competitive strategy adapted to the conditions. Therefore, large state-owned construction enterprises should take every effort to build core competence, which is related to the pressing problem of the survival and development. And the essential step is choice of the competitive strategy in accordance with the enterprise’s setting.This paper mainly focus on large state-owned construction enterprises in China’s competitive strategy describes the choice of expansion, which attempts to answer the question,"In current complex and uncertain market environment, how and what should large state-owned construction companies of China to do to gain unique and successful competitive strategy?"In comparing their own characteristics and competitive strategic basis, the paper comprehensively analyzes and summarizes the development trend of the international construction market, the lessons and experience of internationally renowned large construction companies, and the goal and position of large state-owned construction enterprises in China. Based on that, the paper points out that the large state-owned construction enterprises should choose vertical integration strategy to enhance its international competitiveness. The successful implementation of vertical integration strategy requires a thorough analysis of industry value chain and core business process reengineering, in addition, the strategic goals also need to support the appropriate organization and management, including organizational restructuring, strategic control and corporate culture to enhance innovation. The author hopes that these measures can contribute to the transformation of competitive strategies of the large state-owned construction companies.