Research On China 's Development Strategy Of SK Oil

As China has developed into one of the most rapidly industrializing countries in the world, it successfully achieved remarkable growth in its petrochemicals and chemical fiber industry. It is no exaggeration to say that China has become the core country in the global chemical fiber market, providing the most essential raw material in textile production-Terephthalic Acid (shorten as TPA), situating itself as the biggest land of both production and consumption. Recently the global, especially the Asian TPA market has reached an era of a high concentration of new production facilities. However, heightened competition is evident in the TPA market, as the chemical fiber and textile industry began to face rapidly decreasing demands.The third largest business group in Korea, SK Group is involved in three main business sectors known as energy&chemicals, telecommunication&semiconductor, and marketing&service. Ever since China and Korea have established diplomatic relations in the year of1992, SK has been constantly increasing investment in China and actively expanding business cooperation between the markets of two countries, deeming China as its long-term target market.SK Petrochemical Co., Ltd (shorten as SKPC) is one of the main manufacturers in the petrochemical business fields in SK Group and produces EPTA and DMT, which are vital raw materials in manufacturing various chemical fiber products. SKPC mostly aims Chinese domestic downstream demanders as target market, but is about to face challenges from the rapidly developing domestic TPA suppliers of China, as well as those of the surrounding countries. The critical issue of concern now is how SKPC is going to maintain its competitive strengths and prepare to overcome such challenges in the industry.This paper provides a vast range of baseline information with the addition of the background research mentioned above, and scrutinizes the both internal and external environmental considerations of SKPC. It thoroughly analyzes the industrial circumstances of SKPC, as well as the internal resources that the firm holds. The paper applies tools such as the Michael Porter’s5Force Model and SWOT analysis in summarizing and evaluating its strengths and weaknesses, weighing the opportunities and threats in this business venture. It also provides the fundamental framework of the corporate development strategies in a viewpoint of Integration. As it proposes certain strategic applications, the paper offers thoughtful guidance for SKPC to undertake business strength and enhance corporate competitiveness, and achieve sustainable development. Hopefully, it can be used as a reference with which certain markets in the industry may utilize to establish practical strategies necessary for their growth and development.