Competitive Strategy Research Of SDTG Company

In recent 30 years, Chinese Civil Aviation Industry has been growing rapidly with the reform and opening-up policy. Airline networks have been developed increasingly and Airports’construction achieves great success. With the fast development of Chinese economy, civil aviation fleet of China and the volume of passenger traffic get about 10% increasing compound annual growth rate (CAGR). It’s a huge market with evident growing. At the same time, business jet comes hot which amplitude could be more than 15% per year. The stable progress of big passenger plane project enhances Chinese Civil Aviation industry clearly.As the extend part of Civil Aviation, aircraft maintenance (MRO) develops rapidly. China is on the top of this area. The CAGR of Chinese mainland will be more than 10% with the share of 25% from Cathy pacific Asia.SDTG, which major business is narrow-body aircraft’s maintenance, is located in Jinan, Shandong province and focus on extensive maintenance and engineering solution for middle& small aircraft in civil aviation, especially Boeing 737.Their incomes are mainly from the 3rd party customer and share the remarkable growth of Chinese Civil Aviation. The key indication data such as business scale and profit margin grows continuously. SDTG now has been one of the top MRO providers in Cathy pacific Asia. But now it faces some crisis, the fast growth labor cost, the decreasing of U.S dollar/Chinese Yuan exchange rate, saturation of narrow-body aircrafts’maintenance, etc. The trend of SDTG’s growth has been slowed down in the last 5 years. To catch the opportunities and face the challenge of operation, SDTG has to make the correct competitive strategy, which also is the basis of sustainable development to this firm in the future.In this thesis, writer makes general research with the external and internal data, using some common company’s strategies analysis tools such as PEST analysis, five forces model, SWOT, etc. Meanwhile, SDTG’s strengths and weakness, opportunities and threats are carefully guided. Advantages of SDTG concentrates on elements such as experiences on Boeing 737 narrow-body maintenance, lower labor cost in Jinan, leader of business jet engineering and maintenance. Disadvantages of SDTG are as the follows, product line is to narrow, service concept is weak, international business concentrates on Japan. And for the macro environment, there are some opportunities such as huge marketing and semi-monopolization. In parallel, threats are repeated construction and the increasing labor cost and so on. But in general, advantages and opportunities are obviously bigger than disadvantages and threats. According to the actual situation, value-added hinges of value chain are invested and finally the result is cost leadership focus strategy. SDTG should perform the cost leadership in its fuselage body repair as the major, meanwhile, focus on business jet and parts fabrication to gain excessive benefits.After that, practices and safeguards are given from the corporation culture, human resources, production control, sales and services, so as to the reference to help the healthy development of the company.Finally, conclusion and forecast are deduced. SDTG will develop and grow better in case of the correct competitive strategy are well performed.