Research On The Competitive Strategy Of CH Company

Since China’s reform and opening up, Chinese manufacturing obtains the unprecedented development, which has made tremendous contribution to the economy promotion of China. However, the most of our manufacturing was OEM,because of Chinese industrial foundation is weak. More specifically, the OEM enterprise does not have its own brand and market so that always limited by others, and what is even more important is that OEM forever in the lower end of the global product value chain. Especially the lately rapid increasing cost of labor and manufacture in China, an increasing number of Multinational Corporations take their OEM business to the Southeast Asia countries those with lower manufacturing costs, this is also the reason that cause the increasing pressures to survive faced by our enterprises.Therefore, how to construct the competitive strategy of OEM enterprise and make it stand in an impregnable position of fierce competition is a primary task of Chinese manufacturing development.CH Company is the research object of this paper, the company is located in Changsha city, Hunan province, and it was founded in March 2014. CH Company is a startup SMT OEM enterprise in the competitive SMT OEM industry. CH has introduced a SMT production line and configured equipments and assemblers from May 2014, which begins to run the OEM assembling and mounting of industrial camera for Japanese SE Company. However, the SMT OEM business has been in a deficit state during this year because of lack of orders from SE. Therefore, the situation of idle equipments and workers has always happened. This thesis is take a startup OEM enterprise which called CH as research objects, on the basis of corporate strategic theory, the PEST Model and Potter’s industry 5-Power Model are used in analysis of the enterprise external environment and the inter environment; what is more, using SWOT method to analyzing the competitive strategy. We can set up specific measures to implement the competitive strategies of CH through these analyses; and finally come to the conclusion and forecasts of the future research directions.According to the research, CH Company needs adopt cost leading and differentiation integral strategy in order to get enough clients and orders, and also develop its strength at the same time. To be precise, CH Company needs segmented market and differentiates the customer base to adopt different strategies. To adopt cost leading strategy to get enough orders for those customers who have bulk order and strict requirements for the products. Taking the differentiation competitive strategy for those customers who have small orders, high challenge, strict requirements and high price in order to develop CH Company’s advantage and meanwhile get generals profits.In China, there are a large number of SMT OEM enterprises that just like CH Company; they are still struggling in this critical area. Thus, this research paper could provide valuable reference to those same type enterprises when they are determining their competitive strategies.