The Research On Strategic Transformation Of Shenhua Group

Chinese economy is experiencing a significant change that high growth rate become less emphasized by government.Due to oversupply,Chinese coal price fell sharply in 2015,which led 90%of domestic coal enterprises to great losses,and a large number of small and medium-sized coal mine went bankruptcy.Survival has become the first concern of coal enterprises,which calls for imminent transformation.As one of the signatories of UNFCCC,Chinese government was committed to reduce carbon emissions.Suffering serious haze in winter,people living in Beijing-Tianjin-Hebei area paid more attention to environmental protection.The government issued new policy of energy evolution,which encouraged traditional fossil fuels to be replaced by renewable energy.Meanwhile,supply-side reform in steel,coal and other industries having oversupply problem went gradually active.Transformation turns out to be the only way for coal enterprises that expect to go further.Coal has been playing an important role in Chinese energy supply for a long time,exceeding 60%out of total fuel consumption.The unique energy resources structure in China,stipulated as "deficient oil,lean gas and rich coal",determines that coal will be the primary fuel for at least next 50 years.It is highly critical to make coal industry head for a promising direction,which means a lot to nation's energy security.Shenhua Group Corporation Ltd.(hereinafter referred to as Shenhua Group)is the world's largest coal dealer and the second largest coal producer,and the most representative coal giant in China as well.In the face of plight of survival and development,transformation has become a major issue for Shenhua Group to be solved.The factor that stimulates enterprises to implement strategic transformation is the change of internal and external environment.The aim is to obtain new competitive advantages and realize the sustainable development.Compared to forced transformation,voluntary transformation can lower the risks and more likely leads to success.Through the analysis of macro and micro environment at home and abroad,this paper comes to the conclusion of the necessity of Shenhua Group's strategic transformation,and then illustrates the feasibility of such transformation by using PEST?Porter Model?SWOT analysis tool.On the basis of studying sustainable development theory,strategic management theory,strategic transformation theory,and plus referring to existing experience of relevant enterprises in the same industry,the paper proposed two optional strategies for Shenhua Group,like Clean energy,Internationalization,and scheduled the basic implementation plan.The writer wishes what he proposed in this paper would also inspire the other Chinese fossil fuel enterprises.