Research On Scale Expansion Strategy Of Company B

In the competition between companies in the same industry,larger companies tend to have larger competitive advantages than smaller ones.Larger enterprises can easily coordinate and integrate the product design and production process,expand product sales,and increase market share.And the enterprises with higher market share,with their scale advantage,can consolidate market sales channels,improve the product price control,and strengthen the control of itself in the industry.Meanwhile,larger companies have the advantage while negotiating with suppliers.After entering the 21 st century,display technology gradually changes from the CRT to TFT – LCD.Compared with the traditional CRT display technology,TFT-LCD display technology has the advantage of light,energy saving,excellent display effect,etc.As a result,traditional TV sets,monitors,laptops,mobile phones and other applications quickly turn to TFT-LCD technology.Because the TFT-LCD industry is high technology intensive and capital intensive,although China is the largest producer and consumer,the TFT-LCD screens mainly rely on import.The price of TFT-LCD screen has been high for a long time,which brings high pressure to the domestic companies,and the price of these high costs are eventually transferred to the consumers.According to the statistics,between 2005 and 2007,the import of TFT-LCD in China was ranked fourth,after oil,iron ore and chips.Main parts of the industry are enterprises from Japan,South Korea and Taiwan.In order to consolidate their competitive advantage,and strengthen their technology blockade in mainland China,the enterprise set all their manufacturing base in their mainland,instead of in mainland China.While there only exists several small TFT-LCD companies in mainland China,including company B.If domestic enterprises can rapidly carry out lateral scale expansion,take the advantage of domestic manufacturing and tariff policy,and expand production capacity,they will quickly occupied the domestic market,and solve the plight of the domestic display-enterprises.Overseas companies are vigilant against domestic enterprises,they are also clear that domestic enterprises' volume is temporarily small,once the scale is expanded,it will have great impact in their Chinese mainland market.So for new entrants like company B,the leading companies of the industry will take their scale advantage to make company B unable to survive in the industry.The management team of company B deeply aware that,they can't compete with overseas companies during the technology transition from CRT to TFT-LCD.To survive,they have to grow up quickly,and seize the market with their scale.At the same time,in the case that TFT – LCD mainly depends on imports,the domestic market has been in short supply for a long time,and the market expectation of the product is good.With the objective analysis of its internal and external environment,and the analysis of its resources and capabilities,company B thinks scale expansion strategy is in accordance with its own development requirement,and rapidly implemented scale expansion.After that,company B's gradually changes from a follower to the industry leader,and changed the TFT LCD industry market structure ultimately.Currently,company B has become the leading enterprise in the TFT-LCD industry,with the most market share.The main analysis tools used in this paper are PEST analysis,the porter force model,and SWOT analysis.Three analysis tools,which are the PEST analysis,five forces model of Potter,SWOT analysis,are adopted as the theoretical basis in this paper.The internal and external environment of company B before making the development strategy,the formulation and implementation of the strategy are analyzed in this paper,and it is hoped to provide reference for the development of similar enterprises in China.