Research On The Strategic Development Of Privately-Owned Small And Medium Colliery

As coal constantly takes up 70%of China's energy consumption and is the foundation of China's energy security,it plays a critical role in the economic development of China.When China's 10th 5-year plan was launched 15 years ago,China's economy took off and energy was constantly in short of supply as China's energy consumption increased dramatically.At that period of time,characterized by reasonable price,high accessibility,and abundant preservation,coal soon fulfilled the market gap and the coal industry took off and started to enjoy its"golden 10 years".However,the increase rate of China's energy consumption has been constantly hitting the bottom.After its "golden 10 years",the coal industry has encountered such problems as over capacity and loss of enterprises.Particularly,the privately-owned small and-medium collieries are faced with the following dilemmas.First,because of over capacity and the market competition with foreign coal resources,coal price has plunged and thus the squeezed profit has caused financial losses in a large number of collieries.Additionally,as the government has initiated industrial consolidation and continuously increased the threshold of the coal industry,the majority SMEs are now faced with the risk of being eliminated from the market.Furthermore,many other respects have also blocked the development of the small collieries,including financing difficulty,outdated technology,and mining security issues.In this dissertation,the researcher first used PEST model to analyze how privately-owned small and medium collieries have been influenced by the macro conditions like economy,politics,social issues,and technology.Then,taking Shanshuping Mining Co.Ltd.for example,the researched analyzed the coal market in Sichuan Province,the current condition of Shanshuping,and then came up with its core competitiveness.Moreover,using SWOT model,the strengths,weakness,opportunities,and threats were analyzed,and based on SWOT analysis,its strategy goal and the corresponding development route was concluded.The main findings of this dissertation are as follows:1.Despite the fact that over capacity of the coal industry has caused oversupply of coal and thus has been forcing the price down,Shanshuping still performs well in the market for its high quality coal resources.Hence,it is reasonable that Shanshuping should be further developed,but on the other hand,the decreased profit rate necessitates the company to control and squeeze its costs.2.Shanshuping has encountered its bottleneck,as the government has stipulated that the threshold of coal-mining industry is 300,000t per year.Therefore,it is suggested that Shanshuping should increase its capacity to the threshold for further development,and Minli colliery nearby should be a proper option to be acquired.3.To come up to the over capacity of coal industry and deal with the newly increased production capacity of Shangshuping Mining Co.Ltd.,it can penetrate the downstream industry and thus to diversify its operation.If Shanshuping can establish cooperation with East Sichuan Cement Plant in the way of acquisition or franchising,not only its sales channels can be widened,but also its market competitiveness will be strengthened.4.With the coal industry staggering,the privately-owned small and medium enterprises in this industry have to put great emphasis on securing safe mining,upgrading technologies,and implementing modernized management.In short,to survive the transformation and upgrading of the coal industry,SMEs have to evolve themselves from all the dimensions,including mining process,sales,management as well as environmental protection.