Research On Strategic Transformation Of International Engineering Contractors From The Perspective Of Value Chain

With the in-depth advancement and implementation of the “Belt and Road” initiative,China's international engineering industry has ushered in major development opportunities.Both the volume and the influence of international contracted projects have scaled up fast,which has become an important support for the joint construction of the “Belt and Road”,an important form for contractors to “go global”,an important content of international production capacity cooperation,and an important practice for the win-win development with other countries.As the joint construction of the “Belt and Road” continues to advance toward high-quality development,international engineering industry also urgently needs strategic transformation and sustainable development.This paper mainly adopts a combined research methods of literature research,data analysis,comparative research,and case study to research the strategic transformation of China international engineering companies.Through literature review on value chain,strategic transformation and other relevant theories,the value chain and industrial chain of international engineering are described.The paper applies value chain theory to the strategic transformation of international engineering industry,and put forward the strategy of integrating investment,construction and concession.Through data analysis and comparative research,the paper summarizes the industrial development constraints such as insufficient profitability,low internationalization level,unbalanced market distribution and obsolete business model.To enhance core competitiveness,the industry needs to extend the value chain through strategic transformation of integrating investment,construction and concession.The paper uses China Railway Group Limited(CREC)as a case study.Through situation analysis,the problems in CREC's international engineering business are revealed.Business model needs to be upgraded,market structure optimized,enterprise resources integrated,profitability improved,and high value-added chain strengthened.Base on CREC's problems and the successful practice of benchmarking enterprises' strategic transformation such as ACS and VINCI,the integration of investment,construction and concession based on value chain theory is proposed as a strategic transformation direction for solving CREC's problems and leading future development.CREC actively explore the strategic transformation by integrating investment,construction and concession.Firstly,the overall planning of the whole project development process is emphasized.Secondly,CREC attaches importance to high value-added chain.Thirdly,the value chain resources are integrated to build an integrated industrial chain platform.Fourthly,the company's concession capacity is enhanced by building up a professional team.Fifthly,CREC realizes risk management and control of the project throughout its whole life cycle.Through project-level international engineering practice,CREC explored a strategic transformation path that suits the development of the enterprise itself.This paper concludes that the strategy of integrating investment,construction and concession is the direction of future strategic transformation for international engineering companies.Through this strategy,the industry participants can expand project scale,increase global market share,optimize industrial structure,improve profitability and improve international competitiveness.In the process of strategic transformation based on value chain theory,enterprises will enhance their weak links along the value chain,and strengthen key value chain links such as investment and financing,design and consulting,operation and maintenance.Various resources along the value chain should be integrated to ensure high efficiency and synergy.Mergers and acquisitions should also be explored to achieve a leap in the value chain.The proposed strategy in this paper will promote high-quality and sustainable development of China international engineering industry,and make positive contributions to practice the “Belt and Road” initiative and to jointly build a community of common destiny for all mankind.