Electricity Metering Business Strategy Research For L Group China Subsidiary

In China,for a long time the electric power industry has been operated by the state monopoly.Since the 80's,in order to solve the problem encountered in the marketization process,China began to introduce electric power system reform gradually.In March 2015,a new round of reform has been launched,in which to introduce competition on the electricity vending side to break monopoly was first put forward.L energy metering group(L group)is a global leader in the energy metering industry,as early as in 1990's L group started to set up wholly-owned subsidiary in China(L China subsidiary)to run electricity metering business.At present the company has established complete capability in terms of R&D,production,sales and services in China.Since 2009,as the State Grid Corporation of China and China Southern Grid started to implement the centralized bidding with unified product specification,L China subsidiary gradually lost its competitive advantage in the mid-end and low-end market,as well as its market share,thus got trapped in critical situation.Under such circumstances,this paper targets the research problem as: under the new situation what business-level strategy should L China subsidiary take for its electricity metering business to gain new competitive advantages,and to achieve growth.In this paper the author conducted in-depth research of L China subsidiary,collected comprehensive data and engaged stakeholders such as the executive and middle-level management team of the company,industrial experts and customers for in-depth interviews,based on which the strategy framework of Michael Porter was applied,the external and internal environment of the company were analyzed,and a strategic combination of differentiation leadership positioning and strategic alliance were put forward.Through the study it was concluded that:Firstly,the root cause of the business decline of L China subsidiary lies in its lacking of capability to enter the centralized bidding market of power grid companies.Secondly,it's proper for L China subsidiary to utilize the strategic alliances to enter the middle-end centralized bidding market,and to deploy in the gradually forming AMI market.Thirdly,under current situation it's proper for the L China subsidiary to continue its differentiation leadership strategy.Through the study of this paper,it's intended to provide reference for L China subsidiary to turn around the declining business in the fierce domestic market competition,defend the existing market share and obtain competitive advantage in the emerging market.This paper can also be referenced by the equipment manufacturers who aim at the growth of China smart grid business.