A Study On The Classification Of Strategic Groups Based On Enterprise Value And Strategic Comparison Of Listed Companies In Chinese Automobile Industry

Michael S. Hunt coined the term "strategic group" in 1972; Porter defined it as an enterprise aggregation with the same or similar strategies in a certain industry in 1980. And now the strategic group theory has got rapid development.Automobile manufacturing industry is a fundamental industry in the world and it has developed quickly after the join of WTO in China. In 2003, China has become the 4th largest country of automobile manufacturing in the world and both the output and sales of vehicles were more than four millions. The aims of this thesis are the following: to identify whether strategic groups exist in Chinese automobile manufacturing industry, which is a highly market-oriented industry; whether there is difference in strategy formulation and strategy implement among different strategic groups, if exist; using strategic groups as analysis tools to give some advices to the different enterprises among strategic groups and Chinese automobile manufacturing industry.This thesis firstly uses Porter's five forces model to analysis the industry environment of Chinese automobile manufacturing, showing the mobility barriers; secondly, according to enterprise value could reflect the process of implementing strategies, this thesis uses a method upon enterprise value, which can be measured along the backward and forward directions, for strategic groups classification of listed companies in Chinese automobile manufacturing industry. The two measures can be taken as strategy variables. The residues got from regression analysis according to the CAPM model can replace the forward direction variables and the backward direction variables can be completed by financial ratio factors got from factor analysis. Then the thesis uses these variables to classify strategic groups by hierarchical cluster analysis, and compared to the actual situation and values of the residues and financial ratios among different strategic groups, the thesis finds the exact exist of strategic groups and the differences is significant. The thesis also finds out that formulation of business and corporate strategies, implement strategies are obviously different. Finally, the thesis gets conclusions and provides some advises to develop automobile manufacturing industry, including cooperation strategy with foreign companies, gaining core-competencies from essential technologies and brands.