Research On Competitive Strategy Of China Tobacco Shandong Industrial Corporation

One of the sixteen China tobacco industrial corporations, China Tobacco Shandong Industrial Corporation (CS TIC), was founded in February 2004, reformed its management mechanism in November 2006 and has enjoyed steady and rapid development by attaching equal importance to reform and management. But recently company faced with the huge challenge because the commitments to the WTO and the challenges this brings and the pressure caused by the Framework Convention on Tobacco Control, and domestic enterprise merger. In order to obtain competitive advantage, the company should have specific competitive strategy.This paper analyzes and evaluates the macro-environment, industrial competition level, business ecosystem and internal conditions of CS TIC using PEST, SWOT, Michael Porter's Five Force Model and Business Ecosystem. It is concluded that in terms of environment we still have a political situation of stability and unity. Although the economy is changeable due to the influence of the financial crisis, the national economy maintains a stable growth momentum and China tobacco maintains continuous growth. The rise of tobacco control and people's growing health concerns demand high technology in the tobacco industry. The merger of domestic industrial enterprises have posed certain threats to CS TIC, and which exists in a business ecosystem made up of a series of elements such as the government, Tobacco Monopoly Bureau, Tobacco Company, opponents (other tobacco industry enterprises), Tobacco equipment supplier, Tobacco accessory materials supplier, Tobacco farmers, Cigarette retailers, Tobacco-related organizations, Smokers etc. AS for inner environment, the research show that CS TIC has the strength as advantages in scale, R &D, brand, manufacture ability etc. Furthermore the weakness owned by company is lacking in profitability, expensive products and market share outside Shandong province.To sum up, considering its mission, vision and strategic goals and guided by the basic theory of competitive strategy, Strategic alliance theory, Blue Ocean Strategy theory and Business ecosystem theory, the paper carried out a strategic analysis of CS TIC and finally decided on the strategy for diversification.To ensure the effective implementation of the strategy, the following action is detailed: 1. creation of a corporate culture which supports the strategy 2. increasing human resources 3. optimizing the supply chain 4. enhancing marketing capacity 5. more intensive research 6. developing brand strategy...