China's Steel Industry Competitive Environment Study

The steel industry is closely connected to the sustainable and harmonious development of China's national economy. Trough several decades' development, the steel industry of China has already held place in the world, however , the enhancement of the competitive capacity met some obstacles in the meantime. Therefore, it has specially important realistic meaning that researching the competition environment of steel industry to analysis the factors which restrict the development of steel industry in China.On basis of "Five Forces Model", which presented by Porter, the text carry on analysis about the competition environment of the steel industry. by study ,we can find that The steel industry is a industry with very obvious economics of scale characteristic and closes with the upper stream and the downstream industries ,especially , the supply price of the iron mine made by upper stream industry restricts the development of the steel industry .The steel industry of China has lower industrial concentration, the quantity of the enterprise with advantage from economics of scale is the minority , the structure of products is unreasonable .In resent years , the industry undergone the threaten form upper stream industry which supply iron mine ; steel market in the world has faced excess of production .Therefore steel companies must adjust the structure of the industry acceleratedly to enhance the benefit of the profession . Besides, the government should adapt it to make a good competition environment.This article is composed of five parts. The first part is an introduction that mainly tells us the background and the reality meaning about the title choosing .The second part reviews and comments on correspond theories simply. It mainly introduces some theories about competition, oligarch monopolization market structure and the price leader mode, and introduce "Five Forces Model" out of Porter--present competition strength, substitutes ,power of buyers ,power of providers , the five powers made up the environments of the competition . The third part then with "Five Forces Model" for frame, describes competition state of steel industry in China, it's to say what is the five powers, and how they affect the degree of the competition respectively; The part four carries on analysis to the problem in the competition environment of steel industry, mainly analyzing the lowly industrial concentration ,unreasonable product structure and how the upstream material supplier controls the industry price of original material etc.The fifth part then faces according to the competition environment and the influences put forward strategies , on one hand the business enterprise should adopt the strategy behavior-horizontal M&A ,strategic alliance, vetical integration , on the other hand, the government should adopt appropriate of industry policy to construct the good competition environment for the steel industry .