Baosteel New Round Of Strategic Thinking

Bao Steel Group Corporation (Baosteel) is the most competitive steel producer in China. It engages in the production of high-tech and high value-added premium steel as mainline. Its steelmaking capacity is about 30m ton/a. It is now rank No.1 in China.In recent years, with more and more merger and acquisition activities occur in steel industry both inside China and in the world, the steel industry is entering a critical era. On the one hand, steel industry is gathering towards a few giant companies in the world. On the other hand, because of the high speed of Chinese economy, the equipment and technology level of domestic steel companies develops very fast. Their capacity grows tremendously. While the concentration ratio has been declining. Bao Steel's production capacity ration among domestic capacity has been declining from 12% in 1998 to 5.8% in 2007.In the face of internal and external competitive environment, Bao steel comes up with the strategic main line for the period of 2007 through 2012: production-scale expansion. The strategic goal Bao Steel pursues is to turn itself into a world-class public company worldwide, which owns independent IPR and powerful competitiveness and wins most of the social respects, and which is featuring "the most powerful steelmaking capability and the appropriately developed diversification", so as to become the elite of the Global 500. To gain this end, Bao Steel has set up such immediate targets: its comprehensive steelmaking competitiveness will get not less than the third place in the world steel industry and its ranking in the Global 500 will go beyond the 200th.Based on the analysis of the internal and external competition environment when Bao Steel makes its new strategy, this thesis analyses three key issues which may occur when an enterprise expands rapidly. It suggests Bao Steel should emphasize more on "be stronger" while pursuing "be bigger". In the end, the thesis comes up with its own measures to avoid these problems.