| As one of the pioneers in entering the international construction market in 1979 along with China's adoption of the policy of reform and opening to the outside world, ZhenHua Corp. has, over the past 23 years, become a diversified, multi-operational company, which mainly undertakes the overseas construction project contracting together with the real estate development and hotel business. ZhenHua has, up to now, achieved a relative strong position in the marketplace. It has been listed among the 225 top international contractors by the famous U.S. magazine "Engineering News Record" for many years.But, just as many state-owned enterprises in China and due to the influence by the restriction in system and the traditional operating model, ZhenHua failed to make careful and realistic analysis for the future development, which resulted in lack of foreseeing business strategy in its overseas construction project contracting business. In general, ZhenHua showed a great degree of randomness and blindness in its strategic choice of its business development orientation. It also failed to take effective measures to maintain and strengthen its competitive advantages and overcome or eliminate its weaknesses.In recent years, the company found itself losing competitiveness in overseas construction project contracting business, which led to the company's sharp decline in profits.The paper aims at making efforts to work out a specific strategy for ZhenHua's overseas construction project contracting business by using the theories and methods of Strategic Management. The author hopes that the strategy will help ZhenHua form a sound "fit" between its internal capabilities and external situation.The paper is composed of five parts.In the first part, the author gives a quick overview of China's overseas construction project contracting industry, identifying its characteristics and describing by comparison the gap in strength between the international contractors in China and their competitors from the developed countries. Detailed investigation of ZhenHua's overseas construction project contracting business helps review its past performance and show the clear picture of its current situation.In the second part, the author expounds the external environmental factors and lays emphasis on the analysis of the industry's structure and the comparison between the individual strategic groups.In the third part, the author carries out the appraisal for ZhenHua's performance in 2002 and points out that ZhenHua's financial situation is threatened by comparison with its past performance and the industry's average ratios. This part also thoroughly analyzes ZhenHua's advantages and disadvantages for its overseas construction project contracting business.In the fourth part, the author analyzed the internal strengths and weaknesses of ZhenHua and the environmental opportunities and threats facing the firm by using SWOT analysis method. The conclusion is that ZhenHua's current strategic position is located in quadrant II of SWOT analysis diagram, i.e. a firm faces impressive market opportunities but is constrained by internal weaknesses. Theauthor suggests that ZhenHua should choose a turnaround strategy to improve its internal conditions so as to match the huge opportunities more effectively in the future. According to the conclusion, the author outlines the orientation of the future development of ZhenHua's overseas construction project contracting business.In the fifth part, based on the analysis and evaluation in the previous four parts, the author puts forward a "two-step" strategic thought to guide ZhenHua's overseas construction project contracting business. At the end of the paper, the author also discusses about some critical issues for the implementation of the chosen strategy, such as the formation of modern enterprise system, the core competitiveness development and the financing innovation.The author believes that the research made here is not only of great value to the future development of ZhenHua's ov... |
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