Research On The Competitive Strategy Of JG Textile Company

Recent days have seen the significant progress made in the domestic social and economic construction and transformation in the mode of national economy development. Under such circumstances, the textile industry, as one of the dominant industries in the globe, continue to play an important role in China’s GDP growth as well as economic and social development. Since the beginning of the21st century, with the process of globalization and the rapid progress of technology, the textile industry is confronted with new challenges and opportunities. With the support of the relevant state industrial policies and the industry integration, the textile industry has formed an industrial system, including raw materials (cotton, silk for instance) processing, clothing, household and industrial terminal products. With the continuously rapid growth and the substantial increasing exports, the textile industry contributes a lot to creating jobs and promoting the development of Three Rural Issues-Agriculture, Countryside and Peasant. In2008, the international financial crisis has exerted substantial bearings on China’s textile industry, which was stuck in greatest trouble ever since with the imbalance between supply and demand, difficulties in business management, enlarged deficit, less job opportunities and unstable cotton price. Since2009, with the theme of "maintaining growth, expanding domestic demand, and adjusting the structure", the government has provided the textile industry a more relaxed domestic development environment via taking a series of macro-control policies, freeing the industry from the trouble the latter half of2008. In2011, as a result of the slump global economic recovery, credit crisis in the United States, the European Union and other major economies, the reduced rebound force of consumer demand as well as other factors, the export growth of China’s textile product will continue to be restrained. In addition, the RMB appreciation also impacted the relative competitive advantage of China’s textile product in the international market. Meanwhile, a higher textile fiber cost and labor price, together with difficulties in recruitment, are still the factors that impede the development of the textile industry. In such macro situation, a scientific and clear competitive strategy can play an increasingly critical role in the scientific development of the textile enterprises.JG Textile Corporation, mainly engaged in the yarn business, is the spinning link in the entire textile chain. The corporation was restructured from an old state-owned enterprise. Although it did gain some achievements through the establishment of internal management system, the introduction of advanced equipment, the adjustment of product structure and the widened marketing channels, its competitive position is declining, which is attributable to the increasingly fierce market competition in recent years and the changing internal and external environment. However, the corporation has never studied the corporate competitive strategy systematically. Therefore, this essay introduces a comprehensive study on the overall feature and the management environment of textile industry as well as JG’s internal environment by means of the relevant theories and methods of competitive strategy after collecting a large amount of data. Then it concludes the competitive advantages and disadvantages of JG in its operating, relocates the corporation and puts forward the competitive strategy which meets with JG’s competitive position and promotes its scientific development. So that, it can be ensured that the company could calmly deal with the increasingly fierce market competition, consolidate its competitive advantage and rebuild its market position.The topic of this essay is the competitive strategy of JG Textile Corporation, whose main business is yarn production. With analysis tools such as SWOT, PEST, industry structure analysis, Michael Porter’s Five Forces Model, this essay analyzes the firm’s external environment, internal advantages and disadvantages and elaborates the establishment and selection of the cooperation’s competitive strategy according to the theories on competitive strategy management. Thus, JG’s competitive strategy is determined, that is to adopt the differentiation strategy in order to gain its competitive advantage. The study result is based on the scientific analysis of a large amount of first-hand data, objective and truthful, which is expected to help with JG on its strategic decision and also provide useful reference to other corporations of textile industry.