Study On Coal-Electricity Enterprises Strategic Alliance Establishment In China

Abstract:The coal industry and the power industry in China have closed relationship with each other. Coal is the major raw material used to product electric power for power plants, and the power plants also are the coal enterprises’the most important customers. They relied on each other heavily. Since2002when coal price is market-oriented, the conflict between the coal enterprises and the electricity enterprises has been becoming acute. At the coal ordering conference every year, the price of coal was difficultly negotiated by both sides. Since2007when the coal ordering conference had been instead of the coal transaction meeting, the government had not directly intervened the coal price at the meeting, but the conflict had not been solved or mitigated. At the same time, in order to mitigate the conflict, the coal industry and electric power industry raised up a flood of integration including the coal-electricity vertical integration and the coal-electricity strategic alliance. And the number of the coal-electricity vertical integration was more than the other. But the implementation of the coal-electricity vertical integration is limited by certain conditions, and the development of the coal-electricity vertical integration may be excessive. The coal-electricity strategic alliance as another kind of cooperation pattern between the coal enterprises and the electricity enterprises can also mitigate the conflict. So study on the coal-electricity strategic alliance is very important. So far, the papers which study on the coal-electricity strategic alliance, especially on how to format the coal-electricity strategic alliance for the coal enterprise and the electricity enterprise are few. The paper based on the realistic background of the coal industry and the electricity industry, and in order to solve the problems of the management of the existing coal-electricity enterprises strategic alliance, studies on the coal-electricity strategic alliance establishment, which is useful to manage and develop the alliance effectively, and mitigate the conflict.Firstly, the paper describes the realistic background of the coal-electricity strategic alliance establishment, which mainly analyzes the situations of the coal enterprises and electricity enterprises, the significance of the coal-electricity strategic alliance establishment, the insufficiency of the alliances which have been established and the reasons why the paper studies on the coal-electricity strategic alliance establishment, concludes the establishment of the coal-electricity strategic alliance is useful to mitigate the conflict and solve the problems of the management of the existing coal-electricity enterprises strategic alliance. Secondly, in order to solve the problems of the management of the existing alliance, the paper uses the theory of the coal-electricity vertical decision, concludes the elements which make enterprises chose the coal-electricity enterprises strategic alliance are the type of the electricity enterprise, the type of the coal enterprise, the distance between the coal enterprise and the electricity enterprise, the capacity of coal transport, the alliance contract completeness and the coal quality characteristics. Thirdly, in order to make sure the stability of the alliance, the paper puts forward the principles of the alliance establishment, including the voluntary principle, the principle of complementary advantages, cooperation and win-win principle and the principle of the alliance stability. Considering the existing conditions of the coal industry and the electricity industry, the paper puts forward the strong-strong union and one to one model of alliance establishment. The paper uses deferred acceptance procedure algorithm that is a method of the one-to-one matching game to complete the mutual choice of alliance partners and uses a calculation analysis. Finally, the paper summarizes the research results and prospects the future research direction.The innovation of the paper is that the enterprises can chose the coal-electricity strategic alliance from the perspective of costs and benefits which include transaction cost, organization cost, scope economies and vertical externality. And the paper firstly uses the deferred acceptance procedure algorithm that is a method of the one-to-one matching game to complete the mutual choice of alliance partners, which makes the alliance stable.