Competition Analysis Of Chinese Steel Industry

Iron and steel industry is treated as basis of national economy in China and plays animportant role in China economy. The output has always been the NO.1in the world sincewe got the first place in the world. As a pro-cyclical industry, Industry developmentenvironment and industrial policies on the steel industry has a profound impac. From thisperspective of industry competitiveness, we studied the competitiveness of iron and steelindustry in bargaining power of buyer and seller, alternatives, barriers to entry andcompete in enterprises. Besides, we made comprehensive appraisal. At last, weexpounded the influence of risk on iron and steel industry.This paper used Porter’s five forces analysis to study on the competitiveness of ironand steel industry. We used the finance data of listed company in2012as sample andevaluated their performance on the angel of the finance index. Our study results were asfollows. Firstly, the number of enterprises in iron and steel industry was very large andtheir competes were fierce. At second place, the supply of iron and steel industry,upstream firm, had more power in bargaining. Thirdly, downstream firms had more powerin bargaining. Then, the potential entrants faced the great risk and the barrier entry washigh. At last, the threaten of the alternatives of iron and steel was small and it had notcome out so far. According to the comprehensive appraisal of the different enterprises, wegot chinese steel industry competitiveness draw with the world advanced enterprisesthere is a big gap. The steel industry there are certain risks There existed risk in thisindustry and got different influence in different degree. Considering the risk from themultiple perspective did good to avoiding risk and enhancing the competitiveness. In sum,the competitiveness of iron and steel industry in China was getting down as the result ofthe recession of the global economy and the more rigid regulation. Besides, the compete has been more fierce for that pressure from upstream and downstream got tremendous.