A Study On Development Strategy Of LC Water Group Co.

Water supply is the basis of urban construction and development. With the development of economy and urbanization, the external environment the LC group faced has changed dramatically. The marketing process of water supply has brought both opportunities and challenges. Meanwhile, there are also some problems in industry management and business management which have hindered the enhancement of operation of LC water group. Therefore, it is important to analyze the external environment of LC water group comprehensively, evaluate the group’s internal condition objectively and study the group’s development strategy deeply so that LC water group can seize the opportunities, reduce risks, improve the efficiency, optimize resources and seek long-term development. Large numbers of information and data have been gotten through interviews and literatures. the methods of PEST and SWOT and the model of five forces have been applied in this paper to select the development strategy scientifically and to propose safeguards of the implement of the strategy.Firstly, the relevant theories are reviewed in this paper. The connation, hierarchical classification and management process of strategic management are summarized, especially the review of development strategy. It is the basis of the research on development of strategy of LC water group to sum up the previous relevant studies in detail. Besides, the strategic analysis tools are introduced briefly.Secondly, the external environment and internal conditions of LC water group are analyzed. The external environment supplies some opportunities. The development of Chinese economy is stable; the water market access mechanism is liberate; the support policies of water industry are promulgated; water market demands are increased; and the request of residents’ on water are enhanced. Meanwhile there are some threats in the external environment:the potential investment risks, increasingly fierce market competition, the existence of uncontrolled wells, increased labor costs, and the lack of water adjustment systems. Those factors are evaluated by EFE matrix, and the total weighted score of the factors is2.9, higher than the average weighted score2.5, which concludes the result that the external environment is conducive to the development of LC water group.The internal condition of the group is also the significant factors. The advantages of the water group including:rich reserves of high-quality water, operating experience of public utilities, good social image, leading level of water management, the monopoly position, sound operational network and service system. On the other hand, LC water group has some disadvantages. The scale of the group is relatively small; the economies of scale are not obvious; the industrial chain of urban water industry is imperfect; the operating permissions is partly missing; the strength of talent team is still to be improved. The above weaknesses constrain the development of water group to some extent. The evaluation of IFE matrix of the internal factors give the group2.8, higher than the average score2.5, which indicates that the advantages outweigh the disadvantages. So LC water group should make use of internal advantages.Based on the analysis of environment, combined with the development goals, adopted SWOT methods, the thesis designs alternative development strategies. By using the internal and external factors evaluation matrix, the conclusions are drawn as follows:LC water group would better choose SO strategy, which includes optimizing the layout of network, enlarging the coverage area, expanding the water supply market, improving the amount of water supply, establishing the service brand, and enhancing the social image. During the process of implementation, the group should continuously make up of the disadvantages and improve the competitiveness of the group. What’s more, the safeguards of development strategy are proposed involving industrial policy, culture, organization, human resources, security management and information technology.Finally, there are summary and outlook. SWOT method is the main methods this paper relies, and according to the research, LC water group should adopt a vertically integrated strategy and M&A strategy. But there are still some inadequacies because of limit of time, energy and documentation.In summary, the innovation of this paper is mainly involved in two aspects. The first innovation is putting forward the vertically integrated development strategy of LC water group. According to the analysis of environment and of quantizing matrix, LC water group chooses the strategy of "water diversion, water supply, waste water treatment and water reuse". The second innovation is raising new management mechanism of water supply which benefits the development of urban water supply, makes the price truly reflecting the operational costs, and effectively manages city-owned water wells. Based on the reality of urban water conditions, this paper proposes a new mechanism of the supervision and examination of water price.