The Study On The Core Competence Of A Petrochemical Company

The core competence is the basis of gaining the competitive advantage of acompany. Depend on government’s supporting policies, Nation-owned corporations,especially those are in monopolizing industry, operate and develop continually. In thetrend of economical globalization, these corporations need to establish their own corecompetence to face the serious competition. Petrochemical industry is one of themonopolizing industries in China, it is monopolized by three corporations, CNPC,SINOPEC and CNOOC. As the degree of economic openness are increasing, moreexcellent foreign corporations, such as Exxon Mobile, BP, TOTAL, SHELL andMitsui, enter Chinese market and participate in competing through establishingChinese-foreign equity joint ventures, their businesses are manufacturing and sellingproducts in refining and chemical domain. Due to these corporations have obviousadvantages in fund, technologies and management methods, these advantages wouldbring severe challenges to Chinese counterparts undoubtedly.A petrochemical company, one of the CNPC’s subsidiary companies in Refining&Chemical sector, is mainly responsible for refining crude oil and producingchemical products. In recent years, the operating index of A petrochemical companyranked far behind among subsidiary petrochemical companies of CNPC, particularlythe whole refining industry is in small profit and losing situation, refining as Apetrochemical company’s core business has huge deficit and indicates that thecompany are lack of the core competence to some extent.Firstly, this paper uses PEST analysis model to analyze the macro-environment,conclude that the good macro-economic situation will drive the petrochemicalindustry develop continuously, social and cultural factors along with technologyadvancement would bring challenges to the whole industry, the changes ofgovernment industrial policies will restructure the industry, relative governmentaldepartment enhances the supervision of the emission of the contamination and safety production will danger the companies in the industry. And then, through analyzing thecharacteristics of the industry, the basic background and the main competitors of theindustry and analyzing the competitive structure of the industry by using MichaelPorter’s five forces competition theory model, indentifies the key success factors ofthe industry which are more competitive business combination, risk-controllingcapability, comprehensive performance management, elevating the company’scompetence via improvement of human resource management and excellent operationability, from the external environment. Furthermore, by using SWOT analysis modelto analyze the strengths, weaknesses, opportunities and threats and applying the corecompetence identifying model to locate the key capabilities of the key nodes in thevalue chain through analyzing the value chain, assets, skills and knowledge of thecompany. Finally, identify the five core competences of the company which arecontrolling capability of energy-consuming cost, capability of reducing productinnovation cycle, capability of nurturing and reassigning human resource, operatingcapability of safe production and fast-learning ability.At the end of this paper, through applying the methods of Parenting Advantage,strategic alliance, capability internalization and organization learning to provide anurturing plan of the core competence of A petrochemical company.