Study On Development Strategy Of DFE Company

Since the "OPENING UP AND REFORM", the economy of china has passed the "SHORTAGE ECONOMY" to the "BUYER’S MARKET".During this process, there are more and more monopolists emerging from many industries.The power industry, especially the grid industry is considered to be natural monopoly industry.After three major reform, There are five state-owned power generator companies, two major Grid companies, and lots of power equipment producers in China (Mainland). The State Grid and Southern Power Grid are the two major players in china, they are all bilateral monopolist, especially the State Grid. They are the only buyer of the power generator, the only seller to the power consumers, and the State Grid has her own internal power equipment suppliers too. Be accompanied by the climax of the construction of the "Smart Grid", the State Grid wants to implement the "THE UNIFIED AND STRONG SMART GRID" strategy. The State Grid has merged two major power automation companies to complete her own internal power equipment supply chain. It has enhanced her monopoly and made things even worse for outer power equipment suppliers.DFE, the company which the author of this paper have been working in, is a power automation producer who without the background of power industry. In China, everything is linked to GUANXI, so without the background of power, accompanied with the continuously increased monopoly of the State Grid makes things harder.The purpose of this paper is trying to make a Development Strategy for DFE to cope with the environment, to live and to be prosperous in the future.By using the PEST analysis, Six Forces Module analysis, POWER SWOT analysis and Value Chain analysis, this paper has worked out a development strategy for DFE, the three main points of which is:the first is to sustain the market share in power automation market in china to maintain the company’s cash flow; the second is to implement the international development strategy to sell her low-cost and advanced power automation equipment to the merging and underdeveloped market; the third is to exploit the power-user-side market to reduce the dependence on the grid market.