Study On The Development Strategy Of Shanxi Tianze Coal Chemical Industry Group Co. Ltd.

Shanxi Tianze Coal Chemical Industry Group Co. Ltd. is the largest urea manufacturer in Shanxi province, and its production capacity accounts for more than one fifth of the total amount in the province, which made it ranked among the domestic advanced coal chemical fertilizer industry. But at present, due to the excess capacity of domestic urea production and its relative low prices, economic benefit and prospect for development of one coal-made urea enterprise, whose production lacked structural diversity, have been negatively affected. Meanwhile, due to the characteristics of China’s energy reserves of rich coal and poor oil-gas, petrochemical energy such as oil and gas depends on importing for a long time. In order to reduce our dependence on foreign energy, safeguard our energy security and reduce energy supplying risk, moderate development of new coal-based chemical industry to achieve a partial substitute for petrochemicals, has a very important strategic significance.Therefore, analyzing Tianze Co. Ltd.’s business running status and its own advantages comprehensively, working out a long-term development strategy, and seeking a more advanced and optimized development path actively, consequently the business scope would be expanded widely and deeply. Moreover, an industrial structure with higher risk resistant capability would also be built. And all these measures can have profound influence on Tianze Co. Ltd.’s unceasingly growth in the near future.Based on the theory of strategic management and competitive strategy, the paper applied various research methods, such as literature research, field research interviews and so on, focused on the current business situation of Tianze Co. Ltd. And several analytical methods or tools have been used:for instance, the PEST analysis, the Five-Forces model, and the SWOT analysis, therefore the policy and market environment on which the business strategy was based, the competing condition of other counterparts in the same industry, and the enterprise’management skills and its techniques have been analyzed thoroughly. The main advantage of this company lied in its reasonable corporate ownership structure, relatively good management skills, cost advantage, popularity of its brand and market share. Nevertheless, the company’s shortcomings mainly included that its chief products with a single type, excess capacity of urea production in domestic market, the tapering profit margins, a disconnection between the company’s management due to aging and so on. And the main opportunities this enterprise faced now included low price of raw materials such as coal, the absolute demand for urea products in the long run, and the increasing need for related fine chemicals in domestic markets. Besides, the primary challenges are the competition from both domestic and foreign counterparts, environment protection and the mounting pressure on carbon emission reduction, the dominant position of petrochemicals and so on. So on the basis of the comprehensive analysis above, the paper worked out a development strategy, which advocated the"coal joint chemical group, stable fertilizer transfering to chemical, transforming and upgrading, and developing in multiple fields", and some implementation measures have been put forward according to the development strategy, including exploiting the advantages of management to the full, attaching great important to talent training, broadening financing channels, strengthening technological innovation, and expanding marketing system. Finally, the paper proposed that the company should evaluate the implementation effect of the strategy and get feedback in a dynamic situation.