The Study Of Differentiation Development Strategy And Management For Cheng Da Company

Strategy plays the role in planning and guiding in battle or competition and it focuses on all-around, long-term and basic situations. In fact, every enterprise has its own enterprise strategy. Effective enterprise strategy can lead the enterprise to understand the surrounding situation, to analyze and solve problems, and to invest limited resources to the right place so as to make the enterprise stand in the advantageous place in the competition. In consequence, the enterprise strategy values a lot for the basic business of enterprises to remain vitality. Based on the practical situation of the ChengDa Company,this paper starts with the analysis and choice of the enterprise strategy.It then talk about the implement of the strategy applying in the enterprise management to analyze the discrepancies between the current management system and enterprise strategy. Besides, the improvement suggestion is put forward.The ChengDa Company was established on the basis of the former name "the Eighth Design Institute of the Ministry of Chemical Industry". During its over 50 years’ development, it has undergone three transformations, namely,the transformation from the design institute to the engineering company initiatively in the domestic industry, the transformation form serving the single chemical field to the whole engineering field and the transformation from management of technology to capital management. By the transformation of the management and the expansion of the service, the company’s business performance is rising ceaselessly. In 2012, the company’s operating income is the highest compared with its peer enterprises. In this process, ChengDa also win a good market reputation with high quality service. So many banks and financial institutions confer ChengDa high credit rating. In technical aspect, ChengDa Company is an advanced and new technology enterprise in Sichuan province. It sets up the enterprise technology center recognized by Sichuan province and has a postdoctoral research stations and an academician workstation. ChengDa has become outstanding among its peers in the domestic industry.In recent years, with the development of the domestic and international economy, the domestic Engineering survey and design industry has undergone rapid growth. The proportion of Engineer-Procure-Construct and project management is larger and larger, and at the same time, the turnover of domestic engineering company in the overseas market has also been increasing year by year. The development of economy brings more and more opportunities to the construction industry.On the other hand, the development of the industry in return also brings the market increasingly fierce competition. Consequently, the profit margins of the industry are in general not high. At present, the opponents of Chengda including the large engineering company, the private engineering company, foreign engineering company and so on, the different types. This kind of competition exists not only in the domestic markets, but also extends to the foreign markets. According to the new environment, ChengDa company should formulate corresponding enterprise strategy, and treat it as the guidance in the company’s operation and management.The author uses SWOT(Superiority Weakness Opportunity Threats), that is, through performing comprehensive analysis of the advantages, disadvantages and the external opportunities and threats of ChengDa company,to study what direction of enterprise strategic Chengda Company should take.The internal advantages of ChengDa include: rich project management experience,reliable engineering quality, numerous talents, technical advantages in some products and the good reputation in the market.The external disadvantages of Chengda include: complex management system, high project execution cost, insufficient original technological innovation ability,heavy enterprise burden and limited financing ability.The external opportunities include :large room for emerging project in domestic market and less developed countries.The external threat include: intense competition and disordered competition in the domestic market, standing in a dilemma in the foreign market.Through the analysis, it is believed that currently the advantages of ChengDa outweigh the disadvantages and the opportunity is larger than the threat. So it is concluded the basic enterprise strategic direction that "the ChengDa company still should rely on its advantages to development at present".When it comes to choosing the specific development strategies, three basic strategies proposed by Michael Portor was discussed, they are the overall cost leadership strategy, differentiation strategy and focus strategyFrom the article,we can see that the fierce competition and generally low industry profit margin make the cost leadership strategy inconsistent with the company’s characteristics and the competitive market environment. Meanwhile, from the development of the industry trend, focus strategy is less capable of resisting the market risk. The company’s core competitiveness lies in the project management level and technology, and human resource advantage. Combined the enterprise’s actual situation with the surrounding environment, the company should choose the differentiation strategy as their development strategy.In the second half part of this paper, the author mainly discussed the implementation of the differentiation strategy in the management of the company. The author introduces and analyzes the current project management system of the ChengDa company in the following four parts:1. In the organization structure part, the author discussed the current matrix management system of the ChengDa company. The author, through introducing the adjustment process of the matrix management system of the company in the recent days, talks about the operation mode of the matrix management and project and attaches importance to coordination and integration between projects and between projects and professional sections.2. In the resource management part, the author introduces the current resource allocation mode of the company and analyzes the shortcomings of resource allocation in the current management system. It shows as follows: firstly, the resources integration between project is not enough; secondly, the projects have not promoted total cost accounting; thirdly, project human resources are not included in the project cost and it cannot be effectively controlled.3. In the work flow part, the author analyzes the operation mode and advantages of the line type working flow of the ChengDa company so as to discuss the defects through the practical examples.4. In the employee evaluation mechanism part, the author introduces the newly adjusted employee evaluation mechanism of the ChengDa Company.In the following part, we will discuss how to implement the differentiation strategy from the project management aspect as well as the technological innovation.In the project management, we discussed from four aspects of quality, schedule, cost, and flexibility to adapt to the market, and besides, according to the characteristics of the company, we take the quality and schedule as the key in the project management to reflect the differential control objectives. According to the control of quality and schedule, we introduced our progress in the standardization, and discussed some factors which are negative for the design quality in the present project management system though the actual cases. The article says that the quality and schedule of the project implement is the comprehensive reflection of the company’s project management level and technology resource advantage, and also the goal of refecting our service differentiation in the market competition. So we should focus on the quality and schedule of the project implement in our internal operation managementMeanwhile, the paper also puts forward that controlling quality and the rate of progress values a lot does not mean the company can ignore the project implementation cost and the flexibility to adapt to the market. In the premise of meeting quality and progress, the important goal of the company should still be control the project cost and budget.And the control system is an effective way to reach the goal. The implementation of the project total cost budget is the developing direction of the project budget. The paper also discussed the huge profits that the flexible response to the market will bring to the Chengda Company with examples. It also illustrates the flexibility to adapt to requirement of the market is an important demand for the company.In the part of technology innovation management, the author points out that the innovation is the driving force for the enterprise to implement differentiation development strategy and discuss the technology innovation management in five parts:1.The author discussed the understanding of enterprise technology innovation with some examples and then points out that the enterprise technology innovation is not only in the technical level, but also exists in the market level, which means it is the combination of both technology and market.2. The author discussed the three types of technological innovation, namely, original innovation, followed innovation and integrated innovation. When it comes to ChengDa characteristics, the author thinks that the company should lay emphasis on the follow innovation and integrated innovation.3. The author introduces the organizational structure of ChengDa technology innovation management - enterprise technology center.4. The author introduces and discusses the operation mechanism of ChengDa technology innovation management.5. The author analyzes the shortcomings of ChengDa’s technological innovation management and then proposes some Suggestions for improvement.At last, the author advises building a novation contract based on the differentiated development strategy, which includes two core contents:one is to implement the people-oriented management mode; the other one is to adjust on how to establish the mode of project management, which means to construct the pyramid project management pattern above the existing matrix plane management, to coordinate and integrate between projects and departments, from which to improve the whole company resources utilization ratio and project execution efficiency. The paper gives three suggestions to the multi-project management pattern:Strengthening building program group to realize sharing technique, experience and experience inheritance between new and old staff; Distinguishing the key resources and making them of the key control, in order to prevent it from being the bottleneck of multiple project execution; Paying attention to transferring of the information and establishing two way multi-channel information system in order to improve the quality and speed of information transmission. In order to better realizing the resources sharing and improving the work efficiency, the paper puts forward of further work standardization which is the use of network technology to establish the idea of collaborative working platform.