Research On Development Strategy Of GS Thermal Power Engineering Company

In recent years,China’s electric power industry is in a period of structural adjustment.Because of slower economic growth,the reform of power supply and demand,it has become a consensus that forces electric power industry to develop clean energy and reduce coal and other fossil energy.In the beginning of 2017,the National Energy Administration issued a document which asked for the suspension or postponement for construction of a number of coal power projects that totally about 176 million kilowatts.On the other hand,the government encourages the development of clean energy like wind power and photovoltaic power generation.However,there are some difficulties of integrating constructed wind power stations or photovoltaic power stations with electric grid and also some problems due to unsold electric power.Although domestic electric power construction market begins to shrink,the demand for electric power is still growing in developing countries for a long time around the world.Our nation promotes the "Going out" strategy and the strategy of "One Belt and One Road" to resolve the problem of production overcapacity.That will provide a development opportunity for electric power construction enterprises in our country under the condition of the fierce domestic competition.Gansu Thermal Power Engineering Co.,Ltd.(hereinafter called “GS”)is a third-level subsidiary of China Energy Construction Group Co.,Ltd.It is a grade A large-scale thermal power construction corporation with more than 10 qualifications including General Contracting Level-Ⅰ Qualification for Electric Power Engineering Construction,Specialized Contracting Level-Ⅰ Qualification for Hoisting Equipment Installation,Level-Ⅰ Qualification for Boiler Installation,Alteration & Maintenance.As the policy adjustment of the traditional electric power market in China,situation like "Shrinking Thermal Power,Declining Photovoltaic Power and Confusing Wind Power" has come out.Many thermal power projects contracted by GS are also in a state of "Stopped and Suspended",resulting in a sharp decline in both company’s overall market development and operating income.At the same time,because the company just started new business model projects in the recent two years,the company has no experience in risk prevention and operating management control ability.Thus,it does not only occupy a large amount of the company’s cash flow.It might also cause the risk of cash flow rupture at any time and the company’s asset-liability ratio will be as high as 97.45% adverse situation.By the end of June 2019,the market development for GS company has only completed 32% of the annual target while the operating income has only completed 39% of the annual target.A large number of construction personnel are on leave and the company’s outstanding talents of management are also going to employ the higher-level job or other subsidiary in the group causing serious brain drain of the company.At present,GS Company’s development is in an unprecedented difficult period.How to solve the lack of projects,lack of funds,lack of talent,expand the market,strengthen management,build the company culture and any other issues? Those problems will be the barrier for the company to develop.Therefore,it is of great significance to study the development strategy of Gansu Thermal Power Engineering Co.,Ltd.GS company as the research object in this paper,its exterior macroscopic environment and industry environment will be analyzed by using relevant strategic management theory,the PEST model and other five competitiveness models.The external environment and internal condition will be evaluated through external EFE matrix,IFE matrix.Based on the analysis and evaluation of the internal and external environment of Gansu Thermal Power Engineering Co.,Ltd.,SWOT analysis and quantitative QSPM matrix will be used to select and analyze the company’s best development strategy which is suitable for the implementation of diversified development,international development,transformation and upgrading development.At the same time,the company could take the best option from alternative corporate development strategies and establish measurements to ensure the strategic development formulated.Those measurements are optimizing the internal organizational structure of the enterprise,strengthening the construction of the enterprise’s talent team,strengthening the strength of market development,and improving the risk prevention and control ability.