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With the boosting development of economic globalization, the large-scale worldwide economic structure is adjusting. Since China joining into the WTO, many Chinese enterprises should face the rapidly growing challenges and opportunities under the competitive environment. After the 'Lenovo 'purchasing the 'IBM ', the'CNOOC (China National Offshore Oil Corporation)' purchasing the 'Unocal Corp' of the United States, and large number of enterprise mergers and acquisitions. The world realizes that the Chinese Enterprises are rising sharply and we are proud of the international competitive multinational enterprises appeared.
But, today, the market environment of China has been changed , the majority of enterprises due to lack of strategic consciousness, which like a ship lose the direction, it become too hard to face the external challenges.
The lifetime professor Michael Porter from Harvard business school said that enterprise strategy is the key to success (Michael. 1996). Enterprise strategic management is the most important part in the enterprise management, if you want have a successful enterprise, you should understand what is it and know how to implement it to make a better development of company. So, the direction of enterprise strategy will affect the whole prospects of company. Whatever in study cases or practice processes, the research of enterprise strategy and organizational structure is occupied a very important position. In the background of economic globalization, the enterprise will face more intense competitive environment. (Pearce & Robinson 2011)
The overview of enterprise strategy
At first, we should know what enterprise strategy is, broadly speaking----it includes enterprise intention, enterprise goal, enterprise strategy and enterprise policy. In fact, it just has two basic characteristics: prospective and subjective. We can say that enterprise strategy is the process to realize the value creation of company. They must complete the five main tasks in every stage: making strategic prospect, clear strategic target, strategic formulation, strategic implementation and strategic evaluation and adjustment. (Pearce & Robinson 2011)
The development of enterprise strategic management theory
Generally, in the 1950s is the beginning stage of development of enterprise strategic management theory. Since 20th century, enterprise strategic management theory obtained very big development. Especially in the 60s, there is a hypothesis of "structures with strategy" from Chandler(Chandler & Alfred 1962).
After the 1980s, the world economy structure has changed, from external environment to see that the technology innovation intensified, the international competition is intense, and demands of customers become diversified; from internal environment to see that staff quality general improved, development of self consciousness is growing, the organization trend to flattening and flexibility. (Burgelman.et.al.2008). Strategic management research turned to pay attention on enterprise human factors, cultural factors, knowledge factors as well as the direction and practical operation of research methods.
The process of enterprise strategic management
Enterprise strategic management is the process which leader needs to analyze the external environment of production depends on the purpose and goal of enterprise. First of all, the enterprise work out its own strategy management line according to the external environment, and also need to analyze SWOT of external environment to make opportunity for them. Following that, they should use PESTEL analysis to analyze industry environment of their own industry, it is a great significance for them to determine the business scope (Burgelman.et.al.2008).
Enterprise should clearly know their advantages in resources, such as human resources, management structure, etc. Customer is the center of enterprise management, it is the beginning point of enterprise strategy to consider demands of customers and satisfy requirement of customers. When we know the needs of customers, we can produce the satisfied goods for them. Strategic formulation is just for the interests of the enterprise. Enterprise strategy is for compete to gain the largest profit, this thought is not wrong for the enterprise itself, but finally it becomes malignant competition, such as price war, mutual scandals, etc., and never find a solution from themselves, it will bring bad influence on the enterprise itself, consumer and even the society. Strategy must be to focus on how to improve itself product to appeal customers.
Establishment of enterprise strategy
Strategy cannot be implemented at once when they work out, and also they should pay attention to the core problem of the strategic choice: one is the industry attractiveness; the other is the competitive position in their own industry. If an enterprise can occupy favorable market position, it will get more profits than the same industry. So the enterprise should occupy the high-end market as far as possible. They can weaken or strengthen attraction of industry by using competitive strategy, in the same way, they can also promote or reduce their competitiveness in the same industry through the competitive strategy (Freeman & McVea 2001).
There are three kinds of Competitive strategies:
1. Total cost leadership strategy. This strategy requires the enterprise keep low-cost than other industry enterprise, using lower cost to obtain more benefits, and also to maintain their own stability, it can ensure that other competitors hard to surpass during period. As we know the Wal-mart is a very good example of low-cost strategy. There is a same example of Chinese enterprise named Galanz which the largest home appliance manufacturing enterprises in the world. Guangdong Galanz Group grown by producing feather products, they plan to enter into the microwave oven market in 1993. From home appliances, textile and other diversified industry to microwave oven products, which quickly became a 'big MAC' of microwave oven world. Greatly reducing the selling price depends on the economic scale and low-cost strategy. They occupied the first market share of microwave oven in 1995 until to now, and became the largest home appliance manufacturing enterprises in the world. There are many advantages of Galanz, such as the talent person, brand, technology, quality, service, market, marketing, network and so on. These advantages were helped Galanz to create more products, and became the leader of international home appliance market.
2. Differentiation strategy. This strategy requires enterprise should provide a large number of diversified products and services, in order to satisfy the demands of different consumers. And also to try their best to make unique features of their products, which can attract customer's eyes in the consumer market.
3. The key strategy. The key strategy means they should focus on the fixed market and pay more attention on this market development in order to set up their own market superiority and to satisfy customer's needs and desires. It does not the best way to get the total profits by using this kind of strategy, but if they can work out strategic planning in special market place, it will gain more profits.
The implementation of the strategy of the enterprise
Strategy is not only to make, but also need to implement out. This will depend on the ability of leaders and the whole team organization compliance. The organization structure is a key point, it needs to effective control and design, through that can promote enterprise strategy and to make strategic target to be realized. In the whole strategy, center industry chain of enterprise is absolutely implemented, because it is the key of the main business strategy of these enterprises to success (Pearce & Robinson 2011).
Enterprise strategy is the plan and development direction of enterprise in the future period of time. If the company want to make a perfect performance that needs to design perfect marketing plan, including how to make enterprise to grow and how to get customers. There are two important points of competitive business which are market segmentation and product positioning. We need depend on needs of customers to make different plans to satisfy their demands, that means, the price and the trait of the product should different and try to meet the different needs of customers in order to get more benefit. Before entering the market, the company need do market research. Generally they use 4p marketing methods of marketing management to analyze (Burgelman. et.al. 2008). Research plan can be divided into six steps: 1. The definition and location problems, making sure the target; 2. Set up a hypothesis; 3.Doing the investigation and study; 4. Data collection; 5.Analysis and explanation; 6. Conclusion and suggestion. Just in this way, the enterprise can totally understand the market and design the perfect market strategic plan. The next is going to enter the market. They can use some promotional methods to open market, such as advertising promotion, business promotion, public relations marketing, personal selling, etc., through these methods can quickly to occupy the market.
The following example illustrates the importance of market segmentation and product positioning. Wahaha is the biggest a successful beverage company in China. Since their established, their main products are the soft drink for children and focused on it. Although there are over three thousand competitors, Wahaha still maintain the high profits, that due to their clear market segmentation and product positioning.
So, the enterprise strategic management should do these following aspects under the competitive environment:
(a) Enterprise system and operating mechanism of the innovation ability. A perfect and flexible enterprise management system can reasonably make use of the various resources of enterprise and give full play to each kind of resources, in order to reach the maximum benefits and improve the competitiveness of enterprises.
(b) Innovation ability of enterprise management. Enterprise should use scientific management to effectively organize all kinds of production elements, which change the realistic productivity. The management should follow the development of productivity to innovate.
(c) The enterprise culture. It means all of staff agree and abide by the values and rules of conduct which formed in long-term practical production. That should combine with the rules and regulations of the enterprise to influence and restrict the employee behavior in different aspects. When the enterprise culture is the positive effect condition, employees will be great played their own initiative to improve the quality of products and services, and stimulate the creativity of them to gain new technology, new products, and new ideas. On the other hand, it would be caused significant negative effects on development.
(d) The members of enterprise. If an enterprise wants to develop well, that needs to rely on their employees. Whatever the strategy they took, it cannot be achieved without support from the junior staff.
(e) Leaders. They are the center link of whole enterprise strategic formulation and implementation. As the leader needs to set up the corresponding system and clear responsibilities to make sure everyone's task in the strategy and make use of human resources.
In conclusion, it is not a person or a kind of aspect can make enterprise strategy of enterprise strategic management. It depends on the staff, company resources, and the correct formulation and command of the top leadership, which timely analyze itself under the change of the surrounding environment, in that way, they can keep the survival and development of enterprise.