Abstract

By 2011, Changjiang & Jinggong Steel Building Group Co. Ltd. (Jinggong Steel) had been the number one in China’s structural steel industry for five consecutive years. The company had successfully grown from a small machine manufacturer into the leading steel structure company through a series of core competency acquisition in the fields of structural steel manufacturing and high-grade frame construction.

As the company started its strategic repositioning in 2011, Management decided that it was time to review the company’s growth-through-acquisition strategy. Relying on the company’s core competence in supplying systematic and professional solutions for commercial and industrial buildings, the company had initiated a transformation from a steel structure manufacturer to a fully integrated general contractor in 2007.

The ultimate decision management faced was whether Jinggong Steel should transform into an all-around general contractor through mergers and acquisitions to meet existing market demand, or whether Jinggong Steel should become a specialized general contractor by leveraging on its core competences to provide new products and services.

Learning Objectives

This case aims to help students understand two alternative approaches to formulating strategy (i.e., market-based and resource-based) and the related strategy implementation issues. The students will learn to analyze the business environment, such as industry trends and market competition, and identify a company's core competences and market position. By discussing the differences between a market-based strategy and a resource-based strategy, students will also have a chance to compare the potential benefits and risks of each strategy and discuss the alternative strategies from the company's perspective.