Discussion on strategic mistakes of Chinese corporations on establishment of distinctive competence —comparison and analyses between Chinese Baosteel Co. and Japanese Mitsui Co.

Strategic management is a systematic project for multinational as well as Chinese corporations. Abilities to adapt to dynamic environment from exterior and interior are essential for strategic management in the sense of distinctive competence. Here we first analyzed the current status of Chinese corporations in culturing and maintenance of distinctive competence after applying strategic management. The countermeasures Chinese corporations have applied to catch up with their multinational rivals during the past twenty years of reform were further dissected. Then, taking the case of Chinese Baosteel Corporation and Japanese Mitsui Corporation, we have reported research on the background of these two leading companies in steel industry, reported comparison of their distinctive competence focusing on strategic management and discussed pitfalls of Chinese state owned corporations in the process of reform and internationalization. Finally, we have proposed three key measures that Chinese corporations should adopt for establishing and maintenance of distinctive competence in order to achieve a sustainable development.