An Engineering company is engineering services and traditional manufacturing industry. It provides construction services for electrical power, petrochemical, steel manufacturing, environmental protection, energy, technology and public construction project. Because of geographical, historical evolution, political and economic development, and other factors, it develops 95% domestic small and medium enterprises. Almost 90% of small and medium domestic engineering and construction companies lack of resources for financial capability, strength and efforts, technology, project management, and design capability. There are too many difficulties to cope with and powerless frustration for each resource and capability. Especially lacks of working funds, such they are not able to take part in the bidding for a large turnkey project. They can only undertake a smaller construction or act as a subcontractor for a larger engineering and construction company, besides their profit will be very negligible due to lower entry barrier of the industry. In recent years, more and more companies of petrochemical industry move to foreign countries as well as global economic downturn and the environmental consciousness is going up, it cases number of domestic construction projects is trending down and the market competition is trending fiercely. Most of small and medium engineering and construction companies are in the face of business distress because of the tough competition, and that will limit the growth of business. In a mature and competitive industry, the most strategy for medium and small companies is to build up core competence, build competitive advantage, and improve competitiveness. After that, the companies will have adequate resources and abilities to become a larger company which can enlarge the scale of operation, move to overseas market, and maximize the stockholders¡¦ value. To become a large company is very import for medium and small construction companies. All of these are the vision of small and medium sized engineering and construction companies and are the most important mission of the administrator of the companies. In this thesis, the research regards BJ engineering company as the research object. It carry on quality and qualitative research with such analytical methods as value chain, SWOT, 5-force analysis, PEST, and resource analysis. The purpose of this work is to build up the strategy of competitive advantage for small and medium companies, and find out the proper business strategy for BJ Company. Some advices will enable to break through the business bottleneck, enhance core competitiveness, and expand the business scale and the scope of BJ Company operations. We wish to share the experiences of competitive advantage to achieve sustainable management of the target.