Study On The Backward Integration Strategy Of X Company

It is a common thought that exporting companies should be engaged not only in exporting but also in producing. For exporting companies, it is significant to devote themselves to backward integration strategic management. However, some exporting companies do not realize the importance of such strategic management; some exporting companies lacked correct strategic management, and didn't dare to backward integrate or ended in failure.This paper takes an exporting company-X Co. as a discussed objective. It analyzes the company's external environment and internal resource, and then puts forward back integration suggestion and some specific measures. This text is divided into five parts:Chapter 1: introducing the state of X Co., the problems faced. In this part, the author points out that lacking manufacturing segment is the resource of the problems faced.Chapter 2: informing the strategy theories used, including integration theory, economies of scale and enforcing methods of development strategy. This part is the theories basis of the text.Chapter 3: discussing the industry that X Co. engages in. Through discussing the state of stone industry in China, international market of stone products and the stone exporting, the text comes to conclusion that the stone industry is developing both in producing and in exporting.Chapter4: analyzing the stone industry in Minnan region, Fujian province, focusing on the state of strategy group in Minnan region. Trough this analyses, it is easy to know the strategy environment where X Co. locates and find out the opportunity and threaten it faced.Chapter 5: considering the reason and feasibility of backward integration of X Co.; probing how to implement strategy, doing some imaginations and suggestions to the backward integration including what products to be produced, how to chooseamong internal development, acquisition and alliances; whom to cooperate with, how to deduct backward integration risks, and then suggesting specific steps for backward integration strategy.X Co. is typical in numerous exporting companies in China: business scale is small, a few variety of products, recourses are limited. The purpose of this thesis is to explore a small-scale exporting company how to break away from a predicament, seek survival and development. Through the analysis to the backward integration strategy of X Co. and making a strategically plan, the author hope there should be certain reference to other exporting companies.