China's Dairy Industry Competition In The Market Research

With the sustained expansion of China's dairy consumption and the improvementof dairy processing technology, China's dairy industry and market has achieved rapiddevelopment. At the same time a fierce competition was triggered which upgraded theproduction structure as well as the overall competitiveness. On the other hand, thedairy industry was criticized for being "excessive competition" resulted from its"unreasonable" entry and the "confusing" conducts such as advertising war and thevicious price competition. Then, what is the true situation? Is there excessivecompetition? In addition, the market conducts is appropriate or not? This paperattempts to answer these questions.Based on industry organization theory and Product Life Cycle theory, this paper,which uses SCP paradigm and game theory, focuses on the structure and performanceof dairy industry, especially deep-going study on the conduct of the large enterprises.In order to reveal the situation completely, the influence of upstream and downstreamenterprises in the industry chain on competition is also considered.The market performance indicates that fierce competition improved both theproduction and the competitiveness of the whole dairy industry. Furthermore, themarket structure is becoming more reasonable with the increase of industrialconcentration. Therefore, this study disagrees with the opinion of excessivecompetition of China's dairy industry. Competitive behavior is generally reasonable,reflecting its basic characteristics of Product Life Cycle. The competition from marketentry at the very beginning to competition at price and brand is a necessary step to aworkable competition. The unsatisfactory confusion in the market is also anunavoidable but worthwhile price to the better development of China's dairy industry.