The Research On The Vertical Integration Strategy Of H Group

In the course of business operation, enterprises are facing external market competition, industry competition, as well as internal changes that come along with business development. In this regard, enterprises should not only deal with competitors whom share the same market characteristics with themselves, but should also deal with the constant changes in market direction led by changes in technology, culture, and other factors. If an enterprise cannot make reasonable adjustments in a timely manner based on rational analysis, it will certainly come under pressure both internally and externally. Under fierce market competition, more and more enterprises start to realize that they must examine their development environment and make development plan from a strategic height. In the western world, companies have already formed their management concept and means. In mainland China, more and more enterprises start to pay attention and carry out research on the western ideas, and continuously apply these in conjunction with their own situations.This paper takes Group H as an example and advises it to choose and implement vertical integration strategy based on the analysis of national policy, external competition and internal situation. In the backward integration, combined with the operation and management capabilities of Group H, it should takeover existing secondary raw materials suppliers and other suppliers; in the forward integration, Group H should further breakdown the market regions after careful studies on the development direction of the market. Through adopting and implementing such strategy, Group H has obtained bigger market share, fine market effect, and proved the effectiveness of vertical integration strategy.In this paper, the author has carefully examined and analyzed the collected data on enterprises’operation, industry policy, and competitors. According to relevant laws and regulations, the author makes suggestions on the strategic system based on comprehensive evaluation on the internal environment (IFE) and the external environment (EFE) of the enterprises, and gives the tactical suggestions based on the actual situation and of Group H and relevant conditions...