Research On Development Strategy Of Upstream And Downstream Industry Of Dong-E E-Jiao Corporation

Shan Dong Dong-E E-Jiao Co., Ltd., called for’Dong-E E-Jiao’, is the largest production base and leading enterprises of the traditional Chinese medicine’E-Jiao’in China. The revenues have increased by1.8times during’the Eleventh Project’, up to2.47billion Yuan in2010. In the next five years project, the revenues will strive to achieve6billion Yuan. It has achieved remarkable progress during’the Eleventh Project’, but donkey population fell by an annual average of4%. The shortage of donkey hide is the bottleneck owed all the time, and it is likely to become the main sticking point, which will block the company’s development.For Dong-E E-Jiao Corporation, the upstream of industry chain contains donkey breeding and R&D on donkey meat product, and the downstream covers health industry of Chinese medicine and GaoFang (soft extract of Chinese medicine). Whether it should vigorously involve in the upstream and downstream industries or not, is an important strategic choice for realization of doubled sales during’the Eleventh Project’.Firstly, this paper introduces the related theories about the development strategy of industry chain, including the industrial value chain theory, positioning theory, strategic alliance theory, and some models about strategic analysis:SWOT model, Porter’s Five Force model and BCG model.Secondly, according to Dong-E E-Jiao’s features, this paper analyzes the background of strategy of industry chain and strategic position, makes specific strategic objectives and measures,(i) According to the brand core value of E JIAO, reach to the upstream of industry chain. To resolve the shortage of donkey skin resources, it would be important to encourage farmer breeding and self-built breeding base. Meanwhile, it would be necessary and crucial to develop the product of donkey meat to increase comprehensive economic values of donkey and keep farmers motivated,(ii) According to perception towards the brand and cultural from customers, reach to the downstream of industry chain, especially Gao Fang industry. To promote Gao Fang industrial development, it would be important to self-built Dong E medicine house and cooperate with well-known Chinese medicine house.Finally, according to Dong-E E-Jiao’s condition, the paper describes the security program from corporate culture, technological innovation, intelligence and system of evaluation and controlling of the process of the chain strategy implement.