The Firm’s Strategy Of The Vertical Integration In The Dynamic Competition

When the competitive environment becomes more and more complex, firms’ can’t maintain the long-term advantage. In the dynamic competition, the key for firms to be successful is to acquire information, speed and innovation. In order to get the dynamic competitive advantage, the firm adopts the vertical integration strategy. When the firm acquires the rapid interaction advantage and the multi-point advantage, the problem which the firm faces is how to maintain the competitive advantage. The existing literature focus on the how to get the competitive advantage by vertical integration. However, there lacks of the article about how to adjust the strategy when the external environment changes.In this paper, we review the theoretical literature and study three cases. Firstly, we study the literature about competitive competition, vertical integration and competition strategy. Secondly, we study how the firm acquire the competitive advantage by vertical integration. Thirdly, when the external environment changes, how the firm maintains the sustainable competitiveness after the vertical integration. Finally, we uses the Belle company to illustrate the things discussed above.The innovation of this paper is divide the vertical integration strategy into two stages. We focuses on the latter stage, discussing how the firm adjusts strategy when the external environment changes. We provide the theory support for the vertical integration.