Strategic Implementation And Financial Performance Analysis Of The Whole Industry Chain Of COFCO

The competition among modern enterprises has developed from the competition among individual enterprises to the value chain extending around the upstream and downstream of enterprises,as well as the overall competition among value networks composed of value chains.It is a competition among commercial ecosystems composed of all value-added members.In the context of food safety issues,in 2009,COFCO put forward the strategy of building a whole industry chain from field to table.With the accelerated pace of mergers and acquisitions,China Food Group has gradually formed an agricultural industry chain around rice,wheat,sugar and tomatoes,meat,biomass energy,feed,drinks and beverages,and further expanded to terminal sales channels,such as e-commerce platform,commercial real estate and agricultural financial services,initially forming a strategic layout of the entire industry chain.This paper uses case study method,taking COFCO as an example,starting from the background and motivation of implementing the strategy of the whole industrial chain,focusing on the analysis of its implementation process.On this basis,it collects and analyses the financial data of subsidiaries of COFCO,and evaluates the effect of the implementation of the strategy of the whole industrial chain from the perspective of financial performance.Finally,it summarizes its successful experience and provides inspiration for the application of the industry.The whole industrial chain refers to the extension and integration of the upstream and downstream of the industrial chain.Specifically,the whole industry chain is an economic organization behavior that integrates the raw material supply,production and packaging,logistics and transportation as well as the final marketing links of products.Financial performance is an important criterion for evaluating the implementation effect of enterprise strategy.It is reflected in the solvency,profitability,operation ability and growth ability of enterprise financial indicators.Based on industrial organization theory,value chain theory,transaction cost theory and synergy effect theory,this paper analyses the mechanism of the impact of the implementation of the whole industrial chain strategy on financial performance.The whole industrial chain strategy can improve the overall performance of enterprises,improve the efficiency of capital use,and produce management synergy effect,business synergy effect and financial synergy effect.COFCO is an international first-class grain enterprise based in China,with grain,oil,sugar and cotton as its core industries,and involves food,finance,real estate and other industries.In the context of frequent food safety problems,COFCO is facing fierce competition in the international and domestic markets.On the one hand,the rapid increase of domestic oil and grain market demand,together with the support of agricultural policy and the progress of domestic logistics and transportation technology,has provided opportunities for the development of enterprises.On the other hand,with the acceleration of strategic transformation of enterprises,a large number of mergers and acquisitions are in urgent need of integration,and some businesses overlap.In order to reduce transaction costs,optimize resource allocation,and meet the opportunities and challenges in the domestic and international environment,COFCO began to implement the whole industry chain strategy.This paper sums up and summarizes the implementation ways of the whole industry chain of COFCO.Firstly,it combs the development thinking of its strategy,which can be divided into three levels: product,capital and collaborative management.Secondly,the implementation process of the strategy is analyzed concretely.From the perspective of the specialization platform in the upper,middle and lower reaches of the production chain,the ways of industrial integration of China Food and Agriculture Group are sorted out.When enterprises integrate the upper,middle and lower reaches of the industrial chain,they not only lengthen the two ends of the industrial chain vertically,but also widen and integrate horizontally.While developing the oil and grain trade and food processing industry,they also develop the terminal markets of commercial real estate,build the urban service complex,build their own logistics system,build their own research and development institutions,build agricultural financial service platform,and upgrade the industry.Provide capital support.Through the analysis of the financial performance of COFCO Group,this paper evaluates the effect of the implementation of its whole industrial chain strategy.This paper collects the financial data of relevant subsidiaries of grain group,analyses the effect of different links in the industrial chain from the perspective of upstream,middle and downstream specialized platforms,calculates and analyses the relevant financial indicators such as profitability,solvency,development ability and operation ability,and analyses and prospects the implementation effect of the whole industrial chain strategy of grain group from the perspective of financial performance.The research shows that the whole industry chain strategy of COFCO has a good synergistic effect on its financial performance.According to the current situation of the company and the results of financial performance analysis,the following conclusions are drawn: First,effectively enhance the core competitiveness of enterprises and significantly improve financial performance;Second,the vertical integration effect is obvious,which reduces transaction costs and improves collaboration efficiency;Third,it produces economies of scale and related effects to form complementary resources;Fourth,it produces management synergy effect and top-level setting.The function of accounting control and regulation is obvious.Through summarizing its successful experience,this paper explores the key links to strengthen the whole industry chain,and provides ideas and inspiration for the promotion and application of the whole industry chain strategy among industries.Firstly,we should strengthen the raw material control of domestic and foreign markets,strengthen the key links of the industrial chain,and improve the ability of R&D and innovation.Secondly,we should build an efficient and efficient internal logistics system.Thirdly,we should promote the flattening of organizational structure and balance the business sector.Finally,we should build a characteristic corporate culture of the whole industry chain and try to coordinate the whole industry chain and the whole service chain to meet the needs of high-end consumers.