Dalian Zhangzidao Chuo Cold Logistics Co., Ltd.: Vertical Integration

內容大綱
The chief executive officer of Dalian Zhangzidao Chuo Cold Logistics Co., Ltd., a Chinese company that specialized in cold chain storage and logistics services for imported frozen aquatic products supply chain, faced a series of urgent decisions. Since beginning operations in 2014, the company’s business volume had increased faster than other enterprises in the industry. However, in 2017, the company still faced the typical dilemma of enterprises in its industry—a lower net profit margin. As a middle link in this supply chain, the company was in fierce competition with upstream suppliers, downstream buyers, and horizontal competitors. The chief executive officer faced some tough choices: Was the company capable of implementing a vertical integration strategy to enhance its competitive advantages? If so, should the company pursue forward integration or backward integration? And how could the company achieve vertical integration, given its current circumstances?
學習目標
This case is suitable for graduate and executive education courses in supply chain management. Working through the case and exhibits, the students will become familiar with China’s supply chain for imported frozen aquatic products, and understand why and how core enterprises implement vertical integration in supply chains. After completion of this case, students will be able to understand the<ul><li>qualifications of core enterprises to implement vertical integration;</li><li>forces that drive core enterprises to implement vertical integration;</li><li>types of vertical integration—forward and backward integration—and conditions for their use; and</li><li>two main approaches to vertical integration—vertical financial ownership and vertical contract—and their differences.</li></ul>
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