Research On Vertical Integration Strategy Based On Dynamic Competition

In the 21st century, vertical integration strategy is an important choice for Chinesecompanies. But they are also faced with a prominent problem that is how to select and designvertical integration strategy matching business conditions by scientific and effective methods,under more and more complex dynamic competitive environment, to ensure long-term, stableand sustainable development.The rules of competition in many industries have been broken and remodeled by theglobalization and technical revolution, which made the market become more complicated andunpredictable. To survive in such a changing and competitive environment, the enterprisesshould be more dynamic.Traditional industrial chain integration theory provided a lot of useful analytical methodsand perspectives of vertical integration strategy. However, because environmental changeshave brought new problems, there is a need to explain vertical integration strategy. From theperspective of dynamic competition, this paper tries to analyze the vertical integrationstrategy with a dynamic and developmental method. Under more and more complex dynamiccompetitive environment, this paper, using dynamic competitive strategy thinking, try toidentify key factors that impact establishing and maintaining competitive advantage andwinning in dynamic competition, tell enterprises how to Select and develop appropriatevertical integration strategy.In this paper, we make theoretical literature and case studies. Based on literature study,propose a dynamic competitive analysis framework of vertical integration of firms. Withanalysis from two angles sustainability of fast interaction and multipoint competition, andalso case studies, this paper indicates that effective vertical integration strategy can helpcompanies achieve sustainability of competitive advantage, improve the company's rapidinteractive capacity and build multipoint competition advantage.Achievements and innovations of the paper: first, span the research gaps of domestic theoryof vertical integration with introducing the perspective of dynamic competition, proposing adynamic competitive analysis framework of vertical integration of firms. Second, point outenterprises can use useful vertical integration to upgrade their rapid interactive capabilities,including obtaining market information and improving response capability. Third, broaden theapplication of multipoint competition theory, from the application of general product / servicemarkets to the application of industry value chain.