Research On The Whole Industry Chain Strategy Of COFCO

Competition among modern enterprises, not only competition among enterprises, but also the overall competition focus on the enterprise itself and its upstream and downstream value chain. Therefore, competition among enterprises has been transformed into competition of business ecosystem consisting of all value added members. COFCO in 2009 proposed to build the whole industry chain strategy which is described as "from farm to fork". Since then, this large trading company, which core business was agriculture and food import and export trade, began to enter the source and terminal of agricultural field, and thus build a complete industry chain which is from planting and breeding to processing,logistics,trade,R&D and sales.As the acceleration of merger and acquisition, the whole industry chain initial success, initially formed eight agricultural industry chain around the rice, wheat, barley, sugar and tomatoes, meat, biomass energy, feed, drinks. But with the rapid expansion of COFCO, the risk is also gradually increase, the risk mainly include two category: financial risk and operational risk. Financial risk mainly is the higher rate of assets and liabilities, breaking the 60% of the red line, high debt ratio maybe cause the break of cash flow; Operational risk mainly in the industrial chain integration failure can easily lead to large enterprise disease. Industry chain link problems will affect the whole industry chain. This paper try to find ways to reduces risks and improve operational efficiency.This article mainly study on the whole industry chain strategy of COFCO. How to achieve the integration of industrial chain? What are the risks to implement the whole industry chain strategy, how to avoid? This paper mainly used case study method. Conclusion:ADM, Cargill and Louis. Dreyfus and other famous multinational grain merchants have formed the world-wide chain model (plant-processing-Logistics-Trade), and have involved in China's grain and oil markets, therefore, in the new competition period,COFCO must adjust strategy transform its strategy.The realization of the strategy will contribute to the whole performance improvement.