A Study On Market Extension Of The Vertical Boundary Of The Chinese Home Appliance Retail Company Under Network CDonditions

The determination of Enterprise Vertical Boundaries has been a long-standing problem issue in Economical fields, in the meanwhile, an important aspect in modern enterprise theory studies. In reality, how to determine the Enterprise Vertical Boundaries, and what's the basis to select between Vertical Integration Behavior and professional behavior that bring vertical boundary narrow? This issue has been a stress of theory circle study.From the information revolution starting from the 20th century, network technology has played a vital role, becoming an essential part of the world today. Internet technology has not only changed peoples daily social life and economic life, but also had a profound impact on the business model of the enterprises. Then under new conditions, whether the enterprises vertical boundaries are changed, and what about the trends and direction of the changes, that's what we need to know, and also a question urgent to be answered in order to better adapt to this new market conditions.The main idea of this paper is to explain the determination issue of Enterprise Vertical Boundaries based on minimization of cost. When the enterprises internal cost (including the sum of the internal production cost and internal transaction cost) is greater than the external cost (including the sum of external production cost and external transaction cost), the company will choose to narrow the vertical boundary of enterprises, that is, professional conduct; when the enterprise's internal cost is smaller than its external cost, the company will choose to expand the vertical boundary of enterprises, that is, Vertical Integration Behavior. In this paper, the final business vertical boundary determination is got by establishing a determination model of enterprise vertical boundary, bringing a variety of factors that might affect the determination of the enterprise vertical boundaries into the model, and analyzing possible changes of each factor because of network technology. Meanwhile, the paper also apply this enterprise vertical boundary model under network technologies into Chinese home appliance retailing industry for verification, and obtain the conclusion that the vertical boundary of home appliance retailing enterprises will show the characteristic of "expend first, then narrowed", and according to the conclusion analyzed from this paper, relevant proposals have been given to home appliance retailing enterprises on market extension of present vertical boundary.This article is divided into six parts. The first part is an introduction, mainly describes the purpose and significance of choosing this title. The second part is literature review, which introduces the development history of the study of Enterprise Vertical Boundaries determination issue in and abroad. The third part establishes the model of the enterprise vertical boundaries. At the same time get the determination model of the enterprise vertical boundaries under network technology by analyzing possible impact from network technology. The fourth part introduces the present status of the Chinese home appliance retail. The fifth part, apply enterprise vertical boundaries model under network technology into Chinese home appliance retailing enterprises. Through relevant analysis, conclusion has been reached that vertical boundaries of Chinese home appliance retailing enterprises have the characteristic of "expand first, and then narrowed", which is the core of the paper. The sixth part is conclusions and proposals. Based on the conclusions got from the previous analysis, suggestions are proposed to relevant enterprises on their vertical boundaries determination issue.The main feature of this paper is that the enterprise vertical boundary determination model is applied into specific industry for analysis, and conclusions and suggestions of certain practical significance and reference value has been got.