A Research On Vertical Integration Strategy Of Zhongjin Lingnan Nonfemet Company

The industry of non-ferrous metals is the basic in Chinese industrial system,and it was integrated with the international market at a early stage. Recently Chinese non-ferrous industry has benefited from the high-speed development of Chinese economy, and the Vertical Integration Strategy becomes a trend.Shenzhen Zhongjin Lingnan Nonfemet Company Limited (NONFEMET) is a large SOE that specializes in the production of non-ferrous metals Lead and Zinc. NONFEMET owned its Vertical Integration production chain including Shaoguan Smelters and Fankou Mines from the reorganization in 1999. And in 2001 the Nonfemet Technology Co., Ltd was formed which is a milestone that NONFEMET owned a whole Vertical Integration Industry chain. Although NONFEMET run very well, NONFEMET realized that the previous overall strategy was not clear and the Vertical integration strategy was not compatible with its own Vertical Integration Industry chain. Obviously, it is necessary to rebuild the overall strategy and Vertical integration strategy to keep the pace of the quick change of environment and highs-speed development of the competitor.With the combination of the western theory of the strategic management and the concrete instances of the NONFEMET and under the guidance of the long-term view development plan of the nonferrous metals trade in Guangdong, in the paper, a deep investigation and research has been made and a large quantity of latest data and written data has been gathered and sorted out to have a chief study of the group company's development strategy of the coming five years by determining the nature and amount and uniting the theory and practice. Furthermore, by the summary of the strategic management theory and the general introduction of the company's overview, on the basis of the exposition and evaluation of its inside and outside environment condition and making the SWOT analysis by means of PEST law, Five-force model, Industry Chain Analysis and other tools, and with the consideration of all the influential factors in the development strategy of the group company synthetically, this paper proposes a conceiving of the company's overall strategy, and analyses the structure and character of the Vertical integration strategy. Still, the paper comes up with a set of suggestions to ensure the effective performance of those strategies in terms of the management structure, human resources and corporate culture, and meanwhile, it predicted the risk that strategic implementation possibilily faced with and puts forward the precautionary measures suggestion.