Five Group Coal Industry Chain Vertical Integration Analysis

Aiming at the current problem that the relation of the coal business enterprise and the power plant is nervous, because of the coal price, this text put forward to the coal-electricity vertical coupling strategy.Analyzing the external and internal environment of coal-electricity industry within the Wuqiang group, the paper stressed it is important and necessary for Wuqiang to control coal resources through vertical coupling. As coal-electricity industry management system of deep-seated problems, the contradiction between supply and demand of coal-electricity, asset-specific, the particularity of coal-electricity industry chain, the uncertainty in demand caused by China's economic cyclical fluctuations, this paper pointed out that the coal enterprises and the power plaits in order to avoid risks, both have the motive to build strategic alliances or vertical integration.Through the establishment of theoretical models, we analyzed the effects on the coal enterprises and the power plants within different vertical arrangements (strategic alliances, enterprise groups, and complete vertical integration) of the coal-electricity industry chain. And on the perspective of asset-specific, the paper established a decision-making model for coal-fired power plants to practice vertical strategies. Conclusion indicates that the Wuqiang group is more suitable to establish enterprise groups to achieve the objective of vertical coupling. Wuqing Group could buy more than 50 percent stake in coal mines, and take the mine as a subsidiary of Group, so that group would control the sale of coal and personnel management in mine. After embracing the management of coal resources in the group, it facilitates the group to comprehensively coordinate the interests of workers and personnel management. At last, we made a simple conclusion and put forward to some responding suggestions.The results show that, in the arrangement of coal-electricity industry chain vertical relations, Wuqiang should take the establishment of coal-electricity enterprise groups as the leading path, and take the establishment of strategic alliances with large-scale coal enterprises as a supplement, and continue to maintain and develop trade cooperation relations with small-scale coal traders as the added measures.