Agricultural Materials Wholesalers Business Strategy Choice - Found That The Agricultural Business, The Profit Zone

With the national reform of the circulating system, agricultural means of production face more and more severe market competition, and the circulating channel is more open than before. Being the first wholesaler sector, enterprises of agricultural means of production (abbreviated EAMP as following) are also suffering the compression from the upstream producers and downstream distributors, and changing to redundant intermediation.EAMP now is in hot water. How to find the right way to survive is a big challenge that EAMP must face. In competition, EAMP uncovers many disadvantages, such as system ossification, mechanism rigidity, heavy burdens and old-fashioned ideas. On the other hand, with long time operation, EAMP also owns specific advantages, such as market network, managing elites, good images, assets establishment, financing abilities, favoured policies and social resources. These advantages form a firm base for the change of EAMP.Though the situation is very hard, EAMP is confronting many opportunities:First, with the combination of upper state-owned fertilizer manufacturing firms, EAMP can control upstream manufactures with very low cost;Second, as former market networks of agricultural means of production are broken up, there is a great space for EAMP reforming old market network by chain store;And third, with the development of national economy, there is possibility that EAMP can enter other business relating to agricultural means of production.Based on the analysis of profit zone, through the reposition ofstrategy, EAMP can redefine the boundaries of the firm, grasp the chance, and exert own advantages. There are three useful pokers EAMP can play:First of all, backward-integrate to develop upstream producers, using advantages of resources to bring along wholesale business; Second, forward-integrate to develop downstream distributors, broadening and controlling network by chain store; Third, horizontally develop diversification, enter new fields, and fulfill fast development based on the agricultural means of production.In practice, three companies bring the above three strategy into effect separately, and get unexpected good results.Six parts constitute this article:In the first part, present the hard condition which EAMP faces, and the main outer factors affecting EAMP into dilemma;In the second part, deeply analyze the profit zone of EAMP management, advance the position of the management strategy of EMAP, and find out the path how the strategy puts in practice;In the third part, advance the organization strategies that EAMP may change and create;In fourth to sixth parts, respectively advance three strategies (vertical integration or horizontal integration) that EAMP may apply. Using examples, analyze deeply the profits and costs three different strategies may bring, emphasize the keystone, difficulty and effect.The article has the characters as follows:The research object is circulation system of EAMP, but such relating research to the strategy of EAMP in reforming is very rare,Author has many work experiences in circulation system of EAMP. As he combines his own working experiences and learned theories of MBA, the article has many practical experiences based on real cases;Through the research of the strategy of wholesales of EAMP, the article aims to look for new increment mode, gives author own particularviews.