China Petrochemical Company Is Vertically Integrated Strategic Research

The essay focuses on vertical integration strategy used in a large-scale state owned company. Taking China Petroleum & Chemical Corporation (Sinopec Corp.) as an example, this essay analyzes the competition trend in the oil and chemical industry, describes domestic competition situation, and illuminates competition status of Sinopec Corp. Based on its advantages and disadvantages, the author evaluates whether vertical integration strategy is available for Sinopec Corp. The author summarizes this strategy's positive and negative effects on it as well. At the same time, the essay indicates the key point of vertical integration strategy and the means to carry out the strategy.The essay is divided into five parts. The first part studies the importance of the vertical integration strategy. Based on these topics, the author summarizes reasons for adopting vertical integration strategy. The second part analyzes the political, economic, social and technical environment, discusses Sinopec Corp.'s status in the industry by the five forces competition model, and summarizes the driving forces to execute vertical integration strategy. The third part analyzes the company's internal resources and competitive ability according to every division. As well, this part reviews the company's management ability in HRM and R&D. The forth part describes its value chain and analyzes its core competence. Based on the discussions, the author believes that vertical integration strategy is an effective means. The fifth part describes Sinopec Corp.'s action in using vertical integration strategy. The author also gives some suggestions to improve the implementation of the strategy. Finally, the author points out the problems that would be studied in the future.