Horizontal Economies Of Scale Eenterprise Supply Chain Integration In M&A

M&A is a way of business development which can be insteaded of the market competition. The costs that the economies of scale enterprises approach to gather the necessary resources through market competition is too large , So M&A has become the main way for the economies of scale enterprises to grow, with the stinging competition between enterprises. Such as the Lenovo has successfully acquired a IBM's global PC business in 2004; The concentration has significantly increased in iron and steel industry and Hebei Iron &, Shandong Iron &, Baosteel and Wuhan Iron and Steel Group have been Formed through horizontal M&A in the first half of 2008.However, M&A is not always successful and about 61% of them is abortive according to Mckinsey & Company's research. The failure of M&A is mainly due to the failure to effectively integrate the resources obtain from M&A. The content of the merger integration typically includes two important aspects such as internal resources integration, external resources integration,and any failure of resources integration of any may lead to M&A's failure. The effective integration of the two independent supply chain is the key for economies of scale enterprises to obtain economies of scale and merger synergy, through horizontal M&A, and now the study of this topic is not prevalent.The thesis mainly studies how to effectively integrate the two independent and complete supply chain after horizontal M&A of economies of scale enterprises. In order to study effectively, dividing the supply chain of economies of scale enterprises into upriver suppliers and downriver distributors, so the integration of the supply chains can be divided the integration of upriver suppliers and the integration of downriver distributors, then making the two supply chains to combine into one, the main content of this article can be divided into three parts.The first part of the main topics of this paper is to clarify the background and significance, and theory research at home and abroad, and then the part introduces the basic concepts and theories on the horizontal M&A, economies of scale and the integration of supply chain and so on, which can provide theoretical support to this article. This part includes Chapter I and II.The second part is the main part of this article, the main contents of this section is to analyze the integration of upriver suppliers and the integration of downriver distributors after the horizontal M&A. The research show that the objective of the integration of upriver suppliers is to reduce procurement costs , and the objective of the integration of downriver distributors is to reduce the cost of sales, then there are two horizontal merger integration model have been established in this article, the first model is the model of integration of upriver suppliers based on procurement cost minimization and the second model is the model of integration of downriver distributors based on sales cost minimization. This part includes chapter III and IV.The main content of the third is study the post-merger integration of the entire supply chain, and explains the specific measures of the post-merger integration of supply chain, and emphasized the importance of collaboration between node enterprises on the supply chain, and then proposed the conclusion of this article. This section includes chapter V and VI.