The Strategic Research Of Dairy Products Enterprise In China Based On The SWOT Frame

Since2000, the dairy products enterprise in China has experienced a rapid development period. However, the "Melamine" event happened in2008has slowed down the developing speed of the whole industry and now the industry has come to the adjustment period. After analyzing the life cycle of the dairy products enterprise in China, the fact is that Liquid Milk still accounts for a major part of the dairy consumption. In past two years, the market consuming capacity begins to resume and the average revenue of the dairy industry still maintain at a relatively high level. According to the characteristics of the market we can estimate that the dairy industry is still at the growth stage. Based on the estimation of the stage China’s dairy industry in, this article forecasts the dairy industry production and consumption for the next five years through the cubic exponential smoothing method and indicates that in2012China’s dairy output will reach40million tons. Since the domestic dairy consumption lags behind the domestic dairy production, the dairy market may appear a situation of supply glut and the competition in this industry will be fiercer in the next five years.Through the analysis of the five forces that the dairy enterprise is facing, it is estimated that opportunities and threats exist in the external environment of the dairy enterprise:The intensity of the existing competition in the industry is quite fierce. Market concentration rate has been on the rise all the time. With the development of large storage, the market control of sellers is gradually strengthened step by step and this will threat bargaining ability of enterprises. As to the suppliers, due to the dispersed manufacturing, raw milk suppliers have no bargaining ability. Since the material and equipment suppliers have a monopoly position, the profit space of dairy enterprises has been compressed. For the potential entrants, the existing enterprises have relative cost advantage and brand advantage, in addition, the requirements for market access of the dairy industry has improved, so the entry barrier is relatively high; among the alternative products, soy milk products are developing rapidly. However, considering the present situation, it is unlikely to happen that soy milk products replace dairy products.Considering the influence of foreign capital entering into China’s dairy industry, this article f has analyzed the competitiveness of China’s dairy enterprise through every production link of the dairy industry chain:Breeding link, while foreign enterprises have powerful advantage in technology and capital, domestic breeding enterprises are under strong competitive pressure; Forage grass link, the existing problems include low quality of grass processing, product structure problems, high-end equipments dependence on imports and annually increasing forage imports; Dairy processing link, the production equipment and packing materials are monopolized by foreign enterprises, only liquid milk have the competitive advantage in the market and high-end milk powder market is occupied by foreign enterprises.Then, this article sets a competitive advantage analysis on three large dairy enterprises which now totally occupy half of China’s dairy market share. Via the factor analysis method it is found that the profitability differences between three dairy enterprises are mainly in capital structure and operating efficiency. Then, profitability analysis, operation ability analysis and capital structure analysis have been carried out respectively of three dairy enterprises via the Dupond equality. Yi Li has the strongest profitability and Meng Niu has the strongest operation ability of the three diary enterprises. In the capital structure analysis, it is found that, asset-liability ratios of Yi Li and Guang Ming are very high, while Meng Niu’s is much lower. This may be related to the attitude to risk management and assets backgrounds of the three enterprises.Finally, based on all the analysis above, choose enterprise strategies of different levels based on SWOT analysis frame.