M Natural Gas Pipeline Transportation Company Vertical Integration Strategy Research

With the rapid development of economy and Chinese increasingly attach importance toenvironmental protection work, natural gas as a clean and high-quality energy, its use and promotion of ourcountry to improve the energy structure, reduce pollution and promote low carbon economic developmenthas an important role.In recent years, the state has promulgated the use of natural gas in planning and supportingpolicies. The domestic gas industry, which the proportion is also increasing in the energy structure, hasrapid development momentum. This brings good opportunities for the development of natural gas industry.At the same time, the increasingly fierce market competition brings enormous challenge to natural gascompany inevitably.After10years operation, M natural gas Pipeline Company (hereinafter referred to as “M”) hasentered a stable development stage. While the demand for natural gas is increasing rapidly, the upstreamgas is in short supply. This has become an important factor which restricts the development of Mcompany’s survival.Therefore, researching into the opportunity and challenge facing M company under the newsituation, analyzing comprehensively the external macro environment for the development of enterprises,combining with their own advantages and disadvantages, clearing the enterprise market positioning,choosing a suitable development strategy for enterprise and implementing them effectively, has become aserious problem facing M.In this paper, through thorough investigation and study on the M company, using the enterprisestrategic management, the related theory of vertical integration and PEST analysis, Potter’s five forcesanalysis model SWOT analysis and such analysis tools, it researches into the macro environment of Mcompany, industry environment, M company internal resources and so on. Through the objective analysis,it determines the M company development strategy of vertical integration. To break through the singularityof the industrial chain, considering the complexity of the environment and the possibility that could not becontrolled, it puts forward suggestion and measures to guarantee the implementation of the strategy. At thesame time, it establishes the evaluation feedback mechanism for the effect of implementation of the strategy.This paper puts forward that integration strategy and backward integration strategy are bothimportant. That enriches the vertical integration strategy theory system of natural gas enterprise. That willalso help to deepen the theoretical research on vertical integration strategy. The research has the guidingsignificance for M company. It also has certain reference to similar enterprises.