Research On The Upgrade Of Late-Entrant Company S In Plant Extracts Market

In the late 1990s, as the pursuit of "green" and "natural", the global market of plant extracts gained a rapid development. It is known that China is rich in flora and fauna, as well as it has a long tradition of herbal medicine, which laid a good foundation for promoting plant extracts market. Additionally, with the accelerating process of globalization, international division becomes deepen, plant extracts which is a kind of ingredient which is widely used in bio-medicine industry, health industry and cosmetics. Therefore, the participation of plant extracts in global value chain becomes deeper and deeper. Meanwhile, the threshold of plant extracts industry is lower compared to the other field of biotechnology industry. That is to say, the technical barrier of plant extracts industry is lower than that of bio-medicine and cosmetics. Plus, the profitability of plant extracts is higher compared to other general manufacturing. What is more, as a widely used industry, the market of plant extracts is quite impressive. So, under the national policy guidance, the number of enterprise which participates in plant extracts grows significantly. Most of them are exactly attracted by the low barrier, profitability and huge market prospects. In addition of the national policy of encouraging innovation and entrepreneurship, lots of entrepreneurs enter plant extracts market in recent years and provide plant extracts products through e-commerce. However, there exist serious problems in the present plant extracts market such as the poor product quality poor corporate reputation and the frequent price war. In this context, an outstanding competitive differentiator enterprise will get better market resources, whereas those which are still struggling in the price war will risk the risk of being out of the market. In addition, the plant extract industry takes the lower value-added part, which is the bottom of the global value chain. It preformed as raw material supply industry for high-end bio-medicine, health care products and cosmetics industries. To upgrade along global value chain to the high-valued part is a long-term development goal of each plant extract corporate.This study is based on the framework of the theory of competition strategy of late-entrants. The development process of the target enterprise is accordingly divided into three stages. The entering stage, the period of overcoming late-entry disadvantage, which is also the stage of the accumulation of resources and the period of upgrade along global value chain by means of the late-entry advantage. Combined the framework of the theory of competition strategy of late-entrants with the theory of corporate upgrade as well as the theory of upgrading along the global value chain, the analysis of the second and the third stage of the development process accords with three aspects, the idea of the entrepreneur and corporate culture, internal corporate organizational structure and external interaction. Findings refer that the objected case entry the market on the basis of the good social network of the entrepreneur along with the operation idea of "innovative, dynamic and sharing" and produce homogeneous products. It is the idea of the entrepreneur and the operation ideology that guides the corporation gained efficiency. The efficient internal operation and frequent external interaction lead to the accumulation of the market resources, technology, capital, human resources and brand image. Therefore, lays a solid foundation for enterprises global value chain upgrading.According to the research framework which combined with the resource-based view and contingency theory, the analysis finds that the core elements of the success of the observed enterprise is the investment in technology, encourage in innovation and the sharing of resources. Investment in technology improves product quality, thus, company reputation is guaranteed; encouraging innovation makes the company's internal operation efficient; sharing of information resources increases the influence of the industry and the whole company advanced with the times. Under the effect of the three core elements, the internal circulation increases critical resources; external interaction enhances the brand image, all above lead to a solid basis for the company upgrade along the global value chain. Combined with the suggestions the theoretical study of global value chain upgrade proposed, the objected enterprise has three direction of upgrade, the first of which is that the company raise the economic rent and become one of the industry leader. The second one is to produce products direct to consumer based on highly skilled technology and the accumulated corporate image and reputation. The third one is to form a local value chain, the company forms the blueprint of "Internet plus Health plus Modern Agriculture" through the external interaction. Overall, technology investment and innovation encouragement is the foundation of success upgrading, the entrepreneur idea is the basis of the enterprise finding the opportunity to exceed others, and the exchange and share of information resources enable the company to adapt to the dynamic market timely and update the development goals constantly.In the study, on the one hand, theoretically, the study combines the framework of the theory of competition strategy of late-entrants with the theory of corporate upgrade as well as the theory of upgrading along the global value chain. It is a supplement of the former studies which analysis the late-entrants, the company upgrade and the GVC upgrade separately. On the other hand, in accordance with the case analysis of an influential late-entrant in plant extracts market of biological science and technology industry, which enriches the study of enterprises upgrading along the global value chain in perspective of China's plant extracts industry. And it is also a reference of operation planning and development strategy for the homogeneous company.