Fosun Pharmaceutical Industry Chain Vertical Integration Strategy:Motivation,Implementation And Performance

With the development of the national economy,population aging and health problems have become increasingly prominent,the prospects for the development of pharmaceutical industry in China is huge,but the industry started late,weak foundation and other technical problems,and the pharmaceutical industry in developed countries there is still a huge gap,lack of international competitive force.Since the Fifteen Plan,the pharmaceutical industry has entered the industrial planning ranks of China for four times,showing the importance of the state to the development of the pharmaceutical industry.As a national strategic support industry,the formulation and implementation of China's pharmaceutical industry strategy determines the development speed and quality of the pharmaceutical industry.The vertical integration strategy of industry chain can gain competitive advantage for enterprises,reduce transaction costs and get the right to speak,which provides an innovative development strategy for the pharmaceutical industry.This paper based on the background of the pharmaceutical industry,from the perspective of vertical integration of industrial chain,select pharmaceutical industry representative of China Fosun Pharmaceutical as an example,to explore the implementation of the current status of pharmaceutical industry chain vertical integration strategy,implementation path and effect on corporate performance.Firstly,on the basis of collecting and reading a large amount of data and documents,this paper theoretically analyzes the plight and integration of the current pharmaceutical industry chain.Secondly,In the pharmaceutical industry chain background,Fosun Pharmaceutical as an example,explore the motivation,foundation and implementation path of Fosun Pharmaceutical to implement the vertical integration strategy of industrial chain,which is manifested in the asset specificity,information asymmetry and value chain optimization under the impetus of enterprise with outstanding R&D technology,perfect the strategic control system and stable financial support,by way of mergers and acquisitions to implement and improve the industry chain vertical integration strategy.Again,This paper summarizes the annual report data of Fosun Pharmaceutical since the implementation of the industrial chain vertical integration strategy in the past 15 years since 2002,select relevant indicators from five dimensions of profitability,operation,debt repayment,growth and cash,first,through a single index from five dimensions of Fosun Pharmaceutical and pharmaceutical industry average level of comparative analysis,from five dimensions the establishment of index system of comprehensive analysis,trend analysis of Fosun Pharmaceutical 15 years of enterprise performance by using the method of principal component,and to the enterprise caused by adopting the strategy of financial risk analysis.The case study shows that the vertical integration strategy of industry chain can gain competitive advantage,reduce cost,and improve long-term performance of enterprises with competitive advantage.It provides the basis for the general enterprise to decide whether to adopt the strategy of vertical integration of the industry chain.Finally,the paper summarizes the research results,and puts forward the corresponding suggestions and shortcomings.The performance of Fosun medicine shows,the long-term performance of enterprises can be improved by adopting the strategy of vertical integration of industrial chain,on this basis,the risks of this strategy are also analyzed,including payment methods,financial management and innovation technology,at the same time,tracking analysis of Fosun Pharmaceutical industry chain vertical integration strategy before,after and after the three phase of the strategic situation,the reasons and effects of the vertical integration of Fosun medicine are explained.Whether an enterprise is suitable for industrial chain vertical integration strategy needs to be considered in many aspects,this research method using a combination of theory and case,can provide explanations for the applicability in the practice of industrial chain vertical integration strategy in the enterprise,at the same time,based on the rich theoretical research,but also enrich the theory and practical significance.