Operation Performance Of The "Whole Industry Chain" Business Model

Chinese dairy industry has experienced many years of prosperous development,and then has encountered many rounds of dairy product safety accidents.That have caused consumers to feel a lack of trust in the quality of Chinese dairy products.Currently,Chinese dairy industry has been resumed,but the impact of international brands and cross-border e-commerce,the industry is still fierce competition.Due to the dual pressures of food safety and industry competition,dairy products companies need reform.In 2009,COFCO Group acquired Mengniu Dairy,which was in great condition.After that,COFCO quickly applied its “Whole Industrial Chain” business model to the strategic development of Mengniu Dairy.The operation of the “ Whole Industrial Chain” business model has created tremendous commercial value for Mengniu Dairy.Therefore,the analysis of the value creation path of the “ Whole Industrial Chain” business model of Mengniu Dairy and its operational performance has decisive guiding significance for the sustainable development of dairy enterprises in our country.This paper takes Mengniu Dairy as the case company and uses the relationship between enterprise growth theory,synergy theory,value chain theory and competitive advantage theory to derive the mechanism of the “ Whole Industrial Chain” model.It combines the motivation and evolution of Mengniu Dairy's business model of “ Whole Industrial Chain”to analyzes its value realization path.Then,the operational performance of Mengniu Dairy is divided into the business segment level and the overall level.Through the horizontal comparison with different time and the longitudinal comparison with the dairy industry,the paper analyze the dynamic performance of the financial indicators of Mengniu Dairy in the process of the “ Whole Industrial Chain” business model,and evaluate its ability of creating value.Through the case analysis of Mengniu Dairy,this paper draws the following conclusion.The first,after the “ Whole Industrial Chain” business model is laid out,the operational performance of Mengniu Dairy has been effectively improved,which has increased Mengniu's competitive advantage.The second,during the process that Mengniu Dairy layout the “ Whole Industrial Chain” business model,the excessively rapid pace of enterprise expansion caused a negative effect of its internal integration.The third,Chinese dairy products enterprises should follow the development of the industry and implement the“ Whole Industrial Chain” business model.This paper proposes the following suggestions based on the conclusions.Firstly,it is recommended that Mengniu Dairy should focus on the layout and governance of the “ Whole Industrial Chain” at the same time,and in the aspect of layout,it should select the business sector with development potential to put great investment according to the development trend of the industry.In terms of governance,Mengniu Dairy should pay attention to coordination between corporate resources,technological innovation,and marketing.In addition,it is also recommended that Chinese dairy products enterprises should improve their professional skills to cope with the opportunities and challenges brought about by the increasing market concentration in the dairy products industry in the future.