Abstract.Abstract. Based on the idea of theory combination, this paper understands the connotations of industrial chain from different perspective through the analysis of experts’ research. In addition, it makes analysis on the structures of the industrial chain and offers a reasonable theoretical analysis framework for relevant research.
Key words： Industrial chain; connotation; structure
1.Introduction
The social division of labour keeps on deepening. With its development, it is hardly to find a single product that is accomplished entirely by an enterprise. Prior to centralized manufacturing, individuals specialized in the production of one product, trading their final product for final products made by other individuals. This can refer to specialized trades within a community, or also the specializations of whole communities in contact with each other, such as one community making clothes, one making tools, and another producing food, which they exchange. Social division of labour greatly increases productivity, because individuals can produce the product in which they have a comparative advantage, and trade it to the individuals who cannot efficiently produce it for the products they need. The social division of labour creates market exchange and prices, by comparing the cost and time of making each product. Industrial chain is thus formed. Value chain is a chain of activities for a firm operating in a specific industry. Based on the idea of theory combination, this paper understands the connotations of industrial chain from different perspective through the analysis of experts’ research. The business unit is the appropriate level for construction of a value chain, not the divisional level or corporate level. Products pass through all activities of the chain in order, and at each activity the product gains some value. The chain of activities gives the products more added value than the sum of the independent activities" values. The industrial chain has been the key problem of concern to the theoretical circle, enterprise circle and the industries. However, the current theories are relatively diverse. In addition, it makes analysis on the structures of the industrial chain and offers a reasonable theoretical analysis framework for relevant research.
2.The Connotations of Industrial Chain
2.1.Research on industrial chain
The idea of industrial chain was engendered as early as some relevant arguments of the western classic economists [1].
Industrial chain is an economic concept of Chinese characteristics. Industry chain is one that contains the value chain, corporate chain, supply chain, and distance chain. These four sections are in the balance of the process of docking with each other to form the industrial chain. This docking mechanism is formed within the industrial chain model, as an objective law, it is like an invisible hand of regulation of the industry chain formation. Among the various industrial sectors based on certain technical and economic relevance, and in accordance with a specific layout of the logic of relations and the relationship between time and space to form an objective form of the chain-type association, industrial chain is a concept lying in industrial economics and mainly based on the objective existence of the various regions of the regional differences, focused on achieving the regional comparative advantages, through the coordination of the regional market specialization and inter-regional demand for multi-dimensional nature of conflicts and to industrial cooperation as to achieve regional cooperation in the form and content carriers. The essence of the industrial chain is used to describe an intrinsic connection with a business group structure, it is a relatively broad concept, and there are two-dimensional properties: the structure and value attributes. Industrial chain, there are a large number of upstream and downstream relationships and mutual exchange of value, upstream to the downstream part of the product or service delivery, the downstream part of feedback to the upstream. One of the aspects has been selected to make analysis.
Comparisons of industrial chain concept researched from different perspective
2.2Analysis of industrial chain’s connotation
This paper bases on the ideas of industrial theory integration. It talks about the connotation of industrial chain from diffeIndustrial chain is a supply chain
Industrial chain is a supply chain. It is a high-level model of how businesses receive raw materials as input, add value to the raw materials through various processes, and sell finished products to customers.
2.2.2.Industrial chain is an organizational chain
The industrial chain includes enterprises and immediate organizations that are closely related to each other on relevant industries. An industry value chain is a physical representation of the various processes that are involved in producing goods, starting with raw materials and ending with the delivered product. It is based on the notion of value-added at the link level. The sum total of link-level value-added yields total value. Therefore, it is an organizational chain.
2.2.3.Industrial chain is a value chain
Value chain is the value attribute to the industrial chain. The value-chain concept has been extended beyond individual firms. It can apply to whole supply chains and distribution networks. Through the knowledge flow in each organization, the close connection of industrial chain has been promoted and improved. Through connecting the value chains of each enterprise, a coordinated and smooth value chain system is formed. The ultimate goal of creating the values of customers is able to be realized.
2.2.4.Industrial chain is a knowledge chain
Knowledge chain represents the knowledge attribute of the industrial chain. Through concept of enterprise knowledge value and its model, we construct elementary theories and method systems of enterprise knowledge value chain management. It is of the highest logical level in the entire industrial chain.
2.2.5.Industrial chain is a space chain
Space chain refers to the distribution of the same kind of industrial chain in different areas. The distribution of industrial china has formed into the space chain [15].
This paper defines industrial chain as the followings: the implication of industrial chain has gained a large range of extension. It not only expresses the industrial “chain” structure and relationship of back and forward in order or up and down in direction, but also it represents a cluster of large scale of firms in an area or colony. Value-chain analysis looks at every step a business goes through, from raw materials to the eventual end-user. The goal is to deliver maximum value for the least possible total cost.
3.Analysis of Industrial Chain’s Structure
3.1.Basic structure
Industrial chain is composed of “chain”, “main chain” and “chain body”. A value chain is a chain of activities for a firm operating in a specific industry. The business unit is the appropriate level for construction of a value chain, not the divisional level or corporate level. Products pass through all activities of the chain in order, and at each activity the product gains some value. The chain of activities gives the products more added value than the sum of the independent activities" values. It is important not to mix the concept of the value chain with the costs occurring throughout the activities. The cutting activity may have a low cost, but the activity adds much of the value to the end product, since a rough diamond is significantly less valuable than a cut diamond. Typically, the described value chain and the documentation of processes, assessment and auditing of adherence to the process routines are at the core of the quality certification of the business. The value-chain concept has been extended beyond individual firms. It can apply to whole supply chains and distribution networks. The delivery of a mix of products and services to the end customer will mobilize different economic factors, each managing its own value chain. The industry wide synchronized interactions of those local value chains create an extended value chain, sometimes global in extent. Porter terms this larger interconnected system of value chains the value system. A value system includes the value chains of a firm"s supplier and their suppliers all the way back, the firm itself, the firm distribution channels, and the firm"s buyers.
3.2.Organization structure of industrial chain
3.2.1.In terms of industrial chain enterprise
The organizational structures of the industrial chain are generally divided into the market exchange industrial chain, full integration, quasi-integration and vertical restriction.
Full integration lessens the exchange costs of each link and fastens the speed of investment and production.
Quasi-integration concentrates the production of products, processing and marketing into an enterprise, which has got rid of the links.
Vertical restriction industrial chain refers to the behaviours of the code enterprise is not market exchange or property control.
Market exchange industrial chain and full integration are two extremes of the development of industrial chain. Under general circumstances, the structure of the industrial chain is quasi-integration or vertical restriction industrial chain or the combination of the both.
3.2.2.In terms of space
The organization structures of the industrial chain are generally divided as linear, branch-shaped, network type and core type, etc [16]. Its organization structures are shown in the figures as the followings:
Linear branch-shaped networktype core type
Industrial chain is composed of different links. The value chain framework quickly made its way to the forefront of management thought as a powerful analysis tool for strategic planning.
They formation of the industrial organizational types depends on the composition of multiple factors. The composition of factors is variable. Therefore, the organizational forms of the industrial chain are dynamic.
3.3.Boundary of industrial chain
Industrial chain is an open system and fully equipped with characteristics of organizations. Therefore, it can be said to be boundless. However, there are boundaries in the integration of the industrial chain, which is led by the core enterprises. However, the current theories are relatively diverse. In addition, it makes analysis on the structures of the industrial chain and offers a reasonable theoretical analysis framework for relevant research. In order to pursue profit maximization, organizations of different types are connected like a mutualism. The analysis has laid a solid foundation for the upgrading of the industrial chain and its integration.
4.References
[1]Ren ming-jie, yu yi-hong, ren jiang-bo. Mechanism of price transmission and regulation in the agricultural chain of china [m].fudan university press, 2006
[2]Zhang li-yang,zhang xi-cai, etc. Study on the live pig industrial chain integration of china [j].teaching and research.2007,(10):1～9
[3]Liu gang. Structure of knowledge transitions and innovations based on an industrial chain [j]. Business economics and administration,2005,(11):13～17
[4]Cao qun.research on industrial cluster innovation mechanism based on industrial chain integration [d].harbin: harbin institute of technology press,2009. 17～19
[5]Wang kai, han ji-qin. Application of the management of agriculture industry chain in the cotton industry [j]. Modern economic research,2002(5):9～12
[6]Yu yi-hong. Type of industrial chain and the benchmark of industrial chain efficiency [j]. Research on economics and mana gement,2005,(11):35～42
[7]Jiang guo-jun. Research on theory of industry chain and its stabilizing mechanism [d]. Journal of chongqing university,2004
[8]Zheng xue-yi.the construction of industrial chain and the formation of core competitiveness [j].fujian reformation,2000,(8):14～15
[9]Gong qin-lin.on the industrial chain construction and harmonious development. The economist[j],2004,(3):121～123
[10]Yang gong-pu, xia da-wei ed. Modern industrial economy[m],shanghai university of finance & economisc press co.ltd ,2005-5,50～80
[11]Liu gui-fu, zhao ying-cai. Content, characteristics and formats of industrial chains [j]. The theory and practice of finance and economics,2006,(3):114～117
[12]Zhao xu-fu. Development of china agricultural textile raw materials on the basis industrial chain[m].wuhan: wuhan university press,2006:40～42
[13]Li xin-qin, li shi-ming,lang. Structure and types analysis on industrial chain [j]. Journal of university of electroic science and technology of china(social sciences edition),2004,(4):60～63
[14]Wu jin-ming, shao chang. Research on formation mechanism of industry china: "4十4十4" model [j].china industrial economy,2006,(4):36～43
[15]Gong qin-lin. A study on construction of the regional industry chain [j].productivity research, 2007,(16):106～107
[16] Chen chao-long. The theoretical foundation, formative factors and dynamical mechanism of regional industrial chain [d]，sun yat-sen university doctoral dissertations,2007：95～95.