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Sunner Development Co. Ltd.: Integrator in the Chinese Poultry Industry Case Solution & Answer

This Case is about MERGERS & ACQUISITIONS

PUBLICATION DATE: November 25, 2015 PRODUCT #: W15544-HCB-ENG
Sunner Development Co. Ltd Integrator in the Chinese Poultry Industry case solution

Sunner Development Co. Ltd. was primarily founded as a chicken hatchery in China. Its CEO shortly enlarged the operation to become the first firm in China to incorporate all three phases of the poultry sector: chicken farming, feed creation and meat packaging. In the process, he’s rejected the three prevailing poultry sector business models: disintegration, consisting of largely unaffiliated companies that specialize in only one area and rely on position contracts to form their co-operation; buyback, whereby companies not only sell feed to chicken farms but also buy back the mature broilers; and subcontracting, where unaffiliated farms are paid a fee to raise chickens. The chief executive officer must assess whether the total integration model is sustainable in the future.

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