An analysis and optimization of the value Chain of dairy industry after the sanlu event in China

Sanlu melamine milk event shocked the whole world after the Olympic Games successfully closing in Beijing in August 2008. It was reported more than six thousands babies were affected. It was not Sanlu only, but also YiLi , Mengniu and other firms. Their products had also been found to contain melamine. The dairy industry of China was trapped in the crisis of confidence. At the same time more foreign brands took the opportunity to occupy the market. Sanlu event has brought the industry to an unprecedented crisis. So what´s the key point of China´s dairy industry? How to be out of trouble and obtain a competitive advantage? We tried to build a model based on the industry value chain to analyze and solve the problem.