It should be said that the diversification strategy is an important strategic choice for the development of large enterprise groups. Most enterprises in developed market economy countries, especially large multinational enterprises have almost all adopted this business strategy. From the present point of view, there are mainly two very different views; one believes that the use of existing resources, diversification, can avoid risk, realize the resource **** enjoyment, produce l 12 effect, is the road of modern enterprise development. For example, General Electric Company of the United States is considered to be a successful model of cross-industry diversification strategy. GE has become one of the world's largest and most successful enterprises by engaging in a wide range of industries, including electric power equipment, medical equipment, lighting and electrical appliances, broadcasting and media, and finance, etc. Another view is that diversification of enterprises will lead to the development of a more diversified business. Another view is that enterprise diversification will result in the dispersion of human, financial and material resources, increased management difficulty and decreased efficiency. Perhaps we all remember Shi Yuzhu, who was once a great power in the corporate world, and will not be overly unfamiliar with the Giant Group, which makes computer software and produces bio-products such as "Brain Gold". Now, when the "giant" scenery has been silent. The collapse of the "Giant" image was directly related to the building under construction at that time. But this building is only a superficial reason, after its fall and then the important reason is the blind diversification of the production and management of enterprises.
When business managers choose to diversify their business, they generally have certain reasons, and they are often very complex. Changes in the internal conditions of the enterprise and the external environment can be the reason for diversification. For an enterprise, the external environment refers to the market or ***, and the internal refers to the enterprise itself.
Causes of the external environment:
1. Demand for products tends to stagnate. The market capacity of any product or service has a certain limit. Adam bandit goo goblet? Harmony ∪ naphthalene ken argot evaluation cast? Stop aa＞ enjoin Mi Jiehuan axe hassa Dao this tandem? The following is a list of some of the most important things that you can do for your business. The most important thing to remember is that you can't afford to lose the money you've lost. The Mudi SAM Kui color timid Xing Xue Sic摹3?隽歡艘ǖ南薅龋?. The first thing you need to do is to get rid of the carpet. Kim, Ishin, Ishin, Ishin, Ishin, Ishin, Ishin, Ishin, Ishin, Ishin, Ishin, Ishin What's the matter with you? What's the reason for this? What's the matter with you? What's the matter with you? What's the reason for this? What's your favorite? What's the best way to get the most out of your life? Do you have a complete profile of the company? What are the details of the profile? What's the best way to do this? What is the best way to get the job done? What's the best way to get the job done? The first time I saw the game, I was able to get a good look at the game. /p>
2. The degree of market concentration. In the higher degree of market concentration of enterprises, a few enterprises in the market, cost and other aspects of the advantage, the enterprise to achieve than the industrial growth rate is higher than the growth rate, the only way to enter the enterprise outside of the new market. If the growth of revenue does not offset the growth of inputs, the firm has a negative marginal benefit and is prone to fail in competition. High market concentration makes it more costly for a firm to increase its growth rate in its own industry, and so prompts the firm to diversify into other industries.
3. Uncertainty of demand. Newborn enterprises often do not have an advantage in terms of capital, technology, market, etc. On the contrary, the old enterprises related to the new demand market has more advantages. Uncertainty of market demand will increase the risk of enterprises relying on a single market, thus incentivizing enterprises to pursue the risk diversification effect.
Reasons for the internal environment:
1. Internal resource potential of the enterprise. The unutilized internal resources accumulated by an enterprise are the driving force for entering new markets. Other things being equal, the higher the ratio of research and development expenses to sales, and the higher the ratio of advertising expenses to sales, the easier it is for an enterprise to actively engage in diversification.
2. Failure to meet business objectives or poor returns in the original business area. Generally speaking, if the enterprise can achieve the established goals, the enterprise to develop new industrial areas, the implementation of diversification is not much incentive; on the contrary, the enterprise's existing business policy, the greater the gap between the scope and the desired goals, the greater the possibility of adopting diversified development strategy. Diversification is different from the general business policy, involving the entry into new industries, belonging to the enterprise's program when the gap is very large, it is possible to consider changing the original program, the adoption of diversification 3. Imbalance in the development of vertical integration. Enterprises in the development of vertical integration will form a huge sales, manufacturing, procurement, raw material production, transportation and research and development ...... >>
Question 2: What are the advantages and disadvantages of enterprise diversification strategy Advantages of diversification 1, full use of funds, net return on capital, 2, industry hedge can offset the fluctuations caused by the industry cycle, so that the business performance of the enterprise is stable Disadvantages 1, the requirements of professional managers is very high, it is likely that the cost of the loss of control, resulting in a decline in overall business performance. 2, the synchronization of the industry cycle, the business crisis is doubled. If the industry cycle is synchronized, the business crisis doubled Now companies are divesting non-main business, tend to specialize, like HSBC to sell the shares of Ping An, what Apple, Microsoft, Intel, Kyocera are specialization. The basis of diversification is the complementary nature of industry! It is the cyclical hedging of industries!
Question 3: Diversification is more conducive to the development of enterprises From the perspective of development, the implementation of diversification strategy is not only the inevitable trend of enterprise development, more importantly, it is the enterprise to resist risk, play the potential to enhance the ability to expand has a positive role in promoting.
First, the implementation of diversification can effectively diversify business risks.
This is because, with the development of social productivity, people's consumption range is constantly expanding, the desire to consume is also increasing, the change of demand with obvious uncertainty, this uncertainty will cause the enterprise production, sales instability. In this case, the enterprise adopts a single product or a single market centralized management will increase the business risk. The implementation of diversification can be the enterprise's business risk is spread over a number of products, the enterprise in a certain area of business losses can be made up by other aspects of the revenue, so as to make up for the losses, balanced earnings, reduce risk. Adopting diversification strategy, through the business portfolio to diversify by the market uncertainty and fierce market competition brought about by the business risk, can increase the security of business operations, to achieve stable development.
Second, the implementation of diversified business strategy, can fully tap the potential of the enterprise's operating resources, to obtain the benefits of resource **** enjoyment.
Diversification can optimize the overall combination, rational allocation of resources, to achieve complementary advantages, integration and synergistic effects. In addition, it can avoid the opportunity cost of specialization. And strategic resources ****share in the following aspects 1) technology ****share. Enterprises can transfer the original technology to the new industry, saving the development and research costs. (2) Existing machinery and equipment, raw materials, by-products can be fully utilized, improve their utilization rate, reduce idleness and waste. (3) Brand image and sales network **** enjoy. In the implementation of related diversification, new products can be used to market the original brand image and sales network, reducing the cost of entry into the market, at the same time, the enterprise has also gained economies of scale. (4) Talent **** enjoy. Diversification in related industries, the original technical staff and management personnel do not need to be trained or only a little training can be on the job, saving the cost of human resources. (5) Benefits of internal capital flow. In the diversified business enterprise, managers can decide the allocation of funds between different business directions, to ensure that the efficiency of the industry to obtain sufficient funds for the development of capital, thereby improving the efficiency of capital .
Third, the implementation of diversification strategy, can determine the new business direction, cultivate new profit growth point.
When the existing market capacity of the enterprise reaches saturation, the enterprise can only realize its growth target through diversification. Because in the case of saturated market capacity, enterprises require a higher growth rate, it is necessary to occupy other enterprises in the market, this occupation is usually by lowering prices, the development of new products, spending more advertising and research and development costs and other means to achieve, but this behavior is not only costly, but also may be encountered in the relevant industry competitors the same means of counter-attacks, which will make the temporary advantage obtained In the existing market saturation. Therefore, in order to pursue a higher growth rate when the existing market is saturated, enterprises must develop in areas other than the original market.
Fourth, the implementation of diversification can expand the development space and field of the enterprise, and help the enterprise to realize the strategic behavior transfer.
Diversification enables enterprises to flexibly adjust their production structure and industrial arrangement in the scope of multiple products and markets according to their own conditions and changes in the external environment, thus enhancing their market adaptability. At the same time, it is also conducive to the union, collaboration and exchange between enterprises and other enterprises, especially to enable enterprises to have a broader space for survival and development. Because when the enterprise engaged in the existing industry is in decline, or because the enterprise itself in the industry is less competitive, the development prospects are not optimistic, the enterprise in order to avoid being eliminated, it is necessary to diversify, so as to realize the strategic industry transfer, that is, through the entry into new industries, so that the enterprise is gradually withdrawn from the existing industry, and will be the lifeblood of the establishment of the new industry areas.
Question 4: What factors should be considered when choosing a diversification strategy? This question is too general
The generalized answer to the generalized question is:
To consider the limited resources of the enterprise and the correlation between diversification strategies
1. Whether the enterprise has enough resources to diversify
2. Whether the enterprise can get more added value from the diversification strategy: when there is a strong correlation between the business, the enterprise can, through the activity ** * enjoy to achieve the purpose of reducing costs and increasing revenue, such as *** with the procurement, *** enjoy the channel brand reputation, etc.; enterprises can also be through the core competencies of the transfer between the different businesses, the formation of a unique competitive advantage, improve performance, such as Fuji and Kodak film, but the decline of the traditional camera, Fuji decisively entered the digital imaging and medical digital imaging field, and because film and collagen have the "collagen", the "collagen", the "collagen", the "collagen", the "collagen", the "collagen". Collagen have "glue", into the field of skin care products.
Thus, the success of a diversification strategy depends on the ability of a company to put its existing resources and capabilities to better use, and to have the resources to support these expansion activities.
Question 5: What are the ways to realize the diversification strategy of the enterprise 5 points 1, the development of vision and goals: The enterprise needs to combine its existing core competencies to develop a clear development vision and goals.
2, sorting out and selecting the target industry: large enterprises can be configured to the relative adequacy of resources to promote the development of its diversification is often "active" - around their own core competencies to take the initiative to diversify the choice of industry and layout. The layout.
3, to determine the business program and resource layout: After completing the industry sorting and selection, the diversification strategy framework has been completed most of the way, but has identified the target industry is still only a concept. Next, the management of the enterprise needs to combine the enterprise's own ability and characteristics, to design a fine business program, so that the diversification of the development of the real landing.
Question 6: What is the strategy of diversification of the enterprise reproduced the following information for reference
Diversification strategy, also known as the polygonal strategy, refers to the enterprise at the same time to operate more than two basic economic purposes of different products or services of a development strategy. Diversification strategy is relative to the enterprise specialization in terms of its contents include: product diversification, market diversification, investment in regional diversification and capital diversification.
Modes of diversification strategy
1, Horizontal diversification
Horizontal diversification is to take the existing product market as the center, and expand the business field in the horizontal direction, which is also known as horizontal diversification or professional diversification. Horizontal specialization consists of three types: (1) market development type, that is, based on existing products, to develop new markets. (2) Product development, i.e., developing products similar to existing products with the existing market as the main target; (3) Product and market development, i.e., developing new products with the newly developed market as the main target. This strategy is based on the original market, product change, and thus strong product cohesion, development, production, sales technology correlation, management changes, more suitable for the original product reputation, the market is wide and the development potential of large enterprises.
2, multi-directional diversification
This refers to the existing product, market area has some relationship, but through the development of completely heterogeneous products, markets to diversify the field of business. There are three types of multidirectional diversification: (1) Diversification of technological relationships. This refers to the development of heterogeneous products for heterogeneous markets based on research or production technologies in existing business fields. Because this type of diversification utilizes similarity in research and development capabilities, similarity in raw materials***, and similarity in equipment, it is possible to obtain a technological multiplier effect, which facilitates mass production and makes it competitive in terms of product quality and production costs. Moreover, the more different the uses between various products, the more obvious the effect of diversification becomes. However, in the case of technological diversification, the sales channels and promotion methods are generally different. This is not favorable for marketing competition. This type of diversification is generally suitable for large enterprises in industries with high technology intensity. (2) Diversification of marketing relationships. This is based on marketing activities in existing market areas to penetrate different product markets. Marketing diversification utilizes *** the same sales channels, *** the same customers, *** the same promotional methods, *** the same corporate image and visibility, and thus has the effect of sales multiplication. However, since there is no multiplier effect in terms of production technology, equipment and raw materials, it is not easy to adapt to changes in the enterprise or to cope with the risk of simultaneous aging of all products. This type of diversification is suitable for enterprises with low technological density and strong marketing ability. (3) Resource diversification This is based on the material foundation of the existing business, to enter the heterogeneous products, market areas, in order to make full use of resources.
3, composite diversification
This is a strategy to seek growth opportunities from products and markets that have no obvious relationship with the existing business field, i.e., the new business developed by the enterprise has no relevance to the original products and markets, and the required technology, business methods, and sales channels must be reacquired. Complex diversification can be divided into the following four types: (1) Diversification of financial relationships. This refers to the general relationship between the funds of the unit with the development of financing or capital increase, rising to collaborative units. (2) Talent relationship diversification. When patents or special talents are found within the enterprise, such patents or technologies are utilized to develop into new businesses. (3) Diversification of credit relationships. This refers to the reconstruction of companies that are on the verge of bankruptcy due to capital losses or other poorly managed companies on behalf of financial institutions. (4) Diversification into joint ventures This refers to the diversification of business operations by means of a capital alliance in order to withdraw from the current business field or to develop into a large-scale business.
Question 7: Strategic implementation of enterprise diversification strategy How does an enterprise enter a new business field? In the process of entering new business areas, enterprises should specifically grasp the following four choices: 1) choose the right time. The timing is not mature or miss the timing will cause strategic passivity. Too early to enter, because the enterprise is not enough preparation and problems; into too late, because of the delay in the war and lead to the failure of the entry. 2) choose a good field. Enterprises into new business areas, in grasping the timing should pay attention to the choice of good areas to enter. In the new field should also pay attention to the choice of new partners, if the cooperative enterprise stormy and we are unable to control, which will certainly cause the later breakup and waste of enterprise development of a good time. 3) choose a good order. This refers to the enterprise in the new business field should have a careful and detailed plan. First into which industry, stand firm and then enter which industry, there should be a detailed plan. 4) Choose a good way. There are many ways for a company to enter a new business field. Is the establishment of new enterprises, or mergers and acquisitions; is an alliance with other enterprises or holding or equity participation, which should never be arbitrary, the enterprise should be based on their own development of the overall requirements of the strategic objectives and the actual situation of the enterprise's own careful decision-making.
Question 8: The advantages and disadvantages of enterprise diversification strategy and the scope of application The specific I'm not too clear, because I last time, but also to help you find from elsewhere, the following things you look at it, think no use, then look at other people's high opinion of the bar:
One. Compared with unrelated diversification, related diversification strategy has the following advantages:
1, you can transfer know-how, production capacity, or technology from one operation to another;
2, you can combine activities related to different operations to reduce costs;
3, you can borrow the credibility of the company's brand name in the new business;
4. Implementing related value chain activities in a collaborative manner that creates valuable competitive capabilities.
ii. Diversification faces 5 areas of risk.
1. Risks from the original business industry. Enterprise resources are always limited, diversification of technology often means that the original operation of the industry to be weakened. This weakening is not only the financial aspects of the management's attention to distraction is also an aspect of the consequences it brings is often serious. However, the original industry is the basis of diversification, the new industry in the early stage of the need for the support of the original industry, if the original industry is rapidly weakened, the company's diversification will face a crisis.
2. Overall market risk. A popular argument in favor of diversification is that diversification by "putting eggs in different baskets" to resolve business risks - the so-called "East does not shine, West shines". The popular argument for diversification is that it minimizes business risk by "putting eggs in different baskets" - so to speak. However, the extensive interconnectedness of the market economy determines that diversified industries still face the **** same risks. In other words, "eggs" are still placed in a basket, only that the basket is slightly larger. Under the impact of macro forces, the diversification of resources rather than increase the risk. A product export company can expand the scale of business through diversification, but in the face of the financial crisis conditions, the company is difficult to operate in each business with the toughest rivals to compete, and ultimately ended up being broken by the end of each.
3. Industry entry risk. Industry entry is not a simple "buy" process. Enterprises in the new industry must continue to inject follow-up resources to learn the industry and train their own workforce, shaping the corporate brand. On the other hand, the competitive situation of the industry is constantly changing, and the strategy of the competitors is also an unknown, enterprises must adjust their business strategy accordingly. Therefore, entering an industry is a long-term, dynamic process, it is difficult to use the usual investment and other static indicators to measure the risk of entry into the industry.
4. Industry exit risk. Companies tend to give little thought to the issue of exit before diversifying their investments. However, if a company is y involved in a wrong investment project but can not do the whole body to retreat, then it is likely to lead to the total loss of the enterprise. A well-designed exit channel can effectively reduce the risk of diversification. Motorola was optimistic about the satellite communications business and launched the "Iridium" program, when the last "Iridium" billions of liabilities and fall, Motorola is due to the start of the "Iridium" Iridium" program was registered as a separate entity from the beginning, and only suffered limited liability and losses.
5. Internal business risk. The new investment in the industry through the financial flow, logistics, decision-making flow, personnel flow to the enterprise as well as the enterprise's existing industrial operations to bring a comprehensive impact. Different industries have different business processes and different market patterns, and thus have different requirements for the management mechanism of the enterprise. Enterprises as a whole must integrate the requirements of different industries on their management mechanism in some form. The conflict between the multiple objectives of diversification and the limited resources of the enterprise makes the integration of this management mechanism more difficult, so that the strategic objectives of the enterprise diversification ultimately tends to compromise the internal conflict. PepsiCo's fast food ten cola diversification is faced with two industries in the capital, human resources and other aspects of the conflict, and ultimately had to set up two companies to operate independently. When enterprises diversify by merging with others, they also face the risk of whether different corporate cultures can be successfully integrated. The clash of cultures is often fatal to business operations.
Question 9: What are the advantages and disadvantages of a diversification strategy? Advantages:
1 Spreading risk
2 Access to high profit opportunities
3 Easier access to finance
4 Finding new growth in the market
5 Good use of surplus funds
6 Utilization of underutilized resources
7 Financial or other financial benefits
Disadvantages
1 Shareholders' earnings may be diluted
2 Difficult to create synergies (because you have to enter a new market, the enterprise group is the acquisition will not bring additional benefits to shareholders)
3 If the business fails, it may drag down the original business
Question 10: Classification of diversification strategy There are many different forms of diversification of enterprises, but the main can be categorized for the following four types: (1) concentric diversification business strategy (Concentric diversification). Also known as centralized diversification management strategy. It means that the enterprise utilizes the original production technology conditions to manufacture new products with different uses from the original products. For example, automobile manufacturers produce automobiles, but also produce tractors, diesel engines and so on. Concentric polygonalization operation is characterized by the original product and the basic use of the new product is different, but there is a strong technical correlation between them. (2) Horizontal diversification, also known as horizontal diversification. Refers to the enterprise to produce new products for sale to customers in the original market to meet their new needs. For example, a food machine company originally produced food machines and sold them to food processing plants, then produced harvesting machines and sold them to farmers, and later produced agrochemicals and still sold them to farmers. Horizontal polyglot operation is characterized by the fact that the basic uses of the original product and the new product are different, but there is a close sales correlation between them. (3) Vertical diversification (Vertical diversification), also known as vertical diversification strategy. It is also divided into Forward integration and Backward integration. Forward integration refers to the development of raw material industry to processing industry, and manufacturing industry to circulation area, such as iron and steel factories set up metal furniture factories and steel window factories. Backward integration polygonal operation, refers to the processing industry to the raw material industry or parts and components industry expansion, such as iron and steel mills invested in the steel mining industry. Vertical polygonal operation is characterized by the fact that the basic uses of the original product and the new product are different, but there is a close correlation between them in terms of the stage of product processing or the correlation between production and distribution. Generally speaking, backward integrated polygonal operation can guarantee the supply of raw materials and spare parts with less risk; forward integrated polygonal operation often encounters fierce competition in new markets, but the supply of raw materials or commodities is guaranteed. (4) Conglomerate diversification, also known as hybrid diversification, refers to the expansion of an enterprise's business scope that has nothing to do with the original product, technology or market. For example, the United States International Telephone and Telegraph Company, whose main business was telecommunications, later expanded into the hotel industry. Overall diversification requires sufficient capital and other resources, so it is adopted by big companies with strong strength. For example, the Baiyunshan Group of Companies, which developed from the Guangzhou Baiyunshan Pharmaceutical Factory, has implemented a variety of types of multifaceted operations in conjunction with the production of original drugs. The company set up under the pharmaceutical supply and marketing company and chemical raw materials sub-factory, the implementation of forward, backward polygonal operation; set up under the traditional Chinese medicine sub-factory, the implementation of horizontal polygonal operation; set up under the veterinary medicine factory, the implementation of concentric polygonal operation; also has a car repair service centers, construction and renovation engineering companies, cultural and sports development companies, color printing factories, restaurants and so on the implementation of the overall cross-industry polygonal operation. In addition to the above classification, western scholars R.R. Rumelt (R.R. Rumelt) used the professional ratio, associated ratio, vertical unity ratio and other three quantitative standards and intensive - diffusion of this qualitative standards, the polygonal business strategy is divided into vertical, professional, industry-centered, related, unrelated type of five types. (1) Specialized strategy. The high rate of enterprise specialization (more than 95%) is called the professional polyglot strategy, which is the strategy of expanding the existing products or business fields, such as the superstore divided into self-service thrift stores, small retail stores, department stores and so on. (2) Vertical strategy. The production of a certain product, often only take from the production of raw materials to the final product sales of the entire system in a stage, and each stage has its own complete production system. Vertical strategy is either to the upstream development, or downstream penetration. Such as a rolling mill to produce a variety of steel. Adopt vertical type polygonal strategy, further upstream development, investment and development of steelmaking, ironmaking, and even mining. (3) Industry-centered strategy. A polygonal strategy with a low specialization ratio (between 70% and 95%) is called the industry-centered strategy. In other words, it is a strategy of diversification in which a company develops new businesses that are closely related to its existing businesses, while still focusing on its existing businesses. (4) Related-type strategy. The specialization ratio of the enterprise is low (less than 70%), but the related ratio is large in the polygonal strategy, generally speaking, the core of the polygonal strategy is the management of resources. The implementation of the related type of polygonal strategy is to use *** the same business resources, to develop and the original ...... >>