The Research On Business Integration Methods Of Hunan Tele-Industry Group

Diversification is a basic strategy of corporation groups. However, it is absolutely necessary to revise the diversification strategy as it can't create more value or even give a poor performance. The booming development and the endeavor of breaking off the monopoly exerted by the government have led to fierce competition among telecommunications. The China-Telecom Industry which derived from the dominate company China-Telecom is one kind of products of the competition. Diversification is one of the major characteristics of China-Telecom Industry in business, but it hasn't brought extra value for the company in recent years. China-Telecom Industry has been overwhelmed in the diversified business. It's the very time to readjust the business structure. Business integration is one of the important methods of adjusting the business structure, while its complexity makes it difficult to manage for most state-owned companies. Working over suitable business integration models has become one of the key factors that determine whether a diversified company can be successful in adjusting its business structure.In this article the author begins with the introduction to the strategy of corporation groups based on the current state study of Hunan Tele-Industry, and sums up several problems such as the internal competition on overlapped business, decline of traditional business, over diversification, dispersing operation on relative business and over length of corporation chain. Then the author gives the strategy analysis of Hunan Tele-Industry according the strategic frame of China Telecom, and proceeds to point out the combination of its strategic business. In the next part, the author proposes four models of integration on how to form the strategic business: merger, concentration, diverting and synergy, further more, which followed by some emphasized analysis on matching business. Finally, the author evaluates the effects of every integration model on optimizing the structure of group, underlining major business, improving operation state and keeping corporations steady, and appends some more key factors that need to be concerned in order to ensure the integration purpose.Analyzing on Hunan Tele-Industry, this article grasps the main clue of how to accomplish the strategic object, makes the four integration models and its concrete applying scope clear through layer by layer analysis. It also proposes a set of practical study frame of business integration which can not only gather some experiences for further study but also serve as a reference for other diversified corporation studying business integration.