Diversify Strategy Valuation And Suggestion Of Nanjing GOLDEN Corp

In today's world, more and more corporations were experiencing cut throat competitions due to economic globalization and extensive application of Internet. Many companies adopted diversification strategies in an effort to strengthen competitive advantage, avoid business shrinking, and gain exceptional profit at the same time. Yet the industry surrounding diversified businesses is complex and a unique organizational structure is required to be compatible with it. As a result, the success of a diversified corporation will largely depend on whether it can choose the right business combination based on its own resource, capability and core competence. However, corporations of ten face high risk when there is lack of understanding towards diversification that may well result in unwise dispersion of resources, and shift of business concentration.Nanjing GOLDEN Inc., Ltd. is a highly diversified corporation originated from a chemical trade enterprise. Its business covers industries ranging from pharmacy, network,transportation,feed and so on. However, the expansion of scale did not create exceptional profit for Golden Group. Instead, it triggered the shrinking of its core businesses.From the angle of corporation management, the paper shall conduct case studies on the diversified operations of Golden Group. Starting with the current operating situation, a series of problems and the causes shall be touched with in-depth discussion. The paper shall also point out that under the new social trend, how corporations should go about harnessing their limited resources to their advantageous businesses so as to be assured to develop in a healthy mode. This also consists the studying purpose of the paper.It is clear that it is not possible for Golden Group to gain dominant advantages in various industries it operates in due to limitations of its resource, capability and core competitiveness. Thus, it is especially important for the Group to establish a long term competitive advantages by streamlining its businesses with concentrated resources, while at the same time, foster and strengthen the Group's core competitiveness. The current business, according the Michael E. Porter's"five power"analytical frame, can be repositioned. Ridding the balance sheet of bad asset such as the investment bonding company and so on, tightening cost control for the network company , allow it for full autonomy for business operation. Instead of burdening the Group for any bad performance, it can also be separated gradually with the development of the Group and market changes; focus more on the trade of pharmaceutical and chemical sector, making sure the investment is well managed. Treat chemical transportation field with discretion,ect.Through in-depth analysis, the paper holds: 1. Strengthen corporation's core competitiveness by fostering and encouraging innovation. 2. Be prudent about adopting which industry to choose for diversification.Which builds the bridge to success. Public trade companies are excellent examples of corporations in the country; they make the miniatures of economic development. The diversification problem in Hoist Group is quite representative in the development of medium and small businesses in China. There are a lot to conclude.