The Diversification Strategy Choice And The Performance Evaluation Of Ocean Shipping Enterprises

Since the 1980s, enterprises gradually become commodity producers and the main competitors in the market . The environment that the companies have to face with is being more and more complicated. From the outside environment of the companies, the threat of competition is from all over the world, it is difficult for enterprises to exist and develop only relying on their profit obtained in a single market. What's more, the market changes more and more rapidly, which makes marketing opportunities fleeting. Under such environment, Enterprises need to grasp the market opportunities and turn them into realistic profitability. From the inside of companies, enterprises shall, basing on their own core competitiveness, expand to the associated industries so as to seek max profits.The pressure from the outside and the internal demand promote enterprises to survive and develop. More modern and more agile production methods and management mode have to be explored.. Diversification come into being and fast develop under such ground of economic globalization, marketing dynamic change and demand individualization. Strategy of diversification is usually adopted by enterprise that developed to a certain scale. Nowadays, many famous enterprises at home and abroad have adopted the strategy of diversification, and are exploring and making use of the strategy of diversificationDiversification can reduce transaction costs, improve resource allocation and utilization efficiency, effectively avoid business risks, and establish a sound corporate image. However, it dose not means there is no risk for an enterprise to engage diversification. As every coin has two sides, diversification has its disadvantages. For instance, it set higher requirement for enterprise management, maybe lead to shortage of funds, prone to mistakes in decision making and decentralize resources of enterprises.It is undeniable that most of the top 500 enterprises of the world adopted the strategy of diversification and have great scale and influence. Therefore, diversification is still an advanced practical model of management and operation for enterprises. The key to diversification relies in the environment and timing, the formulation of strategic steps, the adjustment of the resources, projects and daily operations, and the utilities of PDCA cycle. In short, diversification is a systematic project, which needs to establish a suitable mutual interaction mechanism with the core competitiveness so as to eventually achieve the strategic goals set down.In addition to the shipping, my company engage in land-based business, which involving ocean shipping, ship management and trade, and shipping supplies, ship repairing, real estate, hotel, tourism and so on. The land-based business has developed for over 20 years and has a certain scale. With the shipping market booming and the rapid development of the shipping business for my company in recent years, a higher requirement has been set for the land-based business. Under such environment, it seems urgent how to optimize the allocation of resources, enhance the core competitiveness so as to better employ the diversification strategy and improve enterprise performance through internal and external integration.Profit is an eternal theme for an enterprise. Both diversification strategy and the mode of integration shall serve this theme. Through the internal and external integration, the relationship between the diversification and corporate performance, what type of diversification strategy is able to improve enterprise performance, how to implement diversification strategy cost-effective are all what I am interested, also the concerns of this paper.