Study On Diversification Strategy Of GaoJing Real Estate Company

Diversification strategy is one kind of strategy principles of the development of enterprises. It refers to one of the long term managerial principles and ideas that enterprises implement in several relevant or irrelevant industries in order to enlarge their scales, occupy market and create profit. In other words, diversification strategy allows enterprises to obtain increasing profits and opportunities in creating profits.GaoJing Real Estate Company focuses on development of commercial housing and its essential competitive advantages are technology, capital, brand and connection with clients. The challenge of the company in the near future is expanding to other industries. Basing on the actual conditions of the company, analyzing inner circumstances—resources of businesses, abilities of strategy and the core capabilities and outer environments—macroscopic environment, the basic trends of the industry development and competitive environment of the industry, this essay tries to give out a solution to the company. Nowadays, the eco-structure of the estate industry has been changing in China because of the hard economic situation under the environment of global financial crisis which has led to adjusting periodically. As a result of the slowing growth and the decreasing profit ability over the whole estate industry, GaoJing Estate Company has to seek new profits in other industries rather than just relying on the estate industry to make the company surviving and sustainable development. This essay also analyses and evaluates the resources and abilities of the company using the method of SWOT matrix, according to estimating the strengths, weaknesses, opportunities and threats of the company. On top of that, this essay evaluates the future of the company working in diversification businesses by analyzing the industry attractiveness—competitiveness and concludes to the resolution of company businesses on diversification strategy:basing on commercial housing businesses, developing businesses on subsidized housing and fundamental facilities cooperating with the government, and exploiting chain restaurants and agencies with Tai Wan-style and so on. At the end of the article, it gives the policies on how to implement and control the diversification strategy in the company.