The Reflection On Diversified Development Of Seastar Group

To realize sustainable development is what every company with lofty ideal aimed at. The strategy of diversification, one of the important growing strategies, is widely adopted by large-scale enterprises across the world. Since last century, diversified management has become the inevitable choice for all companies that have actual strength. But it is proved from practice that diversified management has both advantages and disadvantages. That one company adopts diversified management is bounded by many conditions, which is highly related with the macro environment and internal conditions of one company.Seastar Group is a private enterprise that is given high priority by Shan'xi Province. It was founded in 1988. It has grown from a small-sized private technological research institute at the beginning into a multinational large-scaled nterprise group with total assets reaching 4 billion yuan and number of staffs exceeding 6000, which owns one listed company, over 40 holding & joint stock companies and two overseas companies. It is one of the most representative private enterprises, whose developing process is almost one epitome against the backdrop of intensified reform of opening up and market economy process. Seastar Group adopts diversified strategies while diversified management lines from the beginning to the now on its development, supplying valuable reference and example for both beneficial explorations of internal mechanism of its diversified development and stepping on the road of sustainable development of our companies.This article summarizes relevant theories of strategic management, diversified management strategic and competitive advantages, conducting case analysis on diversified practice of Seastar Group in different stages.Using case analysis method,dynamic analysis method and literature conclusion analysis method,it categorizes the whole developing process of Seastar Group from 1988 to the now into three stages:stage of primitive accumulation, stage of diversified development, stage of diversified expansion. Three questions are raised centring on diversified strategies:first, why diversification of Seastar Group gained certain success in the earlier period? Second,why did Seastar Group step on recession in the later period? Third, what strategies can Seastar Group carry out to realize sustainable development and why.Aiming at the above three questions,this thesis tries to seek answers to these three questions with strategic viewing angles by replying on relevant theories and competitive advantages of diversification,reflecting on influences on Seastar Group imposed by no-relevant diversification and further revealing internal mechanism and relevant factors of strategic selections in the course of market economy for our domestic companies.