Research On Diversification Strategy Of SD Group., LTD.

SD group is a corporation engaged in electricity transmission technologyresearch and development of the railway locomotive vehicle. In the years of businessdevelopment, enterprise scale becomes lager, economic effectiveness promotessteadily, and the whole enterprise gradually accumulates a certain influence in theindustry. But with the end of large scale railway construction and railway accidentsoccur frequently in recent year, a large number of railway infrastructure constructionproject is stopped or delayed, resulting the order of the railway locomotive vehiclesequipment manufacturing enterprise drops sharply. And with the threat of growth ofdomestic rivals, foreign strong competitors to access, the space of Group profit isfurther squeezed, enterprises survive stress increases. Limited space ofindustrialization development and resource scarcity of the railway project withenterprises expansion and long-term management, then it is necessary for expresswayoperation to take diversification strategy, to achieve industrial reforming and thesustainable development.According to the research purpose and significance, the thesis firstly straightensout the ideas and methods that this thesis studies, introduces the background and theselected reason of this subject, meanwhile describes the theory of diversificationstrategy and its business model, the impact of diversification on performance andpractice of home and abroad; then from internal and external environment of the SDgroup, analyses the opportunities and threats the company face in the industry policy,economic environment, social development and technical progress. Combining withSD group resources pointes out the advantages and disadvantages existing in companyinterior, through the SWOT analysis, the paper gets the conclusion of implement ofthe related diversification strategy for the company. The paper from principles andconditions of diversification strategy implement, demonstrates the feasibility of theSD group diversification strategy. Then, using industry attractiveness andcompetitiveness analysis method, put forward diversification strategy choice of thefuture direction of SD group, as well as industrial development strategies. Finally, thepaper analyzes the risk which the SD group may meet during the diversificationstrategy operating in future, and illustrates the measurement for safeguard.