The Selection And Execution Of Business Group Corporation

Stable economic situation, increasing awareness of residents in health care, severedemographic aging, provides a good opportunity to the development of China’spharmaceutical industry. The pharmaceutical industry is a special industry will always be inthe growth stage. China’s pharmaceutical industry in the growth stage of the immature stage,And the pharmaceutical market will be the first to market concentration degree increase,Pharmaceutical market shows market in Oligopoly, The absolute share several oligopolisticenterprises will occupy the market. Shanghai Pharmaceutical Group Corporation has thebiggest central market in Central China, second national market distribution channels and thelargest number of institutions and retail outlets. It seems he should continue to expand thepharmaceutical distribution network and established pharmaceutical retail outlets in order toaccelerate the development of its pharmaceutical business operations.Meanwhile, the theoretical and empirical studies have shown both abroad and inside ourcountry that high-tech enterprises in their R&D investment has showed a positive correlationbetween innovation growth and corporate profitability. The pharmaceutical industry happensto be one of the technology-intensive high-tech industries. Marginal returns of capital andtechnology has a profound law of increasing presents the theoretical basis, the results showthat Shanghai Pharmaceutical Group Corporate shall by virtue of its strong R&D institutionsand its second position industrial sales revenue in the industry to strengthen its R&Dinvestment and take full use of technical law of increasing marginal returns of capital, forfurther development of the pharmaceutical industry business.Actually, Shanghai Pharmaceutical Group after the completion of a major reorganizationon the pharmaceutical assets in2010, make its development strategy a clear tendency, that isto accelerate the pharmaceutical distribution and retail business, and also slowdown in thepharmaceutical manufacturing business development.Firstly, we reviewed theoretical basis of this paper and the situation of research.Then itanalysis the environment of the strategic development and resource capabilities aboutShanghai Pharmaceutical Group Corporate, finally analyze and refine their core competencies.Meanwhile, we found its strategic business development tendencies through the company’smajor event summary. The limited nature of the economic resources decides that Shanghai Pharmaceutical Group Corporation accelerate the commercial development of thebusiness,while the pharmaceutical industry is bound to slow down.So to analysis thechanging trend of technology R&D intensity and efficiency and to compared with thepharmaceutical industry competition to prove the above conclusion. Pharmaceutical businessprofit rate is much higher than the pharmaceutical distribution business, Shanghaipharmaceutical group company increase the flow of business investment, as a result, R&Dinvestment intensity and efficiency below the industry average and is still a down warding. Itmust first lead to a decline in the profitability of the enterprise, through its financialprofitability, safety, liquidity,growth and compared to its comparative objects, shows thatShanghai pharmaceutical group company is in a poor financial situation. And also thelongitudinal comparison shows that a deterioration of its financial indicators. This indicatesShanghai Pharmaceutical Group Company’s direction of management strategy and thecompany’s financial strategy is disconnect. Further, through factor analysis to find the mainfactors which leads the deterioration and analysis of its causes.In the short term, ShanghaiPharmaceutical Group Corporation should slows its business strategic change, to take a gooduse of the pharmaceutical industry ‘s high profitability to provide profit and cash guaranteefor the pharmaceutical business. In the long run, it should further reorganization its assets，replace pharmaceutical industry assets for medical business assets, and eventually became oneof the oligarchs in mature market in the future.