The Xinwanyou Group’s Life Cycle And Diversification Development Strategy Research

In the fifties and sixties of the20th century, a trend of diversification has risen in the world and a large number of European and American multinational companies began to diversify in order to spread risk, forming a diversified development peak. In the eighties of the20th century, U.S. companies began to lose in several areas under the revival Japanese against European companies, inducing the American business community and academic reflection on the strategy of diversifying and forming a refocusing trend. After the reform and opening up, the Chinese government promoted the diversification strategy actively. Thus, more and more Chinese firms began to choose the strategy under the influence of the western developed countries. As a "neutral" growth strategy, diversification is the inevitable choice of enterprise sustainable development in the future, while the basis points are on the core competitiveness and choosing attractive market strategy. And from the perspectives of enterprise core competence theory, enterprise life cycle is a process of dynamic matching about ability and market opportunities. Therefore, only when the core competitiveness and market opportunity can be highly matched, the enterprise life cycle can continue, then diversified development strategy can be implemented. So, how to choose diversification strategy timely in different development stages is mainly discussed.This article selects Dalian Xinwanyou Group as the research object according to the enterprise life cycle theory, diversified strategy theory, core competence theory, and the match theory of core competitiveness and market opportunities, based on the dynamic match of core competence and market opportunities. First of all, analyzing the internal and external environment around the Xinwanyou Group by collecting the case background information; Secondly, identifying the life cycle of the Xinwanyou Group development, including start-up period, growth period, mature period and sustainable development period; Thirdly, making diversification strategy choice for the Xinwanyou Group in different stages of the life cycle to get different strategies of diversified practice; Finally, discussing the Chinese enterprises’ diversification strategy in view of the results of the diversification strategy practice implementation of the Xinwanyou Group.The study shows that the diversification strategy is an effective method for extending the enterprise life cycle, and it is different in different stages. The enterprise is an integrated system of the core ability and market opportunities matching dynamically. The matching degree of them is high enough to support its strategic choice. Therefore, it’s necessary for the enterprise to make an objective evaluation on the dynamic match between the internal core ability and external market opportunities, and then make the right strategic decisions.