Study On The Optimization Of Diversification Strategy Of J Group

With the increasingly fierce market competition and maturer economic development in China,diversification strategy is held as a significant choice by many enterprises to capture and expand the market.As a steel production and consumption giant,China boasts many steel enterprises with high competitiveness.However,influenced by the rising price of steel raw materials and serious overcapacity of the steel industry,the steel industry will be in a low-profit state at this stage and even for a long time in the future.Contradiction between huge investment and minor return has been revealed,forcing the transformation and upgrading of steel enterprises to seek diversified development to avoid business risks and improve their competitiveness.However,not all the diversification strategies of enterprises are successful.A wrong diversification strategy will increase the operation risk of enterprises,even leading to the capital chain rupture and bankruptcy.It is of great significance for an enterprise's fortune whether it has implemented a correct diversification strategy.Against the background,this paper takes the large and medium-sized private steel enterprise Group J as the research object.First of all,according to the results of interviews with the management of Group J and the analysis of its current situation,a conclusion has been drawn that Group J has the problems of unbalanced business development in the implementation of diversification strategy.In order to resolve these problems,the author establishes a SWOT matrix combined with its internal and external environment.By analysis,it is considered that Group J should continue to implement the diversification strategy,and a combination strategy of differentiating service should be adopted to ensure a balanced development of all services in the group.On this basis,combined with Boston matrix analysis,the author proposes a detailed specific plan of adopting the combination strategy: keep a foothold on the iron and steel business,integrate resources,steadily expand iron and steel business,develop high-tech projects,expand and strengthen refined steel deep processing business,lay emphasis on incubating iron and steel logistics and real estate,integrate and shrink chemical pharmaceutical business and realize the balanced development of diversified industries.At last,specific optimization measures are proposed according to the detailed plan,and guarantee measures from more than six aspects such as optimizing the organizational structure,improving the financing ability,optimizing the allocation of human resources,strengthening the construction of enterprise culture,paying attention to risk management,and improving the ability of scientific and technological innovation.By theoretical research and a large quantity of data analysis,this paper proposes the optimization orientation,optimization measures and guarantee measures in the future development of Group J aiming at its problems of unbalanced services.The imbalance of business development is also common in other large steel enterprises in China.The research on the optimization of diversification strategy of Group J in this paper is of practical significance for its future development,and can also provides reference for other steel enterprises that have implemented and are preparing to implement diversification strategy.