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Yingneng Com from 20065438+0 September 18.
Diversification, also known as diversification or diversification, refers to the strategy of an enterprise to run a number of different businesses simultaneously in a number of related or unrelated industrial fields. In recent years, enterprise diversification has been a research topic in theoretical and business circles. At present, there are two completely different views: one is that diversification of existing resources can avoid risks and realize the enjoyment of resources, resulting in1+1> 2. It is the only way for the development of modern enterprises. Another view is that the diversification of enterprises will lead to the dispersion of manpower, financial resources and material resources, increase the difficulty of management and reduce efficiency. In fact, diversification, as a business strategy and model, has no advantages or disadvantages in itself. Whether the external environment and internal conditions of enterprises meet the requirements of diversified operation is the key to the success or failure of enterprises in applying this strategy. If the two are consistent, you can succeed, otherwise, you will fail. So, what are the factors that affect the success or failure of diversification?
First, the contradiction between supply and demand and the degree of market competition.
The contradiction between supply and demand and the degree of market competition are important aspects of the external environment of enterprises, and are also the basis for the implementation of enterprise systems and business strategies. Because enterprises are in different industries, the external environment is very different.
At the beginning of reform and opening up, some entrepreneurs with advanced consciousness implemented diversification strategy and gradually expanded their business scope to other fields, almost all of which were successful. As we all know, the success of enterprise diversification at that time was due to the good external environment of diversification. First of all, it was the era of shortage economy and the market space was very large. Secondly, the production and operation of enterprises focus on expanding scale and improving production capacity, and the market competition system has not really been established. Competition in most industries is weak, and industry barriers have not yet formed, which provides opportunities for new members or new products to enter. Therefore, in this specific external environment, the success of enterprise diversification is natural.
For today's enterprises, the external environment has undergone tremendous changes. Shortage economy has basically ended in most fields, and some industries have relatively overproduction. In this case, the vast majority of enterprises are operating at a low profit or even at a loss. If enterprises ignore the changes in the environment and blindly diversify for the sake of diversification, they will not only fail to achieve their goals, but will bring greater risks to enterprises. In recent years, the failure rate of diversified enterprises has greatly increased, which proves this truth. When early listed companies went public, the concept of diversification was very popular, resulting in a large number of comprehensive enterprises. However, because these enterprises have been under the planned economy system for a long time, they lack the experience of market-oriented capital operation. At the same time, due to the defects of governance structure, they often lack due caution and restraint in investment decision-making, which leads to blind investment expansion of many enterprises. As a result, the front line is too long, the main business is vague, and the coordination ability of various businesses is poor, which eventually leads to the failure of the enterprise. Comprehensive enterprises occupy a large proportion in the T family, which is largely related to this. The famous economist Stiglitz said: "A certain system may be very effective at a certain stage of economic development, but it may become problematic at another stage." This is undoubtedly the motto of enterprise diversification.
Second, the position of the industry or product in the life cycle.
According to the viewpoint of development economics, any product has to go through four stages: input period, growth period, maturity period and decline period. In different stages of the industry or product cycle, the difficulty of enterprise management is different, and the strategies adopted by enterprises should also be selected. When exploring new fields, enterprises should strive to enter the investment or growth industries or products, and avoid entering mature or declining industries or products, which is determined by their competitiveness, development potential and industry barriers. Therefore, it is very important to accurately predict and judge new industries and new products, which is the key factor for success in entering new fields. If the enterprise blindly enters the industry and products in the late life cycle, it will not reduce the risk, but will bring greater risks.
Third, the correlation between new industries and main business plays a key role in the success or failure of diversification.
Relevance can be divided into tangible connection and intangible connection. The tangible connection is based on the same market, marketing channels, production, technology, procurement, credit and talents, and the value activities between related businesses can be enjoyed. Intangible association refers to enjoyment based on management, brand and goodwill. When an enterprise establishes diversification on the basis of tangible contact rather than intangible contact, its diversification has a greater chance of success. The reason why tangible connection is easy to succeed is mainly because the competitive advantage of enterprises can be extended to new fields, realize resource transfer and * * *, and it is easy to establish and develop in new industries. Therefore, the rational way of diversification strategy is: limited related diversification strategy supported by core expertise and core industries. The reason why many enterprises fail in diversification is that the ways and means of diversification are unreasonable. Enterprise decision-making should be based on its own advantages, and diversification should also be based on whether new industries or products can give full play to and enhance their advantages, and judge whether their existing advantages can be extended to target industries or products. In recent years, the wave of mergers in western countries has risen again. One of the most striking features is to focus on related industries and pursue business relevance as much as possible.
It has been pointed out that the strong correlation of diversification is not conducive to diversifying business risks, because similar industries or products are often prosperous and lose. This statement has some truth, but it should be analyzed dialectically. There is a very important rule in the business world, that is, "Don't do it if you are not familiar with it", and only the most familiar things have the least risk.
In recent years, there are many examples of diversification failure in China. Shi Yuzhu, president of Giant Group, reflected on one of the four major mistakes of his failure, that is, blindly pursuing diversification. The computer industry, real estate industry, health care industry and other industries that the giant company set foot in span too much, and the newly entered field is not an advantage, but it is eager to set up a stall, and the limited funds are firmly stuck. This huge building caused a financial crisis and almost brought down the whole company.
Sun Shen's corporate strategy has always been "vertical development as the mainstay, horizontal development as the supplement", that is, the development of health products as the mainstay, supplemented by diversified development. However, since 1993, the sun god has sounded the horn of diversity. Diversification makes the original consistent strategy of enterprises become "vertical development and horizontal development go hand in hand" Within one year, 20 projects including petroleum, real estate, cosmetics, computers and hotels were launched, and "Economic Development Corporation" was set up in Xinjiang, Yunnan, Guangdong and Shandong to make large-scale acquisitions and investments. It is understood that the funds transferred by Sun God to these 20 projects amounted to 340 million yuan. However, none of these projects have become the new "sun gods". Unfortunately, 340 million is gone. After finishing the early accumulation and stepping into sustainable development, I thought I could enter any field with high profits, and finally let the sun god fall into the trap. By 1997, Apollo lost1590,000 yuan for the whole year. Its share price in Hong Kong dropped to HK$ 9 from 2.2 yuan in the previous year.
Fourth, the fundamental support of enterprise diversification-core competitiveness
When it comes to the diversification of enterprises, we must mention the core competitiveness of enterprises. Why are some of our enterprises able to maintain the development momentum of steady growth in performance, while others are short-lived? The key is to see whether the enterprise has core competitiveness.
Most excellent foreign enterprises only invest in one industry, gradually cultivate their core competitiveness in this industry, and then gradually consider diversification on this basis.
No matter what form of diversification an enterprise implements, it is very important to cultivate and expand its core competitiveness. Stable and competitive main business is the main source of enterprise profits and the foundation of enterprise survival. Enterprises should strive to expand market share and maximize economies of scale by maintaining and expanding their familiar and good main business, and take improving the core competitiveness of enterprises as the first goal and the life of enterprises. On this basis, give consideration to diversification. Excellent enterprises, in the choice of business areas, first determine their core main business, actively cultivate core competitiveness, and on this basis consider diversification (related diversification → unrelated diversification).
The success of Haier's diversification strategy is as follows: First, adhere to the professional operation of refrigerators for seven years, form its own core competitiveness in management, brand, sales and service, and occupy a leading position in the industry. From 1992, it gradually started to enter from highly related industries according to the degree of correlation, and then began to enter into moderately related and unrelated industries. First of all, we will enter the refrigerator and air conditioning industries with the same core technology (refrigeration technology), the same market sales channels and the same user types, and gradually March into the household appliances and knowledge industries.
The successful experience of Haier Group's diversification can be summarized as follows:
1. Diversification focuses on familiar business areas, supplemented by a small number of large-span diversification.
2. Make use of intangible assets (brands and management methods) and compatible marketing channels with low marginal cost to revitalize existing assets, realize diversification and achieve the goal of low-cost diversification.
3, in addition to senior management, in the merged enterprise, a large number of management talents familiar with the original enterprise's industry are used.
In reality, some enterprise groups advocate the mixed development of science, industry and trade, which is not very suitable. Because the longer the enterprise front is stretched, the more dispersed its strength and the weaker its control ability. In the Asian financial crisis, some large Korean enterprises went bankrupt one after another, and excessive diversification was an important reason. In recent years, there has been a trend of concentrating and returning to the main business in western countries, which shows that enterprises have reflected on excessive diversification.
The scientific idea of enterprise diversification is to focus on developing 2-3 projects with a certain scale and considerable strength on the basis of highlighting core competence, thus forming a strong support for the main business, which is already very remarkable for an enterprise.
Analysis of success or failure factors of enterprise diversification strategy: 1+ 1 Can it be greater than 2?
Diversification has always been a research topic in theoretical and business circles. At present, there are two completely different views: one view holds that diversification of existing resources can avoid risks and realize the enjoyment of resources, resulting in1+1> 2. It is the only way for the development of modern enterprises; Another view is that the diversification of enterprises will lead to the dispersion of manpower, financial resources and material resources, increase the difficulty of management and reduce efficiency. In fact, diversification, as a business strategy, has no advantages or disadvantages. The key to the success or failure of an enterprise in applying this strategy lies in whether its external environment and internal conditions meet the requirements of diversified operation. If the two are consistent, you can succeed; Otherwise, it is doomed to fail. So, what are the factors that affect the success or failure of diversification? 1. The contradiction between supply and demand and the degree of market competition are important aspects of the external environment of enterprises, and also the basis for enterprises to formulate and implement business strategies. At the beginning of reform and opening up, some entrepreneurs with advanced consciousness implemented diversification strategy and gradually expanded their business scope to other fields, and almost without exception, they achieved success. As we all know, the success of enterprise diversification at that time was due to the good external environment: first, the market space was large in the era of shortage economy; Secondly, the production and operation of enterprises focus on expanding scale and improving production capacity, and the market competition system has not really been established. Competition in most industries is weak, and industry barriers have not yet formed, which provides opportunities for new members or new products to enter. Therefore, in this specific external environment, the success of enterprise diversification is logical. For today's enterprises, the external environment has undergone tremendous changes. Shortage economy has basically ended in most fields, and some industries have relatively overproduction. In this case, the vast majority of enterprises are operating with little profit or even no profit or loss. If enterprises ignore the changes in the environment and blindly pursue diversification, they will not only fail to achieve their goals, but will bring greater risks to enterprises. In recent years, the failure rate of enterprises caused by diversification has greatly increased, which proves this truth. The concept of diversification was very popular at the beginning of the early listing of listed companies. However, these enterprises lack the experience of market-oriented capital operation because they are under the planned economy system for a long time. At the same time, due to the defects of governance structure, many enterprises often lack due caution and restraint in investment decision-making, leading to blind investment expansion. As a result, the front line is stretched too long, the main business is blurred, and the coordination of various businesses is insufficient, which eventually leads to the failure of the enterprise. The famous economist Stiglitz (1999) said that "a certain system may be very effective at a certain stage of economic development, but it may become problematic at another stage". This is undoubtedly a comment on the failure of enterprise diversification. 2. The position of the industry or product in the life cycle According to the marketing point of view, any product has to go through four stages: investment period, growth period, maturity period and decline period. In different stages of the industry or product life cycle, the difficulty of enterprise management is different, and the strategies adopted by enterprises should also be different. When exploring new fields, enterprises should strive to enter the investment or growth industries or products, and avoid entering mature or declining industries or products, which are determined by competitiveness, development potential and industry barriers. Therefore, when companies enter new industries and new products, sometimes they will not reduce risks, but will bring greater risks. 3. The correlation between the new industry and the main business plays a key role in the success or failure of diversification. Correlation can be divided into tangible correlation and intangible correlation. Tangible connection is based on the same market, channels, production, technology, procurement, information, talents and other aspects, and value activities between related businesses can be enjoyed. Intangible association refers to enjoyment based on management, brand and goodwill. When an enterprise establishes tangible contact with its diversification instead of intangible contact, its diversification has a greater chance of success. The success of tangible connection is mainly because the competitive advantage of enterprises can extend to new fields, realize resource transfer and sharing, and it is easy to establish and develop in new industries. Therefore, the decision-making of enterprises should be based on their own advantages, and diversification should also be based on whether new industries or products can give full play to and enhance their advantages, and judge whether their existing advantages can be extended to target industries or products. In recent years, the wave of mergers in western countries has risen again. One of the most striking features is to focus on related industries and pursue business relevance as much as possible. It has been pointed out that the strong correlation of diversification is not conducive to diversifying business risks, because similar industries or products are often prosperous and lose. This view has some truth, but it should be analyzed dialectically. There is a very important rule in the business world, that is, "Don't do it if you are not familiar with it", and only the most familiar things have the least risk. In recent years, there are many examples of diversification failure in China. Shi Yuzhu, president of Giant Group, reflected on one of its four major mistakes, namely, blindly pursuing diversification. The construction of the Giant Building led to a financial crisis, which almost brought down the whole company. Guangzhou Sun God Company's strategy has always been "vertical development as the mainstay, horizontal development as the supplement", that is, the development of health care products as the mainstay and diversified development as the supplement. But from 1993, the original strategy of Helios Company was "vertical development and horizontal development go hand in hand". Within one year, he was cheated into 20 projects such as oil, real estate, cosmetics, computers and hotels, and successively set up "economic development corporation" in Xinjiang, Yunnan, Guangdong and Shandong to make large-scale acquisitions. It is understood that the funds transferred by Sun God to these 20 projects amounted to 340 million yuan. However, none of these projects became the new "Sun God" and lost 340 million yuan. When finishing the early accumulation and stepping into sustainable development, I think I will blindly enter any field with high profits, and finally let the sun god fall into the trap. By 1997, Sun Shen's annual loss was1590,000 yuan. In the end, Hong Kong's share price dropped to 9 cents per share from 2.2 yuan dollars in the previous year. 4. The diversification of enterprises depends on the core competitiveness. The diversification of enterprises must involve the core competitiveness of enterprises. Why are some of our enterprises able to maintain the development momentum of steady growth in performance, while others are short-lived? The key is to see whether the enterprise has core competitiveness. Most successful foreign enterprises only invest in one industry, gradually cultivate their core competitiveness in this industry, and then gradually consider diversification on this basis. No matter what form of diversification an enterprise implements, it is very important to cultivate and expand its core competitiveness. A stable and competitive main business is the main source and survival foundation of enterprise profits. Enterprises should maintain and expand their main business which they are familiar with and good at, take the promotion of core competitiveness as the first goal, take into account diversified operations on this basis, and strive to expand market share in order to achieve economies of scale. In the choice of business field, successful enterprises always determine their main business first, actively cultivate their core competitiveness, and then consider diversification on this basis. The context of Haier's diversification strategy is as follows: First, adhere to the professional operation of refrigerators for seven years, form its own core competitiveness in management, brand and sales service, and occupy a leading position in the industry. Starting from 1992, it gradually entered from highly related industries according to the degree of correlation, and then began to promote to moderately related and unrelated industries. First of all, we will enter the refrigerator and air conditioning industries with the same core technology (refrigeration technology), the same market sales channels and the same user types, and gradually expand to the black appliances and knowledge industries. In reality, it is inappropriate for some enterprises to blindly pursue diversification and engage in excessive diversification. Because, the longer the enterprise front is stretched, the more dispersed its strength and the weaker its control. In the Asian financial crisis, some large Korean enterprises went bankrupt, and excessive diversification was an important reason. In recent years, the concentration of main business in western countries has risen and returned to the trend of main business, which shows that enterprises reflect on transitional diversification. The scientific idea of enterprise diversification is to focus on developing 2-3 projects with a certain scale and considerable strength on the basis of highlighting core competitiveness, thus forming a strong support for the main business. The correct development idea is the coordinated development of main business and diversified management.