What kind of enterprise diversification strategy is effective?

Diversification strategy is to seize opportunities and enlarge enterprise value in the unification of "* * * and market" or "* * and technology". At the same time, effectively manage the business that "* * *" does not match. There are four main strategic means: starting from scratch, acquisition, divestiture or separation, and joint venture.

"Starting from scratch" and acquisition are two ways of diversification. The starting point of diversified expansion must not be "curious, fun, and want to do something different". Must be based on "what is our current business? What should it be? " Only in this way can we give full play to our existing advantages and seize future opportunities. Starting from scratch is to incubate and cultivate yourself, not to buy. It seems to take a long time to do it by yourself. In fact, if the acquisition wants to achieve the expected goal, the integration will take at least 2-3 years. The success rate of acquisition is about 50%, and the failure rate of "starting from scratch" is even higher, perhaps two-thirds. But in most cases, the failure of starting from scratch can be found early and terminated before a lot of investment.

The third way is "stripping or separation", which separates the business that does not match or partially match the same sex of the enterprise. Give up, sell, transfer or close unsuccessful projects or businesses and "boss face project" actively, purposefully and systematically. This is the most effective way to prevent the waste of resources and the deterioration of infection.

The fourth way is to establish a joint venture. Combine their respective advantages to form a joint enterprise and form a new enterprise with "chemical reaction" different from their respective components. Or combine two enterprises that can't reach the minimum effective scale to form a joint venture. There is also a joint venture based on political and cultural reasons. For example, after World War II, European and American companies used technology and products, combined with the advantages of Japanese companies in terms of customers, market, language and culture, to establish joint ventures. In the early days of China's reform and opening up, many joint ventures were established in medicine, communication equipment, automobile and other industries. At present, the country has opened up areas dominated by state-owned enterprises, and private enterprises want to enter, many of which are joint ventures.