Strategetic Analysis Of Dairy M&A Of New Hope Group

As a way of diversification, M&A has been applied extensively. Because of some reasons, there aren't too many companies applied M&A successfully; on the contrary, lots of companies have been dragged by M&A because of blind expansion and ignoring shortcomings. Analyzing the integrated execution of M&A and diversification has been an important issue of modern enterprise strategy management.Firstly, this paper analyzes the attributes of China's dairy industry at the moment of New Hope Group's entrance, present status of New Hope Group as well as diversification development strategy. Subsequently, this paper introduces how New Hope Group's M&A strategy on dairy industry coming and carrying out. At the analysis of that strategy, the rationalities of New Hope Group's entrance into dairy industry and the way it entered have been confirmed. But because of the strategy's vagueness, weak executing capability and some negative problems happened during integration, the strategy seems to fail by now. As to New Hope Group's dairy industry's dilemma, this paper gives several advices such as strengthening the corporate integration and brand construction. But by exploring further reasons for this failure, New Hope Group's limited industry experiences and unsystematic decision-making mechanism originated from its agricultural economic mind are the most essential ones. During its dairy industry development strategy, New Hope Group excessively relied on M&A and imagined to gain market success by its capital while ignoring the investment risk of dairy market, which are fatal to that M&A strategy and its other investment failures.The innovation of this thesis is: This thesis analyzes the attributes of the dairyindustry when New Hope Group invested in dairy industry and compares New Hope Group with other successful dairy companies in order to prove that integration management is definitely necessary, and, M&A is only a secondary method. The key point that determines the success or failure of a company is to improve the ability of management.