Research On The Development Strategy Of Zhongchen Group

Nowadays, the private economy has become the most active part in the field of China's economic development. With the further reform and adjustment of stated-owned enterprises, the private economy acquires access to a broader space for development, ushering in a new development opportunity.Zhongchen Group is a private enterprise group with the assets of several hundred million Yuan, which operates business across regions and industries with some certain strength and scale. The businesses it is engaged in mainly include production and processing of magnet wire, R&D and manufacturing of motor, highway construction, mining and processing of stone, operation of non-performing assets as well as the high-tech business mainly involved in video system and monitoring system. These non-related businesses have diversified development trend. Given the low correlation is difficult to produce synergy; the whole group is lack of core competence. Therefore, it is indispensable to adjust the development strategy, to highlight the business with core competence or development potential while stripping the business with weak competence or little potential, in order to enhance the core competence of the entire group.This thesis employs the Competitive Strategy Theory, the Core Competence Theory, the Growth-Share matrix theory and the SWOT analysis, to present a detailed analysis of and research on the operations of Zhongchen Group. In view of the present situation of Zhongchen Group, including its unrelated diversification, family management and highly centralized organization design, the author puts forward his own opinions. In view of the expansion of the blind unrelated diversification, Zhongchen Group has carried on the strategic reorganization to its subsidiary companies, strengthening the core status in the entire group of Zhongchen Electromagnetic Wire Company which has the core competitive ability. Meanwhile, Zhongchen Group also aims to increase the investment in order to prompt the development of the entire group. But regarding the non-core business companies, such as Yongli Motor, Zhongchen Group takes measures, including trusteeship, sale and strategic transition, to carry on the corresponding strategic adjustment. Through employing the professional managers, the group changes the current aspect that the family members occupy the main management posts to cause the management level of Zhongchen Group on a new stage. At the same time, the new organizational structure design is designed to provide the highly centralized management pattern to the shift in the direction of decentralization, which effectively mobilizes the enthusiasm of the professional managers.The results of this study are of certain strategic significance to the future development of Zhongchen Group, meanwhile, providing certain references to the development of other similar private enterprises.