Coscon Land-based Industrial Diversification Strategy To Reposition

Corporates diversify into several lines of business in order to avoid risks and seek for growth.But the changing of many factors such as enviroments,business structure,competitor抯 power,and the internal reasons will affect the lines of business.ln order to help the enterprise obtain competitive advantages and move more corporate resources into the most attractive LOB抯, a key part of the diversification strategy is making decisions on what should be our portfolio of lines of business.This thesis introduce the history and present condition of the diversification strategy of COSCO SHANGHAI ON-LAND INDUSTRY COMPANY ,point out the defect of its strategy.The Thesis also analyse the industry attractiveness and competitive strength of the portfolio of LOBs.Then by using the GE Business Screen and the theory of related diversification strategy, I finished the study of portfolio restructuring of the diversification strategy of COSCO SHANGHAI ON-LAND INDUSTRY COMPANY.According to the analysis of the history and present condition of the company攕 diversification strategy,we can learn that the portfolio of LOB抯 cannot properly help the company to creat sustainable competitive advantages and the company抯 resources were not moved into the most attractive LOB抯.According to the industry attractiveness analysis,we can learn that the marine engineering business and hotel are the lest attractive industries ;the Marine Communication &4Navigation,Labor service and shipping supply business are the most attractive;and the international trade,shipping and real estate business are middle-level.According to the competitive strength analysis,we can learn that the marine engineering business and hotel are the lest competitive industry; the Marine Communication & Navigation,Labor service and shipping supply business are the most competitive industries;and the international trade,shipping and real estate business are middle-level.According to the integrate analysis (by GE Business Screen and the theory of related diversification strategy),we creat the principle of the resources distribution and portfolio restructuring of the LOB抯.According to the result of the above analysis :for the resources distribution,we should move the company抯 resources firstly into the Marine Communication & Navigation,Labor service and shipping supply business,and then into the international trade,shipping and real estate busiriess.we should make no more investment on marine engineering and hotel business.According to the theory of the related diversification strategy,we learn that the related diversification strategy offer competitive advantage potential of lower costs via sharing common resources & combining related activities,efficient transfer of key skill or core competencies,technological expertise or managerial know-how and common use of same brand name.The related LOB抯 are the Marine Communication & Navigation,Labor service and shipping supply business,so we should develop these LOB抯 firstly. The unrelated LOB抯 are international trade,real estate and hotel business.The company shouid focus on the related LOB抯.At the end of the thesis,the writer restructure the portfolio of the company抯 LOB抯,so as to improve the LOB抯 industry attractiveness and integrated competitive strength:The company should focus on the economic development and serve the shipping enterprises;firstly develop the business of shipping supply ,the Marine Communication & Navigation,Labor service ;maintain the business of shipping,real estate and trade;close out the business of marine engineering and hotel.The company should try to carry out the related diversification strategy.Shi Xuejun(MBA)Directed by Professor Song Bingliang...