Study On Diversification Strategy Of Liuhua Group

Application of chemical fertilizer is one of the important means to increase yield of crops per unit area. China has the largest populations in the world, and grain production plays an important role in agriculture. People are the base of a nation, and food is what matters to the people.Agriculture is the foundation of the national economy and grain based on this foundation. At present, our country is one of the biggest fertilizer producer and user. However, problems like unreasonable industrial structure, the relative surplus production capacity, unbalanced supply and demand structure etc still exists in chemical industry in China. Oxidation of gansu group co., LTD (hereinafter referred to as oxidation group) has constantly grown since its inception, and has become a national Top-100fertilizer enterprise. But as a result of excess capacity, raw material prices rising, intense competition between enterprises in chemical fertilizer industry in recent years, the oxidation group is faced with enormous pressure to survive, in order to survive and gain a competitive advantage, companies should start from a strategic point of view, settle problems like how to make synergistic effect on the basis of product diversification, increase the market share, reduce the management risk.This paper starts from the internal and external environment of oxidation group, has made detailed research on the oxidation group macroscopical environment, industry situation and market competition situation via using PEST analysis, porter five-force model analysis, and the external environment evaluation matrix (EFE), summed up the opportunities and threats the oxidation group facing; find out the advantages and disadvantages in the internal oxidation group management via using core competitive ability analysis and internal environment evaluation matrix (IFE). Then use the SWOT analysis tool to formulate and chose the diversified competition strategy. Eventually, this article discusses the implementation of the diversified strategy and some concrete measures of the oxidation group.Through the study of this article, the oxidation group obtained diversified development strategy based on the combination of theory and practice. This strategy and the process making this strategy are worthy for reference for both the oxidation group company and other enterprises of the same type.