Study On The Development Strategy Of Changshu Guo Fa Venture Capital Co. Ltd

After a period of fast development following the economic reform and opening up in the end of 1990s, China encountered an important turning point in the history. Innovation became the new foothold of China’s economy, which brought an upsurge of high-tech companies. Early-stage high-tech companies have suffered from financing limitations for a long time, and they need a new system to provide financing support. Apart from providing policy support, the Chinese government set up state-owned venture capital firms to help reduce financing limitations for early-state high-tech companies. However, conflicts exist between the management style of state-owned companies and venture capital investment, which results in various limitations on the development of state-owned venture capital firms. As a venture capital firm wholly owned by the local government, Changshu Guo Fa Venture Capital Co. Ltd inevitably faces the same problem.From the perspective of strategic management, this paper first conducts PEST analysis to study the development environment of Changshu Guo Fa Venture Capital firm, and then uses the SWOT model to analyze the outer environment and inner situations of Changshu Guo Fa Venture Capital firm. Based on the PEST analysis and SWOT model, the paper conducts a strategic positioning for the future development of the firm using the Five Factor Diamond Model, and puts forward five development strategies, including united financing, concentrated investment targeting, diversified investment methods, cost-saving management and competitive brand building, to reach the strategic targets. This paper may provide some reference for the study on the development strategy of state-owned venture capital firms.