XX Company’ Strategy Based On Portfolio Investment And Real Option Theory

In recent years, China actively transforms economic development patterns and vigorously develops strategic emerging industries. As you can imagine, this phenomenon will bring prospective future, long-term significance and far-reaching impact on IT industry. Investors will pour into IT industry, so the huge pressure of competition is unable to avoid. Therefore, how to get competition force is a big challenge for each enterprise leaders, especially for small and medium-sized enterprise IT leaders.Unlike other industries, the IT industry has its unique advantage and disadvantage. Advantage is embodied in small investment scale, strong enterprise flexibility and its board market, etc. Disadvantage reflects in the quick technology replacement, short product life cycle, easy copy and intense market competition, etc. As a result, the IT enterprise’s development strategy should more carefully weigh the delicate relationship between part and all, immediate and long-term.This paper takes a developing IT company,named XX company, as an example, innovatively introduces portfolio investment theory, real options theory, analyzes XX company’s current resource strength, technical advantage and downstream industry’s development potential, combined with five core products(general foundation platform, intelligent recognition and analysis system, agile operation control platform and integrated emergency command platform, collaborative development platform), and explores XX company’s future strategic direction and concrete operation methods.The findings show that: in order to minimize the degree of dependence of specific downstream industries and disperse the industry policy risks, the XX company should further consolidate its market position in the fields of energy, scientific research, manufacturing, and government. And on that basis, the XX company can open up new future market objects like health, utilities and transportation industries, with low correlation degree with original market, less impact of macroeconomic policy, and in line with the future policies.In addition, from the perspective of real options, "secondary development" strategy development steps are proposed. It points out the company’s core product is the core competitiveness. In that case, all the industry solutions and technical support and professional services are attached to the core product. In order to obtain the flexibility value, the XX company should first start with consolidating its core products, and then follow future economic trends and select the “expensive option” if need. At the meantime, it can also do the technical preparations for the development of the company. In the case of considering the company’s advantage, the middleware support system, product development and collaboration platform, data applications integrated system, the Emergency Command cloud platform application system, are regarded as the company’s primary development products.The research in this paper not only apply to the development of the strategic plan of the XX company, but also applies to many other IT companies with similar strength and market environment with XX. The article also puts forward new ideas for a solution to the problems of enterprise development: the theory of the virtual economy can also solve some real economic problems.