Research On Diversification Business Development Strategy Of Sinosteel Shijiazhuang Design Institute

Business diversification is a development trend in each design institute in recent years. It’s not only the development needs but also the survival needs for enterprises. After more than forty years development, having been keeping the basis of traditional advantage in metallurgy and mine, Sinosteel Shijiazhuang Design Institute has also dabbled in building, tower masts and engineering general contracting in recent years. However, the diversification depth is not enough. In addition, the bad steel situation in China for the past few years brought a big shock on metallurgy and mine field in design institute. In this case, to locate the business diversification from a strategic level becomes a current issue and it’s also the need for design institute to realize a sustainable development.The thesis firstly introduced the business portfolio strategy and the connotation, types and motivation of diversification strategy. On this basis, the necessity and feasibility of the implementation on business diversification development strategy in Sinosteel Shijiazhuang Design Institute are analyzed.In the aspect of the necessity, combined with the development history and present situation of the Design Institute, we analyzed the macro environment, micro environment and character environment of Design Institute by using PEST analysis, product life cycle theory and five force models and the motivation of diversified development has reached a conclusion: impact from related industries on part of the business, intense market competition, small enterprise scale, decentralized operational risks and sustainable development needs.In the aspect of the feasibility, the Design Institute of its own advantages and disadvantages, opportunities and threats are described and analyzed in detail using the SWOT matrix analysis method. Through a comprehensive evaluation of the internal and external factors, the necessity had been concluded of diversification strategy for Design Institute. At the same time, the author also presents some design institute experience of diversified development.Finally, it comes to a conclusion that Sinosteel Shijiazhuang Design Institute should choose business portfolio strategy and should take a related diversification development road which relates to horizontal diversification, vertical diversification and concentric diversification. At the same time, design business and engineering general contracting business strategy are described separately. In the last chapter of the paper the author points out seven measures to ensure the business diversification development strategy, the seven aspects respectively are to transform management idea, to strengthen technological innovation, to do a good job in personnel management, to strengthen the market development, to pay attention to risk prevention and control and to expand the foreign publicity.