A Study On Problems And Solutions Of Business Diversification For Southernpec Group

Energy is the strategic material for whichever country. Energy industry, due to its involving to the national strategic security, has always been the most strictly supervised and managed industry for every country. In China, most companies in energy industry are state-owned, and the private energy companies can only struggle to survive in the cracks of the regulation and control policies. How to develop private energy companies is a major problem placed in front of all China’s private enterprises.This paper is to explore the development of private energy companies with the diversified development theory from Southernpec Group’s ten-year development.This paper will analyse the present situation of petrochemical industry. Firstly, this paper will introduce Southernpec Group’s background and its process of developing the diversification strategy, and conclude that the biggest problem in the process of the implementation of diversification strategy is diversification target selection error.On the basis of that, we will analyse the reasons for that error from value chain, and find out the Southernpec Group’s core competitiveness; and according to the core competitiveness to rebuild the Southernpec’s value chain, thus adjusting its business diversification objectives. Based on above mentioned points, this paper will use case study method to give solutions to the target selection error of Southernpec’s diversification strategy : Reconstruct the value chain, and enforce the passive and active policy.This study plays a certain function for using value chain analysis method to guide the enterprise to select targets of diversification strategy in a complex policy and market environment, proposes means to solve Southernpec Group’s currently existing predicament in diversification strategy, and provides thought for the group’s future target selection on diversification strategy.