Xinpu Construction Group Diversification Industry Selection Research

In 2014,the Central Economic Working Conference mentioned that the economic development in China had entered the “new normal" phase.Since 2015,the economic growth rate showed an obvious downward trend in China,and the growth of the building construction industry showed an inflection point;to be specific: decreased number of construction projects,difficulty of undertaking engineering project and tight capital chains.Some enterprises countered declined competitive edge;under the pressure of seeking survival or development,many domestic enterprises chose to go diversified development ways and adopt diversified development strategy.However,many enterprises,especially small and medium enterprises,due to laggard management methods,failed to achieve the expected advantages from the diversified development industries;many enterprises fell into a dilemma on the way of diversified development;the reason for their failure was not the problem of diversification strategic orientation,but the problems in their selected target industries.Therefore,it is of great value to study the selection of diversified target industries.At present,many scholars have made beneficial exploration to research on enterprises' selection of diversification industries,and their research mainly focused on strategic coordination,industry attractiveness and relevance,industry cost,enterprises' core competence and enterprise remaining resources and the industry selection;some other scholars have proposed many specific methods for selection of diversification industries,but many research methods are not systematic,the research results have no specific practical operability;to be specific to the building construction industry level,although people often mention "appropriate orientation of the industries",such issues are still not solved,such as: how to select the diversification industries? What is the standard for industry selection? What kind of way should be adopted for industry selection? Now,most literatures related to selection of industries can only be seen in newspapers,magazines and summary reports,but almost no academic paper had systematically discussed the selection of diversification industries.This paper regarded the construction enterprise-Xinpu Construction Group as a sample,based on strategic synergy,industry attractiveness,industry pertinence and enterprise capability theory,regarded the ability of carrying out diversification as the starting point,to analyze the influence factors that affected the diversification selection of Xinpu Construction Group,and determined 21 key factors that affected diversification selection;through the weights and scores determined by experts,this paper established QSPM matrix and carried out qualitative and quantitative analysis on the methods for Xinpu Construction Group to enter the diversified industries and achieved the following conclusions:(1)Xinpu Construction Group currently has such core competence,value creation ability and strategic alliance ability that only support relative diversified industries;through qualitative analysis,we selected two optional industries: entering the vertical integration industry-commodity concrete industry and the horizontal integration industry-construction equipment leasing industry;through the QSPM matrix analysis based on SWOT analysis,this paper found that the score of commercial concrete industry was higher than that of construction equipment leasing industry;if the enterprise could only select one diversification industry,the commodity concrete industry could be the best choice for the enterprise.(2)In the selection of diversified target industries,the main factors affecting the strategic coordination of optional industry was the operation management coordination,technology and R&D coordination,product or service coordination and business mode coordination;only when these factors have all been satisfied,can the enterprise achieve the effect of "2+2=5" when it enters the new industry.(3)Among the factors influencing industry attractiveness,the technical monopoly of the industry,industrial innovation,industrial average return on investment and the high growth opportunity of the industry are the key to influence the success of enterprise diversification.