Enterprise Approach- How to enter the new business-.docVIP

 PAGE \* MERGEFORMAT 12 Enterprise Approach: How to enter the new business? Expansion worries In fact, this contradiction is not just this one company, but business is located in common: not only faced with the forced transformation of the profit decline, or in the development of the industry’s peak period of cross-cross the impulse is always accompanied by expansion of business life. Understandably, the enterprise’s purpose is profit-driven. Although we have repeatedly emphasized that strengthen their core capabilities, stick to this industry, but the new business is always highly attractive business, this impulse to continue to strengthen its main business on the one hand from the defensive strategies, such as along the vertical expansion of the industrial chain; More from the lure of new business profits and shareholder or stakeholder pressure, such as the good kid in the stroller while manufacturing has reached a global scale ‘hidden champions’, but Song Zheng still have to select ‘adventure’ advance retail trade, as it can be for a future listing of ‘finding a’ better ‘price-earnings ratio’. But this expansion of new business risks and opportunities are often peers, and even the risks outweigh the opportunities. According to Michael Collins of the 1989 to 2004, more than 60 U.S. retail companies related to diversification and expansion of 300 cases of conduct investigations, surveys found that only 29% of new business received a ‘profitable growth’, if expansion of indicators of success should be strictly limited to taking ‘accumulation of bets’ (ie not only meet the net present value is positive, while achieving revenue and profit growth of more than 5%) of the indicators to measure, then this ratio will decline further to 15% (‘ accumulation of bet ‘than’ profitable growth ‘means that new business growth and profitability more space, but also a more solid statistical data). The data illustrates the risk of large expansion. Select the new busin