Shenzhen Sanjiu property management co., ltd

Diversified management of Sanjiu Group

Enterprise diversification is not only an important means of asset reorganization, but also an important way to reduce the risk of a single business, avoid business shrinkage and gain the overall scale advantage. And its success will largely depend on whether the enterprise can grasp the changes in the environment, correctly select related businesses and effectively combine resources. As a well-known enterprise group among the top 100 enterprises in China, Sanjiu Group has more than 200 wholly-owned, holding and shareholding enterprises, involving pharmaceutical industry, food processing industry, wine industry, modern agriculture, tourism service industry, packaging and printing industry, real estate development industry and automobile industry. There are many experiences and lessons in its diversified management process that are worth learning.

19911February, the logistics department of the General Political Department gathered 35 enterprises in Shenzhen Special Economic Zone to form the "Sanjiu Enterprise Group" with Southern Pharmaceutical Factory as the core enterprise. Business scope involves medicine, real estate, import and export trade, automobile, electronics, clothing, trust and investment, stock and securities and other industries. It also stipulates that the development direction of Sanjiu Group is to become a multi-industry, multi-functional and export-oriented enterprise group. Diversification during this period is essentially the result of administrative orders, and Sanjiu Group has no right to choose independently. In the words of President Zhao Xinxian, "our diversity is forced, not voluntary".

The independence and diversification of Sanjiu Group can be divided into three stages:

The first stage: diversified exploration (-1994)

From 65438 to 0989, the scientific and technological content of Chinese medicine products and the cost of investing and setting up factories were not high at that time, and the entry threshold of Chinese medicine industry was very low. At that time, in order to avoid risks, the Southern Pharmaceutical Factory decided to develop diversified operations, focus on one industry, and make preparations for bright east and bright west, so it decided to go out of the scope of drugs and implement diversified operations. Managers believe that diversification can not only effectively disperse business risks, but also maximize intangible core competitiveness such as Sanjiu brand, management mechanism and sales through output. At the same time, enterprises can get the latest development information at the fastest speed by getting involved in various industries, and the group can find and intervene in new economic growth points in the shortest time.

Enter the packaging and printing industry. This vertical diversification not only stabilizes the supply channels of drug packaging, but also ensures the stability of quality. At the same time, due to the lack of high-grade printing plants in Shenzhen, the establishment of printing plants can also meet the needs of customers in surrounding areas for high-quality printing. Based on the above considerations, Southern Pharmaceutical Factory invested 5 million yuan, and Hong Kong Yuexiu Company invested 654.38 million US dollars to set up nine planetary printing plants. By the end of 1996, its social orders had accounted for 67% of its total products, with a profit of 20 million yuan.

Enter the western medicine industry. From 1980 to 1994, the output of western medicine increased at an average annual rate of 16%, and the output of traditional Chinese medicine increased at an average annual rate of 10%. The total output value of western medicine accounted for 79% of the total output value of pharmaceutical industry. With the huge market capacity and development speed of western medicine, Sanjiu Group invested in Shenzhen Jiuxin Pharmaceutical Co., Ltd. .. 1997, and the company's sales reached 230 million yuan, with profits and taxes paid to 37.8 million yuan.

Enter the real estate and automobile trade markets. After Deng Xiaoping's lecture tour in South China, real estate development and automobile trade became prosperous. Southern Pharmaceutical Factory changed its logistics department to real estate department, and then registered Sanjiu Property Company, Sanjiu Real Estate Development Company and three automobile companies mainly engaged in automobile trade.

Enter the hotel industry. Within two years, Sanjiu Group has established 65,438+08 hotel chains in various places, operating under the same brand and business model.

The second stage: diversified and rapid development (1994- 1997)

1994 "Sanjiu Weitai" was listed as a self-funded drug by the state, and the survival of pharmaceutical companies was in crisis. It also directly threatens the survival of the group, because 90% of the profits of Sanjiu Group come from the Southern Pharmaceutical Factory. Sanjiu Group has formulated a new group development strategy, developing a simple industrial enterprise into a comprehensive industry with multiple industries at the same time, developing a core enterprise into two core enterprises, and developing a simple industrial enterprise into a high-level joint enterprise combining industry and finance. Take Southern Pharmaceutical Factory and Sanjiu Automobile Industry as core enterprises, and 3-5 enterprises with profits exceeding 654.38 billion yuan as pillar enterprises, and develop 5-8 key enterprises with profits exceeding 50 million yuan. During this period, the use of capital operation means entered the automobile, agriculture, food and tourism. By June 1997, * * had merged 4 1 enterprises, and the total assets of the group reached 9.7 billion yuan.

In this period of rapid development, some problems in diversification are also exposed:

1. Due to the national economic depression, the number of tourists in the hotel industry has dropped sharply, and the rent cost is too high. The management level can't keep up with the expansion of the hotel, so it can only operate without money, making no profit or losing money.

2.65438-0995, the country implemented a moderately tight monetary policy, and the macroeconomic development slowed down, which directly led to the difficulties of the Sanjiu real estate project. At the same time, the automobile market began to cool down, the price gradually declined, and the business of Sanjiu Automobile Company also turned into a low tide. Zhao Xinxian believes that the main reasons for the status quo of "March 9" real estate are not only the uncertainty of national economic development, but also the arbitrariness of project investment and legal disputes.

3. Due to the rapid expansion of agricultural companies and incomplete merger procedures and procedures, some enterprises finally quit Sanjiu Group due to the lack of actual control ability over the merged enterprises.

4. Local governments and enterprises jointly resort to deceit to conceal the high debts of enterprises in order to achieve the purpose of being merged.

The third stage: diversification adjustment (1998-)

Faced with the problems in the development of diversification, it was suggested that diversification forced the limited funds of the group without fixed sources to be used dispersedly, which reduced the efficiency of the use of funds; Sanjiu Group gives people the image of pharmaceutical industry, which may not fully play its role in other fields, and even has the risk of brand dilution; At the same time, the group leaders are not familiar with the non-pharmaceutical industry, which increases the uncertainty of operation; In addition, the average consumption of drugs in China is more than ten times that in developed countries, which shows that the pharmaceutical industry itself still has great development potential. It is better to concentrate on your main business than to make great efforts to explore in unfamiliar fields. Finally, Sanjiu Group timely adjusted its strategic thinking, shifted from asset expansion to benefit expansion, readjusted its diversification direction and focused on related diversification. The focus of the Group's work has been adjusted to vigorously develop its main business, and mergers and acquisitions of non-pharmaceutical enterprises have stopped in principle. The Group cancelled Sanjiu Tourism Company, Sanjiu Agricultural Company and Sanjiu Automobile Company successively. Its industrial development strategy has also been adjusted to a life and health industry with medicine as the core, including health care products, big food, medical equipment, culture and other industries. Since then, Sanjiu Group has embarked on the track of benign development.

In the process of diversification of Sanjiu Group, there are many lessons of success and failure worthy of consideration by other enterprises:

1. In the process of business strategy selection, we should have the idea of "doing it first, then making it bigger". Otherwise, blindly diversified expansion, while capital, technology and management can't keep up, new business will become the burden of enterprises, and even produce a domino chain reaction, which is very important for the survival of enterprises.

2. Enterprises have two growth modes: scale growth and diversified growth. But there are four conditions for diversification: capital, talents, technology and management. Generally speaking, for small and medium-sized enterprises with average strength, don't blindly diversify unless the existing product market is saturated, the demand is declining, or the competitors are too strong to maintain sales.

3. Before starting a new business, we must analyze the internal and external environment of the new business, pay special attention to the analysis of the country's industrial policy, macroeconomic environment, competitive situation and future business prospects, and make careful decisions. In this case, it is precisely because of the blind expansion of the hotel industry and tourism industry from 1992 to 1994 that the hotel industry made ends meet when the national economy declined.

4. Diversification, especially entering a strange field, should consider whether the existing resources match the new business and whether you have accumulated funds, talents and management. We should not only consider the advantages of diversification in synergy, risk sharing, scale advantage and idle resource utilization, but also fully predict the operating risks and opportunity costs brought by enterprise resource dispersion.

5. When choosing diversification, we should first consider relevant diversification, which is conducive to the transfer of the core competence of the original business and make full use of synergy, so there is a great chance of success. Sanjiu Group has achieved success in life and health industry and printing industry, but failed in real estate, automobile and other fields.

6. In the process of integrating new business, we should make full use of the core competence of existing business. Sanjiu Group's long-term brand advantage, sales advantage and management mechanism advantage in the Chinese medicine industry are the basis for integrating new business.

7. If existing enterprises are merged and diversified, don't just see that the merged enterprise is a "pie", but fall into various artificial "traps".

8. From the diversification practice of Chinese enterprises, the effect of diversification is not ideal. According to the statistics of 1996, more than 85% listed companies are diversified. Among the top 100 companies in net asset income, 97 companies' profits are mainly based on their main business. The profits of companies with a return on net assets higher than 30% are mainly based on their main business, and13 out of 26 non-main business companies have a return rate higher than 20%. All these show that diversification can improve the deficiency of main business and increase profitability to a certain extent, but it has little contribution to the profit of the whole company.

At present, many st and pt listed companies are actively restructuring their assets and taking the road of diversification. But diversification is not a panacea to solve all enterprise problems, otherwise it will fall into a greater quagmire and cannot extricate itself. Only on the basis of grasping environmental changes, fully integrating existing resources and implementing diversification on the premise of improving the core competitiveness of enterprises can enterprises succeed.