Study On The Failure Of Diversified Management Of GuirenBird

In the face of complex and changeable external environment and increasingly fierce market competition,low-level and simple business model has been unable to meet the needs of long-term survival and development of enterprises,and accompanied by greater uncertainty and potential risks.In order to reduce enterprise risk and realize sustainable development,more and more enterprises begin to diversify their development.However,some enterprises are too optimistic and blind in the implementation of diversification strategy,and even develop new businesses too early before the main business has achieved stable profits.In addition,diversification strategy often occupies more enterprise resources,and enterprise managers are not familiar with the new industry.As a result,diversification is not only difficult to play the expected role of risk diversification.On the contrary,it will drag down the main business of the enterprise and cause the enterprise performance to decline,even the loss.Therefore,it is of great significance to explore how to optimize the diversified management behavior of enterprises for their long-term survival and development.In the capital market,the above diversification into financial trouble cases are not uncommon,the Guirenbird company is one of them.Guirenbird has been working in the sports goods industry for 27 years.In 2014,Guirenbird successfully listed on the Shanghai Stock Exchange and became the "first share of sports goods",which further consolidated Guirenbird’s position in the sports goods industry and made the company’s business performance grow steadily and the stock value increase continuously.The market value was once close to 40 billion.However,in the three-year period from 2015 to 2017,in order to further expand its scale and strengthen its competitive advantage,Guirenbird began to try to diversify its business by involving in sports brokerage,insurance,mobile Internet and other industries.However,due to blind debt and excessive investment,Guiren Bird pushed itself into an endless abyss.As of December 2020,the company’s profit of the year is-450 million yuan,liabilities up to 3.537 billion yuan,asset-liability ratio of 99.3%,which has constituted debt default and risk of delisting.In that year,Guirenbird was ST,although after a series of debt restructuring in 2022,but the business performance has been unable to be compared with the initial stage of listing.From the research perspective of the diversified management of noble birds,this thesis firstly uses the literature research method to sort out and summarize the relevant literature on the motivation,disadvantages,effects and paths of diversification,and explains the relevant theoretical concepts in detail.Then,using the case study method,it analyzes the characteristics of the diversified expansion of Guirenbird Company,the results of diversified operation in different periods and the financial performance of Guirenbird Company,and analyzes the financial problems existing in different stages of its diversified operation by means of data comparison.And using the theory of strategic management,principal-agent theory,resource-based theory,market power theory to analyze the reasons for the failure of the bird diversification.By exploring the timing of the implementation of the diversification strategy and the influence of the degree of diversification on the business performance of the company,it is found that the immature and excessive diversification of the diversified investment of the company eventually led to the decline of the business performance year by year and even a huge loss.The stock price also fell all the way since the listing,and there was even the risk of delisting.Finally,this thesis proposes that enterprises should avoid blindly diversifying investment,and it is the right way to carry out diversified operation centering on the main business.Before diversification,it is necessary to fully understand the profit model,competition degree and exit mechanism of the new industry,and to carry out proper diversification according to the characteristics of enterprises is conducive to the development of enterprises.The contribution of this thesis is mainly reflected in the following aspects: most of the previous studies on diversification focused on large sample empirical studies and successful cases of diversification.Taking Guirenbird Company as a case,this thesis analyzed the reasons for the failure of enterprise diversification,thus enriching relevant studies on enterprise diversification.By analyzing the typical case of diversified management failure,it will help to summarize the failure lesson of diversified management,and provide reference for sports footwear industry,and provide some valuable suggestions for the development of sports footwear industry.