Research On Strategic Transformation And Its Performance Of X Co.,Ltd

At the end of 2012,Politburo of China's Communist Party put forward eight provisions about improving the work style,closing ties with the masses.After that the government introduced a series of files requiring strict economy and combat waste.At the same time,in response to the call of the government,the Ministry of Commerce of China and Food Industry Association announced the industry convention,"hard to practice strict economy,combat extravagance and waste",aimed to promote food industry to develop in the direction of popularization.High-end catering industry as the main place of consumption of official reception and business reception,had suffered a "cold winter" under the influence of those policies,a substantial decline in performance.The whole industry is facing transformation.X Co.,Ltd is regarded as " the first stock of private catering enterprises ",also the archetype of high-end catering enterprises.It had developed rapidly since been listed in the stock market in 2009.But along with the Eight Provisions and relevant policies releasing one after another,X Co.,Ltd encountered "Waterloo".Its official reception both with business reception declined sharply.Main source of income,high-end restaurant business performance atrophied and endured severe financial loss.To actively respond to national policy,meanwhile reverse loss,X Co.,Ltd started frequent strategic transformation since 2013.In the food formats,middle and high end catering transferred to popular.In addition,X Co.,Ltd began cross-border transferring to environmental protection,culture,new media and big data,which all have nothing in common with food industry.X Co.,Ltd spent a lot of manpower,material resources,financial resources to build three new industries,including environmental protection,culture and big data.Among the three industries,only the first business created income,the other two new businesses had never contributed for the company.Finally,they were all been stripped.In the catering industry,the original restaurants,fast food,food processing business were stripped due to loss,only group meal business remaining.In order to study the performance of strategic transformation of X Co.,Ltd,this paper constructed a performance evaluation system of strategic transformation suitable for catering enterprises.The evaluation system contains not only main financial indicators,but also contains non-financial indicators.Therefore itcan evaluate financial performance and non-financial performance,and can comprehensively reflect the performance of strategic transformation of X Co.,Ltd.Using the evaluation system,this paper achieves longitudinal comparison analysis and horizontal comparison analysis.The study shows that X Co.,Ltd's financial performance,profitability,cash flow,debt paying ability,operation ability,growth ability,all appear to drop significantly.Non-financial performance,strategic objectives not achieve,product and service quality is stable,the research and development ability drop,future long-term development is uncertainty.Compared with the same industry,X Co.,Ltd's multiple indicators are the worst,level poor(E).In general,X Co.,Ltd's three-year transformation ended in failure.There are three reasons bringing out the failure.First,in the process of X Co.,Ltd's strategic transformation,a large number of senior managers quit,the new talent is not timely introduction and maintenance.Second,the Thrift order makes the food industry market downturn.Third,its resource and capacity doesn't meet the irrelevant industries' requirements.Then the suggestions to X Co.,Ltd and other catering enterprises are: maintaining team stability;transformation should be gradual;avoiding blind cross-border transformation,diversified transformation should start with entering the related field.The innovation of this paper lies in: First,drawing lessons from domestic and international financial performance evaluation system,introducing non-financial indicators,this paper constructs a performance evaluation system for strategic transformation of catering enterprises in the perspective of financial and non financial.Second,using the method of case study to explain the reason,path and effect of enterprise strategy transformation,and presenting the whole process of enterprise strategy transformation.Third,the academic research on catering enterprises is relatively scarce,especially in the background of the Eight Provisions and relevant policies,then the study and suggestions about food industry has advantages of strong timeliness.Finally,previous studies considered that the industry in a recession is the best period of transferring into new areas,this study finds that cross-border restructuring into non related industries has a negative impact on organizational performance,for the high-end catering enterprises,related diversification is more suitable.