Financial Effects Of Corporate Diversification

Since the 1950 s,there are many domestic and foreign scholars have conducted research diversification theory and practice related.In 1957,The American strategic management expert Ansoff first proposed the concept of corporate diversification,then academics and practitioners on the study and practice of the diversified issues did not stop.Chinese scholars since the late 1990 s,Began to study the impact of diversification on firm performance,the conclusion is not exactly the same due to the impact of history,conditions and other factors.Chinese scholars on the special circumstances of the market,using the research methods differ from foreign companies and index,and therefore the conclusions and foreign scholars was not exactly the same.Although diversification started late in China,but now a large cross-interdisciplinary group of companies has been formed.As one of the earliest appliance company to achieve diversification,Youngor’s existing business covers such as textile apparel industry,real estate industry,equity investment and so on,Youngor had an high level of diversification but the company performance is affected by a certain.This paper is based on such a case,combined with the current situation of Chinese companies,I analyze the effect of diversification with Youngor and Youngor’s performance is helpful to our other similar appliances industry listed company.The thesis adopts case studies and normative combination of analysis.At the beginning of the thesis,first of all uses the methods of normative research of relevant documents and reports do in detail.Then use case analysis,combined with the diversified financial position of the business Youngor,from the principal-agent theory,portfolio theory,system and the basic theory,transaction cost theory and resource surplus theory in the following several aspects of discussed.In case analusis,this paper gave an analysis of Youngor’s financial data for 1999-2014.Subsequent opportunities according to diversification and elements of analysis of factors unrelated diversification mission of Youngor’s decline in performance and the increase in the performance of the company diversified factors,and carries on the summary,it is concluded that the relationship between the firm performance and diversification factors.Finally,according to the above analysis that the youngor overall corporate performance decline in the conclusion.Proposed in this paper can be used by other domestic listed companies to learn from the experience and inspiration.The thesis adopts Youngor diversification for analysis which is developed in five parts.The first part is introduction of this article which includes research background and significance.This paper is based on a great number of domestic and foreign literatures.Also,in the first part,there introduced the research mentality and research technique.The second part is introduced the concept and the theory of diversification.Introduced the concepts,the merit and demerit and the motivation of diversification.The third part is the introduction of the case which includes the basic information of Youngor and the development of Youngor’s diversification process,diversification type and trait.The forth part is the theory analysis of the impact on companies’ achievements by Youngor’s diversification operation.This part firstly analyzes the change of Youngor’s achievements during the period of its diversification operation,then analyzes the reasons for why non-related diversification operation has negative impact on companies’ achievements as well as the reasons for why related diversification operation has positive impact on companies’ achievements in combination with related theory of diversification operation.The fifth part is the experience and implication of Youngor’s diversification operation,mainly summarizing experience lessons in the course of Youngor’s diversification operation,also illustrating enlightenment to us brought by Youngor’s diversification Operation.