Research On The Performance Of Gree’s Related Diversification Strategy

Diversification strategy is an important part of enterprise strategy.With the development of social economy,market demand and enterprise operation structure are changing constantly.In order to become bigger and stronger,enterprises will choose to enter other fields,occupy more markets and explore new markets.The diversification strategy types suitable for different types of enterprises in different periods are also different.Some enterprises that choose diversification transformation have achieved success,such as Qingdao haier;Some transformation failure,become a mirror,such as chunlan group.Therefore,for the enterprise,it is necessary to evaluate the situation and choose the diversification strategy suitable for the development needs of the enterprise according to its specific situation.For scholars,the research on diversification strategy also needs to keep pace with The Times,and it is of practical significance to study and solve the problems in practice.In this paper,a case study is conducted on the representative gree electric appliances which has gone from specialization to diversification in recent years.Gree electric appliances has always adhere to the road of specialization,in a changing market and professional development bottleneck,also began to seek to enter other areas,and in 2013 formally put forward the suitable for their own related diversification development path,gree electric appliances related diversification strategy for the current attempts through diversified transformation of enterprise has a certain reference value.Starting from the internal and external operating environment of gree electric appliances,this paper analyzes the internal and external motivations for gree electric appliances to implement relevant diversification strategies with the help of porter’s five forces model and PEST model.Then based on the industrial layout and resources related to the analysis of the two aspects,to make a qualitative evaluation of gree related diversification,and with the aid of Hector fender index,measure the gree electric appliances all business related diversification,it is concluded that in 2018,gree electric appliances related diversification reached the highest since 2010,and the trend will continue to be maintained;Finally,the effect ofgree electric appliances’ diversification strategy is evaluated from two aspects:financial performance and market performance.Through the research,it is found that the related diversification strategy of gree electric appliances has a significant positive impact on enterprise performance,but there are still problems such as insufficient diversification development,high risk of new business but weak competitiveness,more form than substance of smart home strategy and excessive reliance on managers’ personal marketing.In view of the above problems,this paper puts forward five Suggestions: strengthen the core business,maintain a rich cash flow;Moderately strengthen related diversification strategy,rational treatment of non-related diversification business;Continue to innovate and strengthen differentiation strategy;Seek cooperation through mergers and acquisitions to reduce the risk of new business;According to the company’s strategic layout,strengthen the relevant personnel training.It is hoped that the above Suggestions can provide reference for the diversified development strategy of gree electric appliances and other enterprises in the same industry.