A Case Study On The Failure Of The Business Diversification Of Le-TV

In recent years,with the continuous updating of Internet technology and the increasing usage of smart phones,the scale of Chinese netizen and the number of Internet video users have risen sharply.This situation not only has a deep impact on all aspects of human life,but also has a strong impact on Internet enterprises.While expanding the development space of enterprises,it also intensifies the competition among enterprises.Therefore,in order to enhance the profits of enterprises rapidly and maintain the competitive advantage while constantly seeking strategic transformation and business upgrading,Internet enterprises will choose to carry out diversified strategic management.Generally speaking,the successful diversification can make the enterprise obtain the synergistic effect of operation and finance,improve the efficiency of enterprise operation and create new core competitiveness at the same time.However,the failure of diversification will not lead to synergy among business units,but can cause vicious internal competition and disperse resources,even business failure.Le-TV once has unlimited scenery as the first successful listed company of online video,but its failed in the end.The failure of Le Video Network's operation has strong timeliness and practical significance.Therefore,this paper takes the process of Le Video's diversified operation failure as an example to discuss the reasons for the failure of diversification of private listed enterprise.Firstly,on the basis of explaining the relevant literature research on the motivation of diversification and the reasons for failure of diversification,the paper describes the development process and the related diversification characteristics of Le-TV.The diversification expansion of Le-TV centers on the new ecological system of "content + terminal + platform + service," making full use of the external advantages of Le-TV to achieve the purpose of decentralizing business risks and realizing user traffic.This is not only the motivation of Le-TV network diversification,but also the cause of failure of Le-TV diversification in the later stage.Secondly,the key part of this paper is to explore the reasons for the failure of Le-TV.The rapid development of diversification and its departure from its main business led to the greater difficulty of operation and the worsen financial situation until its failure.In order to deeply analyze the reasons of the financial crisis,this paper combines the ultimate performance of the diversified operation of Le-TV,and then finds out the diversified development problems of the Le-TV from the market performance,growth ability,profitability and debt paying ability,and then to find outthe reasons for the failure of the diversified operation.Finally,through the study of the reasons for the failure of diversification operation of Le-TV,it is found that the private listed companies should fully understand the advantages and disadvantages of themselves.To develop diversification operation through expanding the core business areas and competitiveness of the enterprises,so as to achieve the purpose of expansion and the growth of enterprises.