Analysis Of The Motivation And Performance Of Enterprise Diversification

In the 1950 s,the concept of diversification emerged abroad.This business concept was first proposed by Ansoff and quickly became popular around the world.Many scholars have carried out a large number of empirical researches on the relationship between diversification and business performance,but so far,no clear conclusions.China's national conditions are special,and diversification started late.Despite the large number of cases of diversified business failures,the concept of diversification is still the guiding concept of the company's development.This paper selects Fengle Seeds as a case study of diversified operations.Fengle Seeds,as the first stock in China's seed industry,is a typical cross-industry and cross-disciplinary comprehensive company.From the analysis of the Fengle seed industry to diversification and the final "returning",the problems behind it are revealed,and the reference experience for the diversification strategy of domestic agricultural enterprises is provided.This paper adds non-financial indicators analysis in the performance evaluation analysis process,aiming to make up for the agricultural enterprise performance evaluation to pay attention to financial indicators,ignore the defects of non-financial indicators,and more comprehensively and accurately reflect the business performance.In the case analysis,the method of vertical comparison before and after diversification is used to evaluate the impact of diversification on business performance.This paper first analyzes the diversified background at home and abroad,reviews and summarizes the relevant literature,determines the research ideas and analysis methods of this paper,and roughly describes the basic framework of this paper.Secondly,starting from the basic concepts of diversification,summed up the related motivations of diversification and the advantages and disadvantages of diversification.Based on the three theoretical theories of market power theory,resource-based theory and asset portfolio theory.In the case analysis section,the basic situation,development history,and type of diversification of the case company are first introduced in detail.Secondly,based on the actual situation of the company,the motivation of the diversification of Fengle seed industry is analyzed.There are four main points: Decentralize business risks and balance seed business profits;Managers' pursuit of their own interests,tending to a business with short investment cycle and high compensation;Make full use of theremaining resources,continuously extend the seed industry,and improve the industrial structure;Strengthen the competitiveness of enterprises and consolidate the status of agricultural industrialized agricultural enterprises.Next,select the financial data of 1998-2016 Fengle Seed Industry for vertical comparative analysis and related non-financial indicators analysis,and summarize the reasons for the failure of Fengle Seed Industry Diversification: Managers focus on short-term interests of enterprises,over-optimistic forecasting of diversification prospects;Blind overload expansion,ignoring the development of core business;The synergy between the main business and the auxiliary industry is not obvious;Lack of a reasonable organizational structure.Finally,based on the case analysis,some inspirations are drawn: Correctly judge the development prospects of diversification and carefully choose the type of diversification;We should concentrate our strengths and cultivate core competitiveness;Reasonable control of diversified management is conducive to optimal allocation of enterprise resources;Optimize corporate diversity structure.The analysis found that Fengle Seeds failed to implement a diversified business strategy.Diversified business strategy is a strategic choice for enterprises to enter a stage of rapid development.It can rapidly expand the scale of corporate capital.However,if it is not timely adjusted to solve problems in the implementation process,blind pursuit of short-term high returns and neglect of long-term development goals of enterprises may lead to Excessive implementation of diversified operations by enterprises has led to the failure of diversified operations.The limitations of this article: First of all,this paper adopts the single case research method,and there are limitations in research methods,it's different from the empirical analysis of big data,the conclusion is universal.Secondly,the financial data disclosed by the case company has the possibility of fraud and incomplete disclosure,so the accuracy of the research indicators cannot be fully guaranteed.