Motivation And Performance Analysis Of Diversification Strategy For SME Board

There are many empirical and academic studies on the relationship between diversification strategy and financial performance by domestic and foreign scholars,but up to now there is no unified conclusion which shows that diversification strategy definitely bring positive value to the development of enterprise.But in real society,when enterprises develop to a certain stage,they will consider whether to implement the strategy of diversification.Therefore,it is of great practical significance for us to study the impact of diversification strategy on multi-operation performance and its motivation,and the risk of diversification strategy.One of the most important enterprises in China is the small and medium-sized enterprises,which play an important role in the economic development of our country.How SMEs can develop smoothly and rapidly is the focus of attention of managers of SMEs in China.This paper chooses the financial data of SME listed companies in the three years from2015 to 2017 as a sample,and divides the sample data into three indicators: financial performance,growth performance and operational capacity to conduct trend analysis.Through descriptive statistical analysis of the sample,the paper tries to find out the relationship between diversification and the three financial data.This paper focuses on the SME board listed companies diversification strategy motivation,and SME diversification strategy implementation risk.We should examine the diversified development strategy from a comprehensive perspective.This paper discusses the motivation,risk and performance impact of diversification strategy.Finally,this paper carefully selected Shanhe Intelligent Equipment Co.,Ltd.as a case study of diversified mergers and acquisitions,through the event analysis,financial performance analysis,economic value added and other financial indicators,concluded that diversification of enterprise financial performance and growth in some dimensions are positively related.Combined with its own characteristics,the financial performance of diversified operation is also positive.Therefore,small and medium-sized enterprises should fully consider their own internal and external conditions in choosing diversification,pay attention to the cultivation of core competitiveness,long-term layout before implementing diversification strategy,combined with the advantages of their own research and development,management to implement diversification strategy,but not blindly follow the trend.The author holds that in order to achieve long-term and stable sustainable development,small and medium-sized enterprises must first achieve professional management,gain a place in their own professional fields,and have certain advantages in the industry: a certain amount of capital reserves,occupy a certain market,have their own core technology,and then to explore other areas of territory.Implementing diversified management strategies.And diversification must also have its own core business,not blindly diversified,combined with the advantages accumulated by the enterprise itself,such as management advantages,research and development,technology,new industry accumulation,select high-quality,state support and encouragement of high-quality industries to implement diversified mergers and acquisitions,to achieve rapid development.