Study On Diversification Management Of Guirenniao Under The Framework Of Harvard Analysis

More and more enterprises and companies begin to pursue diversification as their management strategy in recent years.Some companies will choose diversification management if they want to cultivate new profit growth points in the prosperous period of the main business.But when the main business expectations are not good and optimistic,some companies also tend to seek development breakthroughs through diversification in order to jump out of the mire.However,the development path of diversification is not smooth,although it has become an important strategic choice for enterprise.Thus,the speed and degree of diversification need to be tailored to enterprises’ own status and situations.The paper chooses the Guirenniao Co.,Ltd.,the first shareholder of A-share listed company in China’s sports shoes and clothing industry,to study the effects and achievements of diversification in the case that the overall development of the industry is expected to be good.Firstly,the paper briefly introduces fundamental theories of diversification and Harvard Analysis Framework.Secondly,based on the four analysis points of Harvard Analysis Framework,the paper mainly analyzes the development process and effectiveness of the diversification with the Guirenniao Co.,Ltd.as a case.In the Strategy Analysis,this paper clearly combs the layout reasons,layout process and layout results of the diversification strategy of the Guirenniao Co.,Ltd.In the Accounting Analysis,it mainly analyzes the main changes of the accounts receivable and the potential business problems and reveals the actual business situation via deeply digging the connotation of goodwill subjects after applying the diversification management.In the Finance Analysis,this paper makes an overall judgment on the financial situation of the diversified enterprise through four ratio analysis.In the Prospects Analysis,it mainly analyzes the prospects of Guirenniao’s main business and of the corporate control.Based on the above four aspects’ analysis of the Harvard Analysis Framework,this paper draws the conclusion that the application of diversification in the Guirenniao Co.,Ltd.is a failure with serious business risks and financial crisis.At the same time,it is concluded that the reasons of its decline are neglecting the investment and management of the main industry,too-fast diversification speed,unclear development direction and imprudent decisions within its company.From the prospective,this paper finally puts up some suggestions from the four analysis theories of Harvard Analysis Framework for Guirenniao Co.,Ltd.in order to help this company through difficulties.