Analysis Of Gree’s Diversification Strategy From The Perspective Of Core Competence

Established in 1991,Gree is an internationally well-known integrated home appliance company.Under the guidance of professional strategy,it has gradually become the leading enterprise in the domestic air-conditioning industry.Since 1995,with the establishment of regional sales companies,a new marketing model has been formed.Gree’s market share has continued to increase and production and sales of air conditioners have ranked at the first place for many consecutive years.At the same time,Gree has gradually formed its own core competitiveness.Its photovoltaic centrifuge system,magnetic levitation frequency conversion refrigeration compressor and water chiller and other technologies are also recognized as the world’s leading technology.In order to march towards the goal of being a world leader,Gree began to implement a diversified development strategy.While improving and enriching the supporting industry chain,it entered other related industries.Since 2004,Gree has successively acquired companies such as Gree Electric,Xinyuan Electronics,Small Home Appliances,and Lingda Compressor;in 2013,Jinghong Refrigerator was acquired;in June 2015,it began to produce and sell mobile phones,while gradually stepping into precision manufacturing,robot and other smart equipment industries.Although these industries are not directly related to the air-conditioning business,they are all part of Gree’s smart home system.In early 2016,Gree plans to enter the new energy vehicle industry by acquiring Yinlong.This paper analyzes the diversified development of Gree from the perspective of core competitiveness,using the method of case study to systematically analyze the relationship between M&A diversification strategy and core competitiveness and propose policy recommendations for M&A diversification strategy.Firstly,analyzed Gree’s core competitiveness based on the relevant literature review from the perspective of core competitiveness,corporate diversification strategy,and the relationship between core competitiveness and diversification strategy.The core competitiveness is reflected in research and development capabilities,human resources,marketing,management and brand advantages.Secondly,using SWOT analysis analyze Gree’s diversification,summarizing its existing diversification path by its timeline,and using HHI index to measure its diversification degree.Futhermore,a case study method was used to analyze Gree’s acquisition of Zhuhai Yinlong,detailed analysis of Gree’s M&A motivation and M&A process.Summarized the failure reason from the perspective of core competitiveness,the core technology of target company and the protection of interests of small and medium investors based on the lessons learned from the failure of Gree’s acquisition of Yinlong,it is proposed that corporate diversification should make full use of core competitiveness and cautiously choose M&A targets,strengthen the protection of small and medium investors’ interests and other recommendations.