Research On The Relationship Between Midea Group’s Diversified Operation And Enterprise Performance

Diversification has become one of the strategic choices for modern enterprises to achieve their business expansion.However,it may cause positive and negative effect on co-operations.Some enterprises can improve their efficiency through it.Conversely,some enterprises may not only fail in new profit growth,but also affect the original business development.On the other hand,the relationship between diversification and corporate performance has been the focus of scholars’ debate all the time,which can be divided into three parts: discount theory,premium theory and compromise theory.Therefore,this essay focuses on the the relationship between diversification strategy and enterprise performance,then discusses the reasons for the achievement or failure of diversification.This essay selects Midea Group,a representative enterprise with early diversified operation,taking diversification motivation,financial performance,non-financial index performance as the research and analysis idea to conduct in-depth research and analysis on the case company.First of all,the paper summarizes the case of diversification motivation with relevant theories.And then analyzes the corporation performance of Midea after diversification from two perspectives: financial performance indicators and motivation impact indicators.It is found that Midea Group has a good performance after diversification,and then summarizes the reasons for its success with the relevant knowledge of diversification performance,listing related advice for the future diversification development of Midea Group.Finally,forming a conclusion that Midea Group’s diversification has brought good business performance to the enterprise.According to the reasons of Midea Group’s successful diversified operation,the paper writes the enlightenment of diversified operation of Home Appliance Industry and the prospect of future research.To some degree,this paper enriches the research on the relationship between diversification and enterprise performance,and provides reference value and suggestions on how to get better diversification of E-commerce,including Midea.