A Case Study Of China Literature’s Vertical Mergers And Acquisitions From The Perspective Of Industrial Value Chain

In recent years,with the popularization of the Internet,the continuous development of Internet technology and network equipment has brought opportunities for the development of online literature,and my country’s online literature industry has entered a period of rapid development.During this period,online literature companies have formed a complete industrial chain through a series of horizontal mergers and developments.Although a mature business model has been formed,the scale of the online literature market is restricted by the scale of Internet users.With the slowdown in the growth of Internet users,the online literature market has become increasingly saturated,and competition in the industry has become increasingly fierce.At the same time,the emerging short video entertainment has further squeezed the time of Internet users and distracted Internet users’ attention to online literature.In order to seek new business growth points,online literature companies have begun to try to expand their business scope to more downstream areas and conduct vertical mergers and acquisitions.China Literature,as the largest online literature company in China,has also participated in the ranks of mergers and acquisitions.Whether its mergers and acquisitions can bring the expected results has been widely concerned in the network literature industry.This article analyzes the case of China Literature’s merger and acquisition,analyzes the motivation of this merger,and what kind of impact the merger will have on China Literature’s industrial value chain and performance,and provides a certain reference for the future development of other domestic online literature companies.From the perspective of the industrial value chain,this article deconstructs the case of China Literature’s merger and acquisition,and analyzes the performance of the merger.The motivations of mergers and acquisitions are developed from the two dimensions of the development trend of the online literature industry and China Literature’s own conditions.It is concluded that the motivations of mergers and acquisitions come from the pressure of market competition and the needs of downstream development of the industry;the changes in the industrial value chain are compared with the changes after mergers and acquisitions.It also analyzes the value-added model of the new industry value chain;in the performance analysis,the performance of mergers and acquisitions is analyzed through financial indicators and non-financial indicators;finally,the synergy effect of mergers and acquisitions is evaluated based on the Wall score method.Based on the study of the case study of China Literature’s acquisition of Xinli Media,this article concludes: In terms of financial indicators,China Literature’s revenue has risen sharply,its growth capabilities have changed significantly,and mergers and acquisitions have achieved better results;in terms of non-financial indicators,China Literature has adopted mergers and acquisitions.The extended industrial value chain has achieved its M&A goals;in terms of synergy,China Literature’s acquisition has not brought significant changes,and management and finance need to continue to strengthen its integration with Xinli Media.Generally speaking,China Literature’s merger and acquisition was successful,but the follow-up resource integration issues still need to be paid attention to.