Research On The Implementation Effect Of Midea Group's Diversification Strategy

Manufacturing industry is the cornerstone of China’s economy.After 42 years of development after China’s reform and opening up,we have changed from labor-intensive industry in the early stage to resource intensive manufacturing industry,and are transforming to technology innovation industry.As time goes on,China’s manufacturing industry is striving to catch up with the middle end,and some fields are striking towards the high end.With the accumulation of talents and continuous breakthroughs in technology,we are bound to march towards the high end industry.Product diversification strategy can help manufacturing enterprises break the current pattern and move forward to the high end.It can not only enrich the composition of their profits in the three financial statements of enterprises,but also effectively and steadily disperse the operational risks of manufacturing enterprises.In recent years,due to the upgrading of Internet technology and automation technology,intelligent products are rapidly updated and iterated,which greatly improves people’s quality of life.The scale of domestic intelligent home appliance market is growing rapidly,which makes the competition of home appliance industry intensified,and also brings new development opportunities.Therefore,more and more enterprises choose diversified development strategy,but there are risks in diversification,not all enterprises can bring profit growth,and some enterprises fail because of the implementation of diversification.This paper selects Midea Group,which has a market value of more than 600 billion as a case study.Midea Group has now become a successful representative of the transformation and upgrading of China’s manufacturing industry,and is the only leading enterprise in the whole industry chain and product line of the home appliance industry in China.This paper makes an in-depth analysis of Midea Group’s financial statements,analyzes the reasons for Midea Group’s implementation of product diversification strategy from two aspects of micro environment and macro environment,and points out that at present,the profits of manufacturing industry are increasingly compressed,the vicious competition in the industry is cruel,and the products are lack of innovation and homogenization are gradually expanding To transform from the middle end to the high end,and implement the product diversification strategy after weighing the advantages and disadvantages.This paper uses the method of financial data analysis:firstly,it analyzes the three major financial statements of Midea Group,objectively reviews the changes in the financial statements of Midea Group in the process of operation and joint venture merger and acquisition;secondly,it analyzes the proportion of the main business of Midea Group;thirdly,it reviews the effectiveness of the implementation of product diversification strategy,and explores the value of Midea Group Through the implementation of product diversification strategy,what competitive advantages has Midea Group achieved in the home appliance industry,and draw valuable conclusions based on the analysis of Midea Group’s financial statements.Finally,the paper puts forward relevant countermeasures and suggestions to guide Midea Group to manage and implement product diversification strategy more scientifically.