Research On The Influence Of M Group’s Diversification On Enterprise Performance

Diversification strategy is an important business strategy choice in the process of development and management of modern enterprises.Diversification may be positive,but it may also bring huge revenues or bear huge debts.Diversification requires sufficient resources and stable main business.If diversification is carried out blindly,it may seriously affect the sustainable development of enterprises due to financial problems,or even lead to bankruptcy of enterprises.So far,Chinese economic research has not formed a complete theoretical system of diversification,and there are also many defects in the diversification development of Chinese enterprises.A series of questions,such as the specific impact of the diversification strategy implemented by an enterprise on the business performance,the evaluation of the impact of the performance,and the choice of diversification,are all questions that need to be considered when discussing the impact of the diversification strategy implemented by a company on the business performance.In this paper,M Group,a representative company in the home appliance industry,is selected as an example to sort out,calculate and analyze the financial statements of M Group for the 10 years from 2011 to 2020,so as to explore the impact of M Group’s diversification on enterprise performance.First,from the level of financial indicators,through the comparison of M Group and Haier Zhijia’s four indicators of profitability,solvency,operation ability,growth ability,using Tobin’s Q value,a comprehensive evaluation of the two indicators,and then concluded that the diversification of the performance of M group evaluation;The other is from the three motivation theory of diversification,still compares M Group and Haier Zhijia,analyzes the non-financial factors of M Group’s diversification on enterprise performance,and finally comes to a conclusion: M Group’s implementation of diversification promoted the improvement of enterprise performance;Finally,according to the actual situation of M Group,reasonable suggestions are put forward for its diversification in the next step.From the perspective of cases,this paper enriches and improves the research on the relationship between diversification and enterprise performance,and also provides some reference suggestions for M Group and related enterprises to carry out diversification in the future.However,the deficiency is that the analysis and research in this paper only rely on theories,annual reports and other data to support the lack of more specific data;Another analysis Angle is relatively simple,the impact of diversification on enterprise performance is diversified and complex,this paper only based on the perspective of financial indicators and non-financial indicators to analyze,not comprehensive.Expect the follow-up study to be more comprehensive,deeper and more specific.