Research On Meituan’s Diversification Motivation And Performance

Diversification strategies of traditional companies have failed one after another,and they have gradually returned to their main business.On the contrary,most large Internet companies still operate diversified businesses,and they are rapidly occupying emerging industry markets.But the paradox is that many Internet companies which invest new businesses have suffered substantial losses,but they still increase investment.This phenomenon has led to thinking about the diversification strategy of Internet companies.Specifically,on the basis of the characteristics of the Internet industry,this thesis studies the following questions:what are the motivations for the diversification of large Internet companies,how do the motivations affect performance,and how to evaluate the diversification strategies of large Internet companies.First of all,this thesis adopts normative analysis to sort out the definition,classification,motivation and performance of diversification in the existing literature,and sort out the research perspective of Internet enterprise diversification.On the basis of enterprise life cycle,core competence and synergy effect theory,this thesis draws a research framework of"diversification motivation-strategy-diversification performance-motivation realization",and uses this framework to study case.Secondly,this thesis introduces the background of this case,summarizes the strategies of Meituan at various stages and the characteristics of the community group buying business.After that,analyze the motivation of Meituan’s diversification.Third,analyze the market performance,financial performance and non-financial performance of Meituan before and after the case.This thesis uses the event study to analyze the abnormal return rate,CAR and BHAR of the event to study the market performance;analyzes the debtpaying ability,operating capacity,profitability abilities and growth ability indicators of Meituan,and uses the principal component analysis method to analyze the financial performance;in terms of users amount and the market performance to research non-financial performance.Finally,using the theories to summarize the performance of Meituan’s diversification.Study whether Meituan’s new business has achieved the goals in the motivation.Including,whether the users and operating income have increased again,whether the core competitiveness of Meituan is conducive to the development of new business,and whether the new business and the original business have synergies.Through research,it is found that there are three reasons for Meituan’s diversification:breaking through bottlenecks to achieve sustainable development,using existing core competitiveness to save costs,and building an integrated platform.The motivation directly affects the strategic of the diversification.Meituan chose community group buying instead of other new retail methods to enter the retail industry,which affected Meituan’s performance.Only strategies based on development strategies,core competitiveness and industry needs can develop in the long run.Only by clarifying the motivation of diversification,can investors judge whether the enterprise diversification strategy has long-term development ability and the necessity of continuous investment.It is very important for Internet giants entering the platform period to use diversification strategies,to increase investment and quickly occupy the market.Even if it is likely to face the crisis of performance decline,based on the synergy analysis,the overall advantages outweigh the disadvantages.Finally,it is hoped that the above conclusions can be helpful to business operations,regulatory authorities’ supervision and investors’investment decisions.