Analysis And Comparison Of Diversification And Financial Performance Of Leading Enterprises In The Retail Industry

Costs such as manpower,rent,utilities,etc.have increased.In the next five to ten years,store and property leases will be expiring,and the pressure of rent increases will remain high.The impact of the epidemic has led to a further slowdown in the rate of return of retail enterprises,resulting in increasingly fierce competition in the retail industry..And diversification expands the company’s business scope and enhances the company’s profitability.Therefore,more and more retail enterprises are getting rid of the predicament by implementing the diversification strategy.The problem faced by the current retail enterprises is no longer a simple choice of whether to implement the diversification strategy,but how to realize the transformation and how to start again after the transformation.As my country’s retail giants,Suning.com and JD.com have implemented a diversified business strategy earlier and are currently involved in many business fields such as retail,logistics and finance,but the development trends of their financial performance in recent years are completely different.Therefore,choosing these two companies as research objects can provide a large amount of credible data for exploring the impact of diversification on financial performance.First of all,it introduces the development process and business model of the two companies’ diversified layout,and then conducts an in-depth analysis of the financial performance of the two companies.Finally,based on the above research,evaluate the impact of the implementation of the diversification strategy on the company’s financial performance.The conclusion can provide reference and reference for my country’s retail enterprises to implement diversified management.The research methods used in this paper are mainly: literature research,qualitative analysis and quantitative analysis.In order to explore the impact of diversification on the financial performance of Suning.com and JD.com,this paper takes the following steps: First,it reviews the development history of these two retail giants,and makes a comparative analysis of their diversification approaches and strategies.According to the HHI value,the degree of diversification of the two is quantitatively analyzed;secondly,the company’s financial performance is compared and analyzed through the two traditional financial indicators,EVA and F value;finally,the diversification development trend and financial performance of the two are compared to explore the company’s diversified development The impact mechanism of business operation on financial performance.The main conclusions of this paper are: As the leading enterprises in the retail industry,Suning.com and JD.com have different effects on financial performance due to their diversification.Suning.com’s blind deployment of other businesses under the premise of weak development of its main business has led to more prominent liquidity problems and continued deterioration of its financial performance;while JD.com focuses on related diversification involving logistics and finance,further improving the company’s main business.Core competitiveness,financial performance has been significantly improved.Therefore,when implementing a diversified operation strategy,an enterprise should ensure that its main business provides sufficient liquidity support,and at the same time,it should give priority to the relevant diversification strategy of serving the main business in the diversified operation,and reasonably adjust the diversification process to fully understand the situation of other industries,Enter when and how.Only in this way can the company stand out from the increasingly fierce competition through diversification and further consolidate its position in the industry.