Based On The Diversification Strategy Perspective Of Suning Debt Crisis Status Research

The traditional domestic retail industry is challenged by the new retail model.Alibaba,Jingdong,Pinduoduo and other related e-commerce enterprises spring up one after another,which poses a significant challenge to the traditional retail giants,and transformation has become the only way for traditional retailers.Diversification strategy is a common measure for an enterprise to develop and transform after maturity.On the positive side,the diversification strategy can provide enterprises with opportunities for successful transformation and make them thrive in the changing times.However,on the negative side,the blind and radical diversification strategy will cause the capital liquidity of the enterprise to be hit,and the enterprise cannot continue to produce and operate activities.Eventually a debt crisis broke out.In this paper,Suning is selected as the case enterprise.After 2012,Suning chooses to adopt a diversified strategic mode,striving to create a series of business empire model with traditional retail as the main body,smart home scene,from the traditional retail of single household appliances to the creation and development of the whole industrial chain of smart home.The goal is to become China’s most powerful retailer in the future.But reckless,excessive and too often invested takeovers have failed to bring high returns to businesses,but its poor management in many fields and a large amount of debt caused by high debt crisis,but also because of this year’s continuous losses caused by delisting risk,now listed in ST.For the research on corporate debt crisis under the diversification strategy,in addition to empirical research,large enterprises with existing practical problems can also be selected to conduct in-depth research and demonstration on individual cases.After sorting out relevant literature,this paper uses case study to sort out the general situation,motivation and degree of diversification strategy of Suning,analyzes the debt crisis Suning faces under the background of diversification strategy from five aspects:raised capital,invest,fluidity,earnings,using the F value model,the financial risk degree of the company is measured,and the causes of the serious debt crisis are discussed.Through the study found that Suning is faced with a huge debt crisis after adopting the diversification strategy.The reason is that under the premise that the hematopoietic capacity of the main business continues to lose money for many years,Suning intends to adopt a diversification strategy to boost the overall profit level of the company.However,during the rapid diversification expansion in the past 10 years,Suning has aggressively entered into unfamiliar product fields unrelated to its main business.It consumed a large amount of capital but could not get the expected return,so Suning chose to sell its assets and continue to whitewash its profits and expand,which eventually led to the outbreak of debt crisis of Suning.In view of the causes of Suning’s debt crisis,countermeasures such as strengthening the value creation ability of main business,prudently diversifying expansion,strengthening risk control,and strengthening internal asset revitalization are put forward.By studying the debt crisis caused by the implementation of the diversification strategy of Suning,this case analysis plays a positive role in helping Suning identify and deal with the debt crisis caused by the diversification strategy.At the same time,it also plays a role of risk warning for other enterprises implementing diversification strategy.We should put the value creation of the main business in the core position,and always be alert to our own financial situation,and provide the experience and reference for Chinese enterprises to carry out diversified strategies.