A Case Study On The Failure Of TRUEIN GROUP Diversification Investment From The Perspective Of Strategy

With the further development of economic globalization and information technology,the domestic market is becoming more complex and diverse.In order to better occupy the advantage in the competition between enterprises and further seize the market resources,enterprises have begun to choose to implement diversified investment strategy.Under the diversified investment,the scale of some enterprises has been effectively expanded,and the profitability of enterprises has also increased significantly.At the same time,it brings business crisis to some enterprises,which leads to the decline of business stability.Xiaoying agriculture and animal husbandry is a typical example of failure.The enterprise was founded in May 2003 and started with pig breeding.It was successfully listed in 2010 and began to implement the diversified investment strategy.Under the diversified investment,the enterprise developed rapidly,but at the same time,it also brought a series of problems,such as the decline of enterprise resource utilization,continuous loss of investment industry and so on.Due to the adverse expansion of enterprises and the neglect of core competitiveness,the business performance of enterprises declines,the debt pressure increases and the competitiveness is lost,which eventually leads to the outbreak of debt crisis in 2018,the face value delisting in October 2019 and the failure of diversified investment strategy.Based on the financial data of TRUEIN GROUP from 2010 to 2018,this paper studies the diversification strategy of enterprises.First of all,it mainly describes the basic situation of the case company and the process of diversified investment strategy of the company.Secondly,according to the diversification of enterprises in different stages,this paper analyzes the motivation of enterprise diversification strategy.Then through the relevant financial data,this paper analyzes the financial realization of TRUEIN GROUP after the diversification strategy,which paves the way for the subsequent analysis of the reasons for the failure of its diversification strategy.Finally,this paper analyzes the reasons for the failure of TRUEIN GROUP diversification strategy in terms of corporate strategy,business strategy and functional strategy.It is found that the failure of the strategy is caused by many factors,but the most important factor is the internal factors.In the corporate strategy,the management lacks the corresponding restraint mechanism,some decisions are not scientific,and they make wrong strategies.In the business layer strategy,blind pursuit of product differentiation and the selected business portfolio failed to produce synergy effect,resulting in continuous loss of diversified business.In the functional strategy,poor debt management ability,the debt burden is heavy,and the human resource strategy of the enterprise fails.The lack of corresponding professionals makes the business efficiency of the enterprise in the Internet and financial investment sector low.By studying the typical case of TRUEIN GROUP failure in diversified investment strategy,the paper can help other enterprises to realize diversified investment strategy,experience and inspiration,Promote the healthy development of our enterprise strategic management.