The Research On The Diversification Strategy Of China's Electrical Household Appliance Listed Companies

China's electrical household appliance listed companies play a very important role in electrical household appliance industry. Many of them are domestic famous brands, such as Haier, Changhong. In the late 1990s, listed companies of electrical household appliance have always actively practiced the diversified operating. It can be said that Such diversified operating of listed companies has become typical behavior characteristic of operating.In this paper, on the basis of research review of the diversified operating, we took the specific study of the diversified operating of China's electrical household appliance listed companies. First of all, from the point of view of the enterprise features, industry factors, national policies and capital market environment, dynamics of diversified operations are studied. Though studies, on one hand, our electrical household appliance listed companies would meet the diversified characteristics of the operating conditions ,on the other hand, with intense competition in industries, the profit level is relatively low. However, because of more attractive new industries, it has prompted the diversified operating in order to decentralize management of listed companies risk and expand margins. It also provided conveniences with the support of state policies. But the capital market environment prompted electrical household appliance listed companies to train internal market through diversification. The characteristics of electrical household appliance listed companies' operating path and the realized way are described in this paper.In the part of empirical study, by using variance analysis with the companies diversified operating and performance. Before variance analysis, the sample companies are selected into highly diversified groups, moderate diversified groups and low diversified groups. The degrees of diversification are measured by Herfindhal index, the enterprise's performance is measured by profitability, market value, operating risks and the capabilities for repaying. The results of enterprise's performance showed that moderate diversified companies are more excellent in profitable capabilities, while the highly diversified companies are relatively weaker in repaying capabilities, and there is no significant difference among these three groups. Finally, the diversified operating problems of China's electrical household appliance listed companies are outlined in this paper by the method of case analysis. At last, the paper gives the solution and advice.