The Influence Of Diversification And Nucleonization Strategy On The Performance Of Retail Enterprises

Different enterprises choose different development strategies in their development processes. We can divide enterprises into diversified enterprises and refocusing enterprises when we choose industries amounts one company operates in as the judgment standard. Diversified enterprise means that one company not only operates in the main business but also participates in industries outside of main business; and refocusing road refers to one company keeping in a certain industry.Scholars of the past have done a lot of research on diversification and refocusing operation and many related theories were put forward. These theories point out that corporate diversification will bring enterprises some advantages such as scope economy, synergy effect and internal capital markets; and it will also cause disadvantages, for example agency problems, excessive investment, cross-industry subsidies and capital allocation inefficient. On the other hand the supports of refocusing management put forward resource theory and value chain theory. The former theory says that only the enterprises which have the core resources can obtain good performance and competitive advantage; and value chain theory says that as the enterprise can has the advantage only on the one link of the whole value chain, so one company must focus on the main business. Over the years, the discuss of which kind of way companies actually choose will bring better performance does not have a definite result. Many empirical researches about the performance of diversity and refocusing business have been done in the past, including studies choosing all industries together as the sample and the analysis for a particular industry, but it didn’t form a conclusion in the end.This paper selects the retail industry listed corporations as research samples. The retail industry has the characteristics of abundant cash flow, which provides the basic conditions for the retail industry diversification development; and retail industry is also affected by the impact of large foreign enterprises and retail network, comprehensive profit rate has been low, this also makes the retail industry company has strong motivation to carry out diversified development. This article choose ROE,ROA,EPS as the comprehensive performance index; overall diversity measure entropy index as enterprise diversification index, and study the impact of diversification to performance of retail enterprises by statistical test, correlation analysis and panel data regression model. Finally based on the result, the article chooses ROE as the example and chooses Du Pont financial analysis to study the source of the performance difference. At last, through this research we find that the retail enterprise diversification can reduce the comprehensive performance of the enterprise management, which means that the more dispersed the retail enterprises manage the lower performance is. Related theory is verified at the same time; the retail enterprise diversification promoted sales gross margin and sales net interest rate, but significantly reduced the asset turnover of the enterprise, so finally the comprehensive performance level is low.