Study On Diversification Motivation And Economic Consequences Of YOUNGOR Group Co.,Ltd.

Nowadays, the listed companies operating under the influence of financial markets has become increasingly intense, diversification of enterprise expansion has become a trend and focus. Diversified enthusiasm rising of listed companies in our country, many diversified expansion development of listed companies, such as Evergrande from real estate to football and culture, mineral water and etc; Yueda group, the traditional energy industry from the car to the step in new materials, new industries; Wanda group to go to real estate price, acquired legendary pictures, seek breakthrough of film and television entertainment industry. Wahaha group is also involved in the commercial real estate development. Apparel industry leading enterprises youngor troika the apparel, real estate, equity investment operation for a long time, become the model of "doing nothing" garment industry, in recent years, super billions stake in citic shares. During the course of diversified expansion, many enterprises suffered diversified expansion. Wahaha group ended in failure, the commercial real estate expansion of Evergrande diversified real estate business is loss-making, san-jiu group restructuring for diversified expansion. There is also a part of the enterprise through diversified scale expansion and the improvement of performance, such as yueda kia in diversified expansion of assets in the rapid enlargement, break through the billions. Enterprises choose blending diversified development to the economic consequences of academia has been widely discussed. Whether to expand, how to carry out expansion is a difficult problem in front of the current many enterprises. So at this stage it is necessary to clear the economic consequences of the development of diversified expansion into enterprise how to improve performance for diversified development.Due to YONGER group’s diversification expansion degree is high, long cycle, is a clothing industry leading enterprises, this article selects youngor material as a case. Analysis of the mechanism of action of the diversified expansion of youngor’s financial performance and impact. This paper the theoretical basis and literature review, and then introduces the development course of youngor company, the company, and then analyze motives, youngor diversified expansion finally focus on the economic consequences of its diversification include the group’s overall performance and the performance of segmentation industry research. Taken together, the diversity of younger than single industry development to improve the company’s size and income level but did not spread financial risk, investment expansion damaged youngor value creation ability, promote the company’s market performance, diversified expansion behavior motivation is not to spread risk, diversified expansion but through the strategic cooperation, related party transactions, and adjust the focus to achieve synergies, response to policy changes, seeking management and shareholder interests. The research conclusion of this article for the current macro-economic downward trend under the enterprise through diversified fund balance, improve performance has important guiding significance.