A Case Study Of Diversification’s Effects On Financial Performance In Haier Group

It has been fifty-seven years of development since 1957, Haig Ansoff first proposed the concept of "diversification", diversification plays a crucial role as an aspect of enterprise strategy, many enterprises treat diversified operation as an important means of enterprise development. In our country, with the constant improvement of market economy, the enterprise scale expands unceasingly the competition between the enterprises increases continually; many enterprises began to adopt diversification strategy to enhance the competitiveness of the enterprises, but not all the enterprises which implement the diversification strategy have a good development, so diversified enterprises whether can bring economic benefits to the enterprise is being questioned.This paper selects Haier group as the object of case study, because Haier group is the implementation of a typical representative of the diversification, and achieves good development, occupies an important position in China’s home appliance market.the article makes the study mainly of how the diversification effects the financial performance of the firm.Haier today’s results could represent the diversified business will be able to promote the development of enterprises or not and achieve the goal of enterprise “bigger and stronger”,I hope the results of this paper can play a reference for other enterprises.Theory and case are two kinds of method how this paper do the study. Firstly describe the research background, significance and research methods; Secondly introduce the theory of diversification and financial performance evaluation theory; The third part is a brief introduction of Haier Group; fourth part is the evaluation of the diversified operating results;Analysis of the impact of diversification on the Haier Group’s financial performance, and identify factors affecting corporate financial performance; The fifth part is a summary of the Haier Group diversified experiences and lessons learned, and provide some suggestions on strategic choices.The conclusion we have through the research is that,because the different research objects and different data selected,studies show different scholars believe diversification may have different effects on the financial performance in theory. In the case elated diversification has proved a promotion effect on the company’s financial performance, and unrelated diversification adversely affect the financial performance. In the development process enterprise should pay close attention to behaviors which with financial risk.