Study On The Influence Of Enterprise Value Chain Extension On Financial Performance

With the rapid development of China and even the global economy,the international and domestic market competition is fierce,more and more enterprises choose extension industry value chain,integrating resources optimization to maintain and enhance their strength.But an extension of the value chain is a double-edged sword,enterprise after the extension of value chain,the stability of the upstream raw material supply,saving transaction costs,to expand sales channels downstream,expand market share and increase revenues.Along with the enterprise value chain extending continuously,on the other hand,spend a lot of people,goods,content,management difficulty increases,increase management cost,extremely unfavorable influence on the management benefit of enterprise.Judge extension strategy is reasonable,the success of the enterprise value chain,depends largely on its impact on corporate financial performance.If after the implementation of enterprise business performance growth,profit increase,the strategy of the value chain extension is reasonable.Whereas,the performance is not effective,or even decline,increasing the burden of the enterprise,strategy of the extension is not successful.Therefore,delving into the relationship between the enterprise value chain extension and the financial performance,weigh the pros and cons,using the best extension strategy to maximize performance,this study is of great significance.In this article,based on the case study analysis,enterprise value chain extension effect on financial performance.First,this article expounds the theoretical basis,pave the way.Secondly,this article introduces the general situation of case company A value chain extension,brief description of their background,analysis of value chain extension motivation,comprehensively expounds the extension in the value chain activities of A company,how to determine the strategy according to the practical situation and implement.Finally,the company A before and after the extension of value chain analysis,the longitudinal comparison,mainly focused on the change of the company which include profit ability,debt paying ability,operation ability,development ability,risk control ability etc.,to reveal the value chain extension effects on financial performance.This article uses the relevant theories and methods,makes a comprehensive analysis by selecting a number of indicators,concluded that A company carry out the strategy of value chain extension,expand the scale of the company and its business scope,decentralized management risk and financial risk,and implements,middle and downstream of the whole chain on competitive advantage,enhance the profitability and ultimately improve the financial performance,improve the comprehensive strength;And make A company showing A strong momentum of development,foot flat for industry leading position.