Research On The Effect Of Diversification On The Corporate Performance Of Hodo Group

As for enterprise strategy choice,when the enterprise scale is small,most enterprises adopt the specialized business strategy;when the enterprise scale enlarges,usually it will gradually adopt the diversified business strategy.Diversification strategy is very important for the enterprise to grow and develop.Therefore,the study on enterprise diversification has a strong practical significance.In terms of the diversification strategies,domestic and overseas scholars have done in-depth studies from different perspectives.However,research ideas,points of view and conclusions are different.Hodo Group carry out diversification strategy earlier,and now it has been a famous diversified business enterprise from a small knitting factory.Its motives of diversification,performance of diversified operations and the problems in diversified operation are all worthy of study.In this paper,Hodo Group as a case study.First of all,in the first chapter,the author expounds the research results of diversified business by scholars at home and abroad,and concludes the theory of drivers of diversification and the relationship between diversification and enterprise performance.On this basis,the second chapter introduces the case background,respectively,from its overview,diversification process,drivers of diversification.This paper analyzes the drivers of the diversification of Hodo Group from the three aspects of portfolio theory,scope economy theory and market power theory.Then the third chapter is a case study.This paper selects financial data from 2002 to 2015 financial data,and analysis of its performance of diversified operations based on financial indicators and business unit performance.Then it combined with the market value indicators of Hodo Group to evaluate its diversified business performance.Through the above analysis,in the fourth chapter,the problems in the diversification of Hodo Group are put forward.Finally,in the fifth chapter this paper gives the corresponding recommendations.Through the above analysis,we can find that the diversification of Hodo Group did not improve the business performance.There is three issues in the diversified business of Hodo Group.First,the diversification of Hodo Group causes reducing the investment to the main business of clothing,so that clothing business income stagnant,limiting the main business development.Second,the diversification of large industry span does not make the effective use of Hodo brand.Third,the Hodo Group misjudged the development prospects of diversified industries,so that in it lack of core competitiveness in the diversified industry And finally put forward the corresponding recommendations,so that it can better implement the diversified business strategy.