A Case Study On The Diversification Of TBEA And Corporate Performance

In this era of rapid economic development,with the continuous improvement of the degree of global integration and the increasingly perfect market economy,enterprises not only have to deal with at domestic and abroad from a growing number of competitors,but also to face the globalization of the market environment,in this situation,development strategy choice is particularly important.The enterprise according to its own resources,management ability and market environment,to make the future business planning,enabling the company to maintain the sustainable development,at the same time,many enterprises will consider the diversification strategy.The diversification strategy has many benefits to the enterprise,for example,enterprise can obtained from a number of industry revenue;industry across multiple industries can increase the ability to resist risks;involved in a number of areas can also bring synergy to the business.Many businesses benefit from diversification.However,some western countries have adopted a diversified business strategy,not expected to improve the company’s revenue,but also damage the original value of the enterprise.Researchers have tried to uncover the relationship between diversification strategy and firm value.What is the impact of diversification on corporate performance? In the past,most of the empirical research methods are used to select all the listed companies as samples.Therefore,in order to make the conclusions more practical,more practical,we need to focus on the specific company.In this paper,combining the case and theory,the integrated use of financial index method and Tobin Q of TBEA are analyzed,combined with the motivation of diversification,different enterprises choose different motivations lead to industry,while the impact of diversified business scope of TBEA.In the process of TBEA diversified industrial layout in the company’s financial performance will show some changes.Through the measure of TBEA profit ability and the growth ability to show their performance,to determine the implementation of diversification performance each year,based on the selection of some important financial indicators,the financial data and market data with which to analyze the situation of company value changes since the implementation of the diversification of Tobin Q.The main conclusions of this study:(1)After TBEA diversification,2015 HHI has reached 19.55%,a high degree of diversification.TBEA implementation motivation of diversification is to optimize the allocation of resources,decentralized operational risks,to achieve economies of scale,saving transaction costs,the preferential policies of the government.(2)The no related diversification not to provide a stable profit,later related diversified industries and bring long-term benefits for enterprises.(3)TBEA related diversification has a positive impact on the performance of the company,the company’s profitability and growth ability,and corporate value needs to be further strengthened.According to the research conclusion,this paper puts forward some suggestions and strategies.