Research On The Motivation, Risk And Performance Of Diversified Mergers And Acquisitions Of Outdoor Sports Enterprises

Under the background of our country’s rapid economic development being driven by the traditional high pollution and high resource input,the government and timely put forward the "new normal understanding of economic development ",which is to transform the economic development into a new type of informatization production drive and intensive production drive,in order to achieve high-quality development.This great change in economic development mode is the necessary way for Chinese enterprises to achieve sustainable development and enhance their core competitiveness.But at the same time,it undoubtedly poses a great challenge to the traditional development mode of Chinese enterprises.At this time,many enterprises choose diversification strategy to improve production mode under the existing business model and market scale,maximize the use of old assets,and introduce new scientific and technological productivity while undertaking low cost,reduce environmental pollution,at the same time achieve the government’s requirements of changing development mode,optimizing development structure and transforming development power.However,can the implementation of diversification achieve the above objectives and affect on corporate performance positively? In addition,if enterprises choose to diversify,the risk factors that this strategic behavior may bring to enterprises in the new era and under the new background are also worth discussing.Based on this point,this paper chooses the subdivision market-outdoor goods industry for analysis and discussion.Outdoor goods are professional equipment products used in outdoor activities.The concept of outdoor sports has been formally introduced into China for less than 100 years.However,in the consumer market,the development of outdoor goods industry is short and vigorous.But with the rapid development of the global outdoor market,the growth rate of China’s core outdoor market dropped sharply in 2012,with a decline of 39.6 percentage points.The decline was appalling.Since then,the growth rate has been slowly declining.Therefore,the 2012 is regards as the beginning year of the industry’s shock adjustment period.Relevant enterprises in the industry have been seeking possible opportunities to resist industry risk since the next year,2013.At this important time," Toread " as industry leader chose diversified M&A strategy as a means of dealing with industry business risk.Therefore,based on the facts of this case,this paper analyzes the motivation,risk and related performance changes of diversified M&A of Toread.The main contents of this paper are divided into the following chapters: The first chapter introduces the research background,significance and research methods of the article,and summarizes the research path and innovation and shortcomings of this article.The second chapter is a literature review,which introduces the research results of diversification and risk,diversification motivation,diversification and competitive advantage,diversification and competitive disadvantage in China this year.Most of these studies focus on empirical research and draw conclusions based on the analysis of data results,while ignoring the understanding of the overall and internal environment of enterprises and the internal reasons for the change of results.The third chapter is the introduction of related theories,including principalagent theory,scale economy theory,synergy effect theory,transaction cost theory and scale expansion theory.The fourth chapter is the case environment analysis of the Toread,including macro-economic environment analysis,policy environment analysis,social environment analysis,technical environment analysis,industry environment analysis,micro-enterprise status analysis,five-force model analysis.The fifth chapter is a case study of diversified M&A of explorers,including the process of M&A and the measurement of diversification degree.In addition,it also involves a simple profit analysis and research cost analysis.The sixth chapter is the analysis of the diversified comprehensive financial indicators of the Toread,with the return on net assets as the main index,to analyze the process and results of the change of the Toread’s asset use efficiency,debt risk and profitability before and after diversification.The seventh chapter is the analysis of the motivation of the M&A of the explorer,and this paper uses the coefficient of variation index and event analysis method to study the implementation effect of the motivation.The eighth chapter analyses the current development situation and case enlightenment of the Toread,and finally puts forward relevant suggestions for the follow-up of their operation.The results of this paper show that the implementation effect of the diversification strategy has not received positive feedback in five years,especially the profit-related indicators.Except for the period cost of Toread,other data indicators show that the diversification strategy of Toread makes its operational efficiency lower.The main reason for this result is that the performance of the acquired enterprise is not up to the standard.Therefore,this paper analyzed and discussed the diversification risk of outdoor goods industry,and put forward some suggestions for the follow-up development of the Toread.It can provide reference for related enterprises to control the risk of M&A and achieve the M&A target when they make diversification investment.Besides,there is a wish to provide some reference for investors to analyze the information of M&A of outdoor goods enterprises.