Analysis Of The Motivation And Effect Of Strategic Transformation Based On Asset Divestiture

At present,China's economic development has entered a new normal.Growth has slowed down,structural adjustments,and power transitions.Enterprise development faces many challenges.Changing business strategies in a timely manner and formulating a strategy that is more in line with the market development trend can only follow the market tide and stabilize the sustainable development path.However,some companies are too concerned about short-term interests,and they are not proactive or timely in strategic adjustment.When some assets are poorly managed,they are reluctant and unwilling to carry out contractive asset reorganization when they are in distress,resulting in severe financial crisis or even bankruptcy..In addition,there are some bad practices that some companies only use assets divestiture as shell protection,cap removal,and whitewashing.These companies have blindly divested their assets and ignored the matching with the company's long-term strategy when operating difficulties arise.They do not have a scientific understanding of the significance and role of asset divestiture.This article studies the application of asset divestiture in strategic transformation,that is,using asset divestiture as a means of strategic transformation.It expounds the positive significance of asset divestiture to enterprises and the relationship between asset divestiture and strategic transformation.A correct understanding of asset divestiture can provide a reference for companies to better implement asset divestiture and strategic transformation.This article uses a combination of theory and case analysis.First,it theoretically outlines the rationality of strategic transformation based on asset divestiture,and then analyzes the motivation of Zhejiang Baobao Digital Culture Group's strategic transformation based on asset divestiture from financial performance.,Capital market response,governance institutions and other aspects of the implementation effect of research,it was concluded that companies can only achieve long-term development by timely adjustment of strategy,and asset divestiture is not just a helpless move in the face of operating difficulties,combined with the current Industry trends The timely stripping of assets without development prospects is conducive to optimizing the allocation of resources,improving core competitiveness,optimizing the governance structure,and establishing the image of the capital market,which is an effective method of strategic adjustment.At the end of the article,relevant suggestions are put forward for the implementation of asset divestiture and the issues that should be paid attention to during the implementation process,such as formulating a suitable asset divestiture plan and paying attention to talent reserves.