Research On The Application Motivation And Effect Of Asset Divestiture In Strategic Transformation

With the continuous development and improvement of China's market economy,uncertain factors in the market have more and more influence on strategic transformation,and asset restructuring of enterprises has become more and more common.Asset restructuring includes both expansionary and contraction asset restructuring.At present,the way of asset restructuring is being adopted by many excellent enterprises.In asset restructuring,contracting asset restructuring,i.e.asset stripping,is widely adopted by enterprises.For enterprises in recession,effective divestiture of assets is not purely for profit or some bad purpose,but for the effective implementation of strategic adjustment by using the funds obtained from divestiture of assets,to form a new profit growth point,to ensure the long-term healthy and sustainable development of the company.The contraction reorganization of enterprises by divestiture of assets does not mean the failure of enterprises operation.Taking the initiative shows a strategic intention of the enterprise.It is an effective way to upgrade the industrial structure and adjust the main business to strip the departments or assets that have limited growth prospects or are not conducive to the overall business development of enterprises and to place the limited resources in the most competitive areas so as to realize the optimal allocation of resources.For enterprises with sustained low operating performance,they need to adapt to the changes of market demand,change their operating strategies according to their own characteristics,and implement effective strategic adjustments to ensure the long-term and sustainable development of enterprises.This paper studies the application of asset divestiture in strategic transformation,that is,asset divestiture as a means or a kind of help to adjust the strategic objectives of enterprises.It combines asset divestiture with strategic transformation of enterprises,deeply analyses the role of asset divestiture and refines the relationship between asset divestiture and strategic transformation.Through the method of combining theory with case study,this paper deeply studies the application motivation and effect of asset divestiture of Listed Companies in strategic transformation.It further illustrates that asset divestiture is not only the reflection of the decline of enterprises,but also the divestiture of bad assets from enterprises,attaches importance to the subsequent resource integration of enterprises,and effectively combines asset divestiture with the strategic intention of enterprises,so as to help form enterprises.New profit growth point is an effective way to withdraw resources.In this paper,it elaborates in detail that the combination of asset divestiture and strategic transformation can also be a strategy to maintain its sustainable operation.