Research On The Impact Of Diversification Strategy On Financial Performance Of Real Estate Enterprises

Diversification strategy is a good choice for the sustainable development of enterprises.It has strong advantages in dispersing risk,seeking for new profits and avoiding excessive competition.With the popularization of diversification strategy,there are more and more researches on its different aspects.However,because most of the research on diversification strategy is from a larger field of vision,it is difficult to guide the implementation of diversification in specific real estate enterprises.Based on the development of theory and the need of practice,it is of great theoretical and practical significance to study the diversification strategy of specific enterprises.In recent years,the state put out a series of policies of the Macroeconomic regulation and control,so that the growth momentum of the real estate industry slowed,the industry is gradually coming to a period of adjustment.In the face of the cooling industry,real estate companies have begun to try to diversify operations.This paper analyzes the diversification strategy of Nanjing Gaoke Co.,Ltd.,based on the related literature research and basic theoretical analysis.This paper selects two diversification strategies from 2007 to 2018 to analyze the impact of these two diversification strategies on corporate financial performance.The study shows that diversification strategy has a positive impact on the performance of real estate enterprises,represented by Nanjing Gaoke.For the first time,Nanjing Gao Ke diversified into the land parcel development and transfer industry,which improved the profitability of enterprises and effectively avoided the adverse effects brought about by the market and policies;and for the second time diversified into the new industry of small loans,the expansion of the enterprise scale has a positive impact on the profitability,short-term solvency and operating capacity of Nanjing Gao Ke,but the impact is short-term.Based on the analysis of enterprise performance index,this paper puts forward three suggestions on diversification of Nanjing Gao Ke: Combining market and policy guidance,making appropriate diversification strategic choice;Focusing on the main business of real estate,developing diversification reasonably;Different types of diversification strategies are used to achieve the desired results.