Study On The Financial Performance Of Anta's Multi-brand Strategy

After the inventory crisis of Chinese sporting goods industry in 2013,many sporting brands began to embark on strategic transformation under the dual influence of the entry of foreign competitors and domestic homogenized competition.Nowadays,some enterprises adopting multi-brand strategy have been out of the predicament and have a positive development momentum,which preliminarily indicates that the multibrand strategy is feasible.This paper hopes to study the financial performance of the successful cases of multi-brand strategy transformation and explore the motivation,implementation path and financial performance impact of multi-brand strategy.Moreover,inspiration and suggestions for the implementation of multi-brand strategy transformation of domestic sporting brands will be provided.This paper takes Anta as the research object and makes a financial performance study on its multi-brand strategy.First of all,in order to get a preliminary understanding of what multi-brand strategy is,this paper will briefly describe the operation status of Anta and the implementation status of its multi-brand strategy.Then,from the internal and external perspectives,analyze Anta's motivation to implement the multi-brand strategy.That is to solve why Anta implements the multi-brand strategy.Then,the operation data of Anta from 2008 to 2019 are collected.And the industry game analysis,short-term value effect analysis,long-term financial performance analysis and nonfinancial performance analysis are used to evaluate the effect of Anta's multi-brand strategy.Finally,summarize the above research results and put forward reasonable suggestions from perspectives of Anta and the sporting goods industry.After a series of analysis,the conclusion of this paper is: Anta's multi-brand strategy is feasible and a successful model of brand strategy transformation,whose effect is outstanding.The specific research conclusions are as follows:(1)The feasibility of multi-brand strategic transformation in the industryBased on the asymmetry of the market competitiveness between domestic and foreign sporting brands,it is found by solving the game model equilibrium that: The domestic sports brands with strong market competitiveness are suitable for adopting multi-brand strategy.On the contrary,the others are not recommended because of the high cost and high risk of implementing multi-brand strategy and interference measures taken by foreign sports brands.Anta,the research object of this paper,has strong market competitiveness,so it is feasible to implement the multi-brand strategy.(2)Multi-brand strategy has obvious profit effectFirst of all,Anta's new brands are high-end brands with large profit margins,so Anta's overall profitability has increased.In 2019,Anta's profit margin of its main business increased to 55.0%,ranking first in the industry.Secondly,with the increasingly abundant multi-brand matrix of Anta and the continuous growth of the income,Anta's domestic market share has grown rapidly to 16.4% in 2019,second only to Nike and Adidas.In addition,Anta's multi-brand strategy has an obvious effect,sending a positive signal to the capital market and enhancing its external financing capability.Last but not least,Anta's operating income has increased by 26.05%,44.95%and 40.78% from 2017 to 2019 respectively.In addition,its total asset size,the number of brands and the number of stores are all increasing continuously,which strengthens its development ability.(3)Risks exist in the implementation of Anta's multi-brand strategyWith the continuous promotion of the multi-brand strategy,Anta's brand matrix continues to expand,and its asset scale expands rapidly,which leads to the increase of asset-liability ratio,rising to 48.90% in 2019,and the decline of debt paying ability.In addition,Anta's operating efficiency,especially the inventory turnover efficiency,declined due to the new brand positioning of high-end products,longer product cycle than the general low-end products,and the newly completed acquisition of stores.The inventory turnover days from 2015 to 2019 increased from 57.1 to 86.0,an increase of50.6%.Finally,to buy new brand Anta's costs rise,such as financing cost,sales management costs and losses of the joint venture company,etc,and further lead to Anta's own product research and development investment proportion reduced,were 0.6%lower in 2019 than in 2017.Anta's external dependence increases,while its own development capacity is weakened.