Research On Implementing Motivation And Economic Consequences Of HNA Group Diversification Strategy

With the rapid development of market economy,the competition among enterprises is fierce.When the main business development meets the bottleneck,in order to achieve stable and efficient development,enterprises will adopt the diversification strategy.The practice of domestic and foreign enterprises has proved that most enterprises carry out diversification strategy to promote the increase of operating profit,or form synergy effect between the upper and lower industry chain business plates,and improve the efficiency of resource utilization.Economic development is accelerating,but the capital market is not perfect.In the process of diversification,enterprises may increase their financial risk due to the long capital chain and too scattered business,and even appear the possibility of bankruptcy.This paper focuses on the typical case of HNA Group’s implementation of diversification strategy from glory to decline.Starting from the motivation,it focuses on the analysis of the scale expansion brought by the development of HNA’s diversification strategy,why it does not bring the enhancement of enterprise performance;it deeply analyzes the deep reasons for the final bankruptcy and reorganization of HNA Group,explores the economic consequences brought by the enterprise’s implementation of diversification,and explores how to improve the enterprise performance Layout can realize the value of diversification.Firstly,this paper combs the relevant literature of domestic and foreign scholars on the motivation and impact of diversification strategy,expounds the market power theory,resource-based theory,scope economy theory and financial performance evaluation theory that this research relies on,and combs the diversification development process of HNA Group and the structure of group corporate governance level,starting from the motivation of HNA Group’s diversification strategy To analyze the economic consequences of HNA Group’s implementation of diversification strategy,and to explore how the layout of diversification strategy can realize enterprise value;in the case analysis,the economic consequences of HNA Group are analyzed by using the event study method,financial analysis method and internal synergy effect;the reasons for the failure of HNA Group’s diversification strategy are evaluated and summarized,and then how to reasonably implement diversification strategy is obtained The conclusion of this paper is as follows.Finally,based on the previous research and theory,this paper puts forward some suggestions for the follow-up development of HNA Group and other diversified enterprises.The conclusion is: the fundamental reason for the failure of HNA Group’s diversification strategy lies in the chaos of its corporate governance structure,the internal loss caused by the struggle of major shareholders,the blind expansion of the actual controller artificially expanding the enterprise scale,and the improper unrelated diversification leading to the bankruptcy and reorganization of the group.To give full play to the maximum value of diversification strategy,enterprises should rationally treat diversification and pay attention to performance;pay attention to the layout of diversified industries and promote structural adjustment;prudently implement unrelated diversification to enhance internal synergy;improve corporate governance mechanism to reduce internal losses.After the bankruptcy and reorganization of HNA Group,it should return to the main business of aviation,cultivate its core competitiveness,and improve its internal governance mechanism.To implement the diversification strategy,other enterprises should optimize the profit model,moderate diversification,increase the construction of risk control,prevent excessive leverage financing,and pay attention to and improve the management system.