Research On The Performance Of Guirenniao’s Strategic Transformation

Sneaker Clothing industry’s product homogeneity is high,the entry threshold is low,among which enterprises are facing very large pressure of survival.From 2010 to2014,the outbreak of inventory crisis prompted the industry to enter a downturn period.In order to improve the business situation,many enterprises began to explore the road of transformation.In this process,enterprises constantly try various strategies for the development of the industry has accumulated a lot of experience and lessons.This paper selects a typical case of strategic transformation of Guirenniao,and analyzes the problems in the process of strategic transformation of Guirenniao,resulting in its poor operation.Guirenniao is the first Sneaker Clothing enterprise listed in Shanghai Stock Exchange.It’s strategic transformation road is very bumpy.When the Sneaker Clothing industry is in a downturn,it chooses to implement diversification strategy,and then implements refocusing strategy due to the poor effect of diversification transformation.This paper focuses on the analysis of the motivation and performance of the two strategic transformation of diversification and refocusing.First of all,it analyzes the motivation of Guirenniao’s two strategic transformations: the external motivation of diversification strategy transformation is the loosening of relevant policies,and the internal motivation is mainly the integration of surplus resources.Driven by these two points,it disperses operational risks and seeks new performance growth points.Due to the poor effect of diversification strategy,Guirenniao implemented the strategy of refocusing.Secondly,from the perspectives of finance and market,it analyzes the impact of strategic transformation on the performance of Guirenniao: Under the diversification strategy,Guirenniao’s profitability,debt paying ability and growth ability have declined,and the market value of the enterprise has also declined to a certain extent.However,the operation in the refocusing stage was affected by the “sequela” of the diversification stage.Only “Guirenniao brand”had a slight increase in revenue,but its profitability did not improve,its debt paying ability continued to deteriorate,and its market value remained depressed.In the end,according to the analysis of motivation and performance,point out the problems existing in the process of strategic transformation and puts forward corresponding management suggestions.Based on the above analysis,suggestions for corporate strategic transformation are as follows: When implementing strategic transformation,enterprises should pay attention to the development of core competence and choose the strategic transformation plan matching with the financial competence of enterprises.