| Throughout the years,the academic and business communities have conducted in-depth discussions on diversification,and companies want to leverage the development of the Internet to help them achieve value creation and gain new competitive advantages.In fact,when enterprises enter a mature stage of development,they face problems such as inadequate management structures or work efficiency,which have a negative impact on the development of the enterprise.Some enterprises have achieved rapid development through diversified operations,while others have gradually declined after implementing diversification.Therefore,it is worth exploring how enterprises choose diversified business methods and what are the reasons for moving towards a path of diversification.In just eight years from its establishment to its listing,Xiaomi Company has transformed from a smartphone enterprise mainly focused on research and development and sales to an emerging internet enterprise with the largest intelligent ecosystem system.Its diversified success path has attracted widespread attention.This paper comprehensively uses the literature research method,case analysis method and comparative analysis method,and combines the risk dispersion theory,resource allocation theory,synergy theory and market power theory to study the motivation and performance of Xiaomi Company’s diversification.Firstly,summarize and sort out literature on diversification,define the concepts related to diversification,and lay the groundwork for the subsequent discussion.Secondly,this paper discusses the performance of Xiaomi Company’s diversification from three aspects: the process,degree,and characteristics of diversification,and analyzes the motivation for diversification based on relevant theories.Then,by analyzing the financial data of Xiaomi Company before and after its diversified operation,the performance of its diversified operation is comprehensively evaluated from financial perspectives such as profitability,operational ability,debt repayment ability,development ability,as well as non-financial perspectives.Finally,summarize the economic consequences and inspirations of diversified operations of Xiaomi Company,in order to provide certain reference significance for similar enterprises.Research has found that,firstly,Xiaomi Company’s overall performance has been improved after diversified operations,but its operational capabilities have not performed well.Secondly,Xiaomi’s diversified operations have increased product shipments and expanded its overseas market share.Thirdly,Xiaomi’s various businesses have played a synergistic role.Fourthly,light asset operation is an important way for Xiaomi Company to implement diversification.Finally,several inspirations are drawn that enterprises should stabilize their core competitiveness in the process of diversified operations,drive the development of other businesses around core businesses,reasonably reduce transaction costs,and establish risk response mechanisms. |
