Research On The Impact Of Diversification Strategy On The Performance Of Internet Enterprises

With the progress of science and technology and the development of society,the Internet industry is becoming a new engine of national economic growth and plays an important role in the development of the whole national economy and society.However,faced with the complex economic situation,many Internet enterprises choose diversification as an effective way to spread risks and expand the market.In actual operation,the successful implementation of diversification strategy helps to improve the performance of enterprises to a certain extent,while blindly following the trend of diversification strategy will react on the business performance of enterprises and cause significant losses to enterprises.How to make effective use of diversification,improve enterprise performance and provide new growth power for enterprise development is worth studying.Taking the diversification strategy of Xiaomi Group as an example,this paper analyzes and studies the impact of diversification on its business performance,and draws the corresponding diversification enlightenment.This paper firstly uses the literature research method to sort out the relevant literature at home and abroad,such as the definition of diversification,the motivation and the impact of diversification on performance,and expounds the theoretical basis used in this paper,including risk diversification theory,resource surplus theory,synergistic effect theory and market power theory.Secondly,in the part of case introduction,combined with the overview of the diversification of the Internet industry,the diversification process and diversification motivation of Xiaomi Group are introduced.Thirdly,the financial performance analysis method and non-financial performance analysis method are used to analyze the performance of Xiaomi Group enterprises,and the influence of diversification on performance is further analyzed and studied in combination with its business performance to reach a conclusion.Finally,the paper summarizes the performance of Xiaomi Group’s diversified operation and draws a conclusion.On this basis,combining with the characteristics of Internet enterprises,it can get inspiration on how to implement diversified strategy to promote business performance.The results of this paper show that Xiaomi Group’s business strategy of implementing relevant diversification around its core business and seizing market opportunities to implement non-relevant diversification has improved its business performance on the whole,which is mainly reflected in the following aspects: diversification reduces the risks brought by a single business and achieves risk diversification;Diversification makes effective use of superior resources and promotes coordinated development;Diversification expands the market,increases market share and achieves profitable growth.To a certain extent,this study provides some theoretical and practical references for the diversification strategy planning and implementation of Internet enterprises,and at the same time enriche some inspirations and ideas for future research in related fields.