| Diversification in emerging markets has been widely discussed in both academic and business circles for a long time,but the conditions in emerging markets are different from those in mature markets,what are the motivations for companies to diversify business,and how to choose specific industries to improve Performance is an issue worth exploring.This paper selects Shenzhen Transsion Holdings Co.,Ltd.as a research case.The company has placed all its business in emerging markets since its establishment.It has the nature of traditional manufacturing industry and the characteristics of emerging Internet industry.Through the diversification of its overseas business,the motivation and implementation path are analyzed,and the successful experience and failure lessons of its diversification are summarized,which can provide certain reference and reference value for other enterprises that go to emerging markets to carry out diversified business.As a mobile phone manufacturing and software development company,Transsion Holdings has been established for less than 20 years.Since its development,its business has expanded to most of Africa and Asia such as India and Bangladesh.Its products cover feature phones,smart phones,mobile phone accessories,and household appliances.Internet software and after-sales service,etc.,the success of this diversified business model is still controversial.Some people believe that Transsion Holdings has used its existing advantageous resources to open channels for its diversified businesses,so that the mobile phone business and the diversified businesses have formed a synergy effect,thereby further consolidating its leading position in emerging markets.Some people also believe that Transsion Holdings’ diversified business only accounts for less than 5%of the company’s overall operating income.In terms of revenue and profit.Transsion Holdings’ diversified business development is not as expected.Since Transsion Holdings was listed on the domestic science and technology innovation board in 2019,its operation in emerging markets has attracted widespread attention from all walks of life.Whether the "King of Africa" can open up another advantageous track in diversified business is worth exploring.This paper sorts out the previous literature on the definition of emerging markets,diversification strategy.diversification motivation,and performance performance,using triangulation method,through the content coding analysis of detailed interview materials and documents,and analyzes Transsion Holdings in emerging markets.Analyze the market’s diversification motivations,industry choices,and operating models,and verify the impact of diversification on Transsion Holdings through performance.The research found that Transsion Holdings’ diversification process is mainly divided into three stages:in the embryonic stage,the mobile phone business was developed into three brands,covering as many consumers of all classes in emerging markets as possible,forming a multi-brand pattern;in the growth stage,the main Production and manufacture of peripheral products and services that are strongly related to the mobile phone business or have similar supply channels;the integration stage is to use the development trend of the Internet to develop software diversification,horizontal and vertical double diversification to create an ecological closed loop,and basically built a "Pan-African ecosphere".From the perspective of motivation,the diversified operation of Transsion Holdings mainly considers its own main business advantages and resource advantages,and at the same time takes into account the optimization of asset portfolios to reduce operating risks and generate synergies;from the perspective of industry selection,Transsion Holdings mainly Taking into account industry relevance and industry attributes,we will focus on infrastructure-based and high-traffic industries;from the perspective of operation mode,the business model of "pay before delivery" keeps Transsion Holdings’ cash flow in a healthy state,and the inventory of goods is relatively healthy.Occupying less current assets,more funds can be invested in the research and development of new businesses,while human resources are regarded as an important strategic resource;from the perspective of financial performance,diversified operations have enhanced the profitability of Transsion Holdings,and social Public welfare undertakings shorten the cultural distance between countries,and consumers are more sticky.When the infrastructure and Internet construction in emerging markets are more complete,the home appliance and other industries that are deployed in advance will increase the growth ability of enterprises.This paper also discovers the relationship between the above four perspectives.According to the path and performance of Transsion Holdings in emerging markets,it proposes a transmission model of "Enterprise diversification motivation→ Diversification industry selection and business model→ Enterprise diversification performance". |
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