Research On The Financial Performance Of Midea Group’s Diversified Operation

With the popularity of the Internet and artificial intelligence,the traditional manufacturing industry is facing opportunities and challenges.As a leading enterprise in the household appliance industry,Midea Group has been laying out diversified development strategies since the beginning of the 21 st century,from the diversification of related products to the diversification of non related fields,and then to the integrated layout of the vertical industrial chain.During this period,Midea Group has been constantly transforming and implementing the strategies of "double intelligence" and "industrial Internet".In the process of diversified operation,Midea Group has stepped from the field of household appliances to the fields of logistics,robot automation,digital innovation business and so on.During this period,Midea Group has developed from a traditional household appliance enterprise to a science and technology enterprise.With the changes of political,economic and cultural environment,Midea Group is also facing opportunities and challenges in its diversified operation.In view of this,the research on the financial performance of Midea Group’s diversification has its practical significance.Firstly,it combs the relevant literature of domestic and foreign scholars on the impact of financial diversification on the performance of the group.Then,this thesis analyzes the diversification process,background and reasons of Midea Group,and measures its degree of diversification by using hefendal index and entropy index method.Secondly,by collecting the data of Midea Group from 2012 to 2020,this thesis analyzes its diversified financial performance by using the operation,debt repayment,profitability and growth ability of financial indicators,and evaluates its financial performance by using factor analysis method.Then use non-financial indicators for supplementary analysis to evaluate the diversified operation of Midea Group from three aspects: enterprise value,market share and brand value.Finally,it is found that the diversification of Midea Group has a positive effect on financial performance,improves the level of inventory management and improves the profitability to a certain extent.In terms of non-financial indicators,Midea Group’s diversified operation has improved the enterprise value,market share and brand value.However,there will be some problems in the diversified operation of Midea Group.The management level of accounts receivable and long-term solvency need to be improved;The profitability of robot division still needs to be improved;Midea Group’s profitability and cost control ability in the home appliance industry are not as good as Gree Electric Appliance,and its profitability needs to continue to be improved.In view of the above conclusions,this thesis puts forward relevant suggestions for Midea Group and other enterprises.For Midea Group,it is necessary to integrate the business segments of robots and automation systems,continue to optimize resource allocation,strengthen the integration of internal resources,improve resource utilization,and then continue to improve cost management and profitability.In addition,Midea Group also needs to set up a reasonable debt structure and formulate appropriate credit policies.For other enterprises,before entering other fields,enterprises must first understand their own development status,clarify future goals,select appropriate new business areas,and continuously integrate resources in the process of diversified operation,so as to promote the coordinated development of various business units and improve the financial performance of enterprises.