Study On The Impact Of Diversification Strategy Implementation On The Performance Of Cloud Live Technology Group Co.,Ltd.

With the rapid development of the market environment,the business model of enterprises has changed.In this situation,more and more Chinese companies are looking for further growth and expansion opportunities,and from a single business to diversification strategy.Some companies benefit from the diversification strategy,while others get into financial trouble because the diversification strategy does not meet their expectations.The aim of diversification strategy is to disperse risks and find new revenue growth points,but the reality is unexpected and makes the company in trouble.This paper selects "Cloud Live Technology Group Co.,Ltd."(hereinafter referred to as "CLTG"),which was founded in 1999 in the capital of China,as the main business of the company is catering industry,with the main business in medium and high-end catering market and the core customers as high-end businessmen and dignitaries.With the introduction of the eight regulations,the original prosperity of the catering industry in China has been impacted,due to a variety of pressures,the company decided to implement diversified strategic transformation,but the transformation process is quite tortuous,and can be said to have repeatedly failed.Therefore,this paper chooses the case of CLTG diversification strategy transformation failure to study the impact of its implementation of diversification strategy on corporate performance.Based on synergistic effect theory,principal-agent theory,risk dispersion theory and information asymmetry theory,this paper analyzes the influence path of diversification strategy on enterprise performance.The diversification development process of CLTG is reviewed,the diversification degree of enterprises is measured by the business unit number method over the years,and the internal and external motivations for the implementation of diversification strategy are analyzed.Through horizontal and vertical comparison,the paper analyzes the influence of diversification strategy on the financial and non-financial performance of CLTG.The reason for the failure of the diversification strategy of CLTG is revealed.Put forward targeted policy suggestions to the failure of diversification strategy of CLTG.The suggestions in this paper include two parts: first,before implementing diversification strategy,enterprises should control the timing and path of enterprise diversification and strengthen investment risk management;Second,in the implementation of the diversification strategy,enterprises should improve the corporate governance structure and financial risk system,absorb and cultivate the diversification strategy field team.It is hoped that the results of this study can be used for reference to the enterprises that are going to implement diversification strategy and choose a suitable diversification strategy.