Advances in Economics, Management and Political Sciences
- The Open Access Proceedings Series for Conferences
Proceedings of the 2nd International Conference on Financial Technology and Business Analysis
Series Vol. 97 , 02 July 2024
Open
Access | Article
The Relationship Between Diversification Strategies and Corporate Financial Performance: Taking Gree Group as an Example
* Author to whom correspondence should be addressed.
Abstract
Diversification strategy is a common and important method for enterprises to expand business scope, effectively use resources, and improve economic benefits. However, not all companies that have adopted a diversified strategy will be successful. There are still some controversies about the relationship between diversification strategy and firm performance. Based on summarizing the diversification theory, this paper evaluates the performance of Gree Group under the diversification strategy through financial indicators, Tobin's Q value, and share of revenue. We draw a conclusion that Gree's current diversification strategy is not suitable for the future development of the enterprise and provide suggestions about the adjustment of Gree’s diversification strategy.
Keywords
Diversification Strategy, Tobin’s Q, Financial Indicators Analysis
References
1. Ansoff, H.I. (1957) Diversification Strategy. Harvard Business Review
2. Weston, J.F. and ManSinghka, S.K. (1971) Tests of the Efficiency Performance of Conglomerate Firms. Journal of Finance, 34, 919-936.
3. Zhou, Q., Xie, S.-L. and Liu, F. (2014) Organizational Structure and Firm Performance of Diversified Firms—Based on Research in Sichuan and Chongqing. Journal of Chongqing Jiaotong University (Social Science Edition), No. 5, 51-54.
4. Comment, R. and Jarrel, G. (1995) Corporate Focus and Stock Returns. Journal of Financial Economics, 37, 67-87.
5. Zhou Shancheng(2006) Specialization Strategy and Diversification Strategy Choice Analysis Engineering Science and Technology II series; Economics and management science Enterprise economy; Sichuan Water Conservancy,2006.05
6. Gort, M. (1962) Diversification and Integration in American. Princeton University Press, Princeton, New Jersey.
7. Markides, C. C.(1995)Diversification, Restructuring and Economic Performance. Strategic Management Journal, 16, 101-118.
8. Jiang Fan(2023)Research on diversification Strategy based on financial Performance analysis -taking Yunnan Baiyao Group as an example Economy and Management Science Industrial Economy; Economics and Management Science Accounting; Rental and Sales Intelligence,2023.06 issue
9. Lang, I.H., Stulz, R.M. and Tobin, Q. (1994) Corporate Diversification and Firm Performance. Journal of Political Economy, 102, 1248-1280.
Data Availability
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License. Authors who publish this series agree to the following terms:
1. Authors retain copyright and grant the series right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this series.
2. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the series's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this series.
3. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See Open Access Instruction).
- Volume Title
- Proceedings of the 2nd International Conference on Financial Technology and Business Analysis
- ISBN (Print)
- 978-1-83558-505-4
- ISBN (Online)
- 978-1-83558-506-1
- Published Date
- 02 July 2024
- Series
- Advances in Economics, Management and Political Sciences
- ISSN (Print)
- 2754-1169
- ISSN (Online)
- 2754-1177
- DOI
- 10.54254/2754-1169/97/20231613
- Copyright
- 02 July 2024
- Open Access
- This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited