A Study on Two Stage Diversification Strategies and Business Performance：A Case of "A Group"

• Main Authors: Hsien-ta Chan, 詹賢達
• Other Authors: Mei-ya Wang
• Format: Others
• Language: zh-TW
• Published: 2011
• Online Access: http://ndltd.ncl.edu.tw/handle/66019884647573061465

碩士 === 世新大學 === 企業管理研究所(含碩專班) === 99 === Abstract As the environment changes, firms often select diversification strategies to pursuit the overall growth, for example, to extend the depth and width of its product lines based on the internal advantages, integrating vertically or horizontally, or even entering a whole new industry. It shows that diversification strategies play important roles in the sustainability of firms. This study chose a group company as a case, who ever branched out into three industries “manufacturing, 3C retailers, tourism ", in order to discuss the relationship between diversification strategies and business performance. The research questions of this study are as follows: 1. How do different diversification strategies of “A Group” impact on its business performance? 2. How do industry characteristics that “A Group” has entered impact its business performance? This study adopts case study method. The data were collected through in-depth interview, documentary files, direct observation and so on. The conclusions and suggestions include the following key points. 1. The first-stage diversification strategy could be categorized as “vertically related diversification”, which means higher complementariness between two diversified businesses, therefore it leaded to the better business performance. 2. The second-stage diversification strategy could be categorized as “horizontally related diversification”, which means lower complementariness between two diversified businesses, therefore it leaded to the worse business performance. 3. While a firm decides to makes use of its slack resources to diversified, they should consider whether the resources are critical for new business/industry, which might be important to make it a success. 4. While a firm decides to diversified, it should consider the synergy between two businesses. Highly related diversification strategy has usually better business performance than the lowly related, and the highly complementary is better than the lowly complementary. 5. After diversification, the firms should try to increase the synergies between the two businesses through all the creative means, for example, to separate two business into different business units or independent entities, so that each firm can concentrate on its own business.