The Research On Diversification And Company Performance In Special Chemistry Industry

Under the current economic circumstance called new normal,to comply with the government policy and seize the opportunity,a lot of companies in special chemical industry plan to make use of existing resources to develop diversification due to the inherent feature of industry,which is aimed to build the integration of industrial or march towards the high-end manufacturing,consequently achieving upgrading of the company.However,not every diversification result in improvement of company performance.This essay is to do research on relationship between diversification and company performance by case study,during which to summarize key factors in diversification to success in promoting company performance and to offer suggestions about how to implement the diversification.Firstly,define the conception of diversification and briefly introduce the relationship between diversification and company performance by untangling the classical theory and articles.Secondly,analyze the motive and effect of diversification in special chemical industry by descriptive statistics.Though the compassion with specialized operation,summarize the general result of diversification by combining dynamic observation with static investigation.Finally,guided by classical theory,analyze the impact on company performance by case study and focus on what the case company do to make diversification play a positive role in company performance.According to the study,the following conclusions are drawn in this paper:(1)When it comes to diversification in special chemistry industry,companies which are in good operating conditions prefers related diversification,but ones which are not so well-being tend to do unrelated diversification.(2)During dynamic observation,there’re clear negative effects on the assets in special chemical industry when conducting diversification.Meanwhile,diversification promotes profitability,but after the next year,gap in profit between companies will get widen,which indicates that the impact will be changed due to company’s own situation.(3)In 2018,diversifying plays a negative role in company performance.(4)Case study shows that diversification can improve company performance.The key point are the main core development,industry choice,adjustments and the match between liabilities and operating conditions.(5)Case study also shows that related choice is the better choice because of the significant role which the main core plays in scope and depth of diversification.