The Empirical Research On Relationship Between Diversification Strategy And Performance Of IT Listed Companies

What strategy a company should choose has always been the focus in both theory and practice. From last century, the western scholars started the research and practice on this issue, and a certain extent, had set up the theoretical basic. In China, our scholars started the research on the diversification in 1980's. Due to the western market are different from Chinese, and the difference between the research methods, the result is different. As a new business area, IT business has its special characteristic. If the research result which is based on the whole China market is suit to IT firm? This dissertation is based on this research status and the studying on both domestic and overseas research. Associating with the China IT firm status, will research these problems: the IT listed companies which are considered as the new composition of economics development should exercise what kind of development strategy to achieve good performance; what influences the recent diversification strategy have on the performance; what the relationship between strategy and performance. First of all, the research will define the relative conception. Second, summarize and analyze the former research fruits according to the relationship between the degree of diversification and performance. In the Chapter 4, we will simply introduce the theory gist of diversification, the measure of diversification degree, and the categorizing method of diversification types, grounding the academic base for empirical research. During the demonstration research, We screen out the financial data of 62 IT companies which listed in Shanghai and Shenzhen stock markets, and then use the methods of variance analysis to compare the commonness and differences of rules and characters of financial performance of IT listed companies which have different diversification degree.We found out that: the degree of diversification has a plus correlation with financial performance in China IT listed companies, i.e. the performance of IT diversification companies is better than that of IT single business companies which have correlative businesses have a little better performance than companies which have no correlative businesses. This result is mainly due to the IT firm's special character. IT firm's production and development is based on the electronic technology, which is widely used in more and more business areas. This is the reason, when IT firm put in another business, it will cost less and profit more than others.The last, we will point out the limitation and the future direction of this research, and also put forward some proposals for China IT listed companies: developing the main business according to companies' core competitive advantages, selecting development strategy combined with low-degree according to companies' facts and industry characters.