Diversification Strategy Of Enterprises Of Different Sizes And Business Performance Relationship

The relationship between diversification strategy and performance is one of the most important research topics in the field of strategy management. This paper mainly deals with the relationship between diversification strategy and performance. Firstly, the feature of diversification of different scale enterprises is discussed, based on which the relationship between diversification extent and performance is approached to explore the impact pattern of diversification extent on performance, and the relationship between diversification relatedness and performance to explore the impact pattern of diversification relatedness on performance, and the relationship between diversification type and performance. In all, I hope to find the relationship between diversification strategy and performance through this research.This paper empirically analyses the relationship between diversification strategy and performance, and then supports the empirical results by case study. The research conclusion is drawn based on the comparison of the results of empirical analysis and case study. The new findings of this paper:1. The increase of diversification extent will do harm to the profitability of small and medium enterprises (SME ) , but has no effect on the profitability of large-scale enterprise (LSE) . Meanwhile, the increase of diversification extent will benefit sales growth no matter for SME or LSE.2. For SME, there is no prominent relationship between diversification relatedness and performance. But for LSE, the increase of diversification relatedness will benefit its profitability, but do harm to its sales growth.3. The diversification type has no prominent effect on profitability no matter for SME or LSE , but on the sales growth, there is some empirical difference between some diversification types , especially between unrelated diversification strategy and main product strategy.The new findings of this paper will provide practical suggestions for the decision of diversification strategy of different scale enterprises. An enterprise can choose a proper diversification strategy according to its situation.