An Empirical Study On The Relationship Between Diversification Strategy And Corporate Financial Performance Based On Food Processing And Manufacturing Industry

Diversification strategy:A development strategy for the enterprise to operate more than two kinds of products or services of different economic uses. Ansoff, a famous American strategist, first proposed the concept of "diversification" in 1957. So far 60 years of time, the academic research on the diversification strategy has never stopped, the research method is constantly mature and consummate. But in reality, there are many differences in the outcome of the diversification strategy, some enterprises are in trouble because of diversification, and some enterprises become bigger and stronger. The situation of theory and reality have testified that diversification strategy should not be generalized, Specific analysis should be carried out in combination with the exception of each trade. The paper had an analysis of the development phase of China’s various industries and the level of attention of the industry, and decided to choose the food processing trade as the study object. The paper gather the data of 45 food processing and manufacturing enterprises in five years in the SSE and SZE, and conducted the empirical analysis using these data. The results display that the current diversification of the trade in general will cause the decline in the performance of enterprises. The results also prove that in the development of diversified business, if focus on the diversification of the vertical business--from the perspective of expanding the industrial chain, enterprises’ performance will be significantly increased. The ultimateness of this paper has tabled some proposals for the evolution of food processing and manufacturing enterprises in China.