A Study About The Effect Of Diversification Strategy Combinations On Performance Of Listed Companies

At the beginning of the diversification development strategy emerged, it has beenhighly regarding by the theory and practice; there are more and more foreign scholarsstarting to do theory and empirical research on diversification strategy. Enterprisedriven by profit, diversification strategy as the inevitable choice in its developmentroad. In the1960s, diversification strategy reaches to a peak in the United States. Inthe1980s, when the diversification strategy introduced into the Chinese businesscircles, more and more enterprises begin to pay close attention to or try to put inpractice the diversification strategy, however, the study on the diversification strategyresearch still hasn't got unanimous conclusion.The paper systematically studies the diversification strategy from threedimensions: diversification development degree, diversification strategy types anddiversification development mode. Our study mainly focuses on such two sides: thefirst is the impact of combination of the diversification strategy types anddiversification development degree on enterprise performance; the second is theimpact of combination of the diversification strategy types and diversificationdevelopment mode on enterprise performance.Based on the manufacturing data from2006to2010, we have analyzed the abovetwo problems in theory and empirical research. The conclusion suggests that the higherthe diversification degree, the more poor the performance on the whole. For theenterprises which adopted related diversification strategy, the higher the level of thediversification development degree, the performance will be better. There isdiversification premium in it. And for the enterprises which adopted unrelateddiversification strategy, the higher the level of the diversification development degree,on the contrary, the performance is poorer which suggests there is diversification aggie.And internal development mode is more beneficial for the related diversificationstrategy enterprises to exert their advantages and to realize the strategy synergy. Andthe external development mode is better for the unrelated diversification strategyenterprises to avoid their disadvantages.