Business Diversification Strategy Research Articles

Virtual Cloud Computing Lab: A Way for MSMEs in Increasing Firm Performance

This research aims to develop a business diversification strategy through a virtual cloud computing lab to reduce the risk of bankruptcy of SMEs. The method used in this research is mixed research in collaboration with quantitative and qualitative approaches to develop products and find out how much people accept the products developed. To see the acceptance of the developed website, the researcher used the technology acceptance model (TAM model). After forming a good model, a partial test (t-test) is carried out for decision-making. Based on the findings of data analysis, it was found that existing micro, small, and medium enterprises (MSMEs) lacked information and media to assist them in diversifying their business. Based on these needs, a website for MSMEs has been developed that has been validated and obtained results in the "good" category. Researchers conducted tests for the acceptance of websites developed with structural perceived usefulness, perceived ease of use, intention to use, and actual use with results showing the "good" category. From these results, it can be concluded that the website developed has a good reception in supporting MSMEs to reduce the risk of bankruptcy.

Assistance in Fattening Goat Farming Business: Diversification Strategy and Productivity Improvement "Gus Shor Farm" Kanugrahan Maduran Lamongan Village

The development of Goat Farm Fattening Business "Gus Shor Farm" in Kanugrahan Village, Maduran, Lamongan is a strategic effort in increasing the productivity and sustainability of goat farming business. In this context, diversification strategies and productivity improvement are the main focus. The study aims to analyze local market potential, identify business diversification strategies, and design measures to increase goat farm productivity. Research methods used include field surveys, stakeholder interviews, and data analysis. The results showed that the demand for goat meat in the local market continues to increase, providing a great opportunity for "Gus Shor Farm" to develop a goat fattening business. Business diversification strategies include the development of processed goat products such as sausages, jerky, and goat cheese, which can increase the added value and attractiveness of products. In addition, productivity improvement is carried out through the application of technology and efficient management practices, including the use of high-quality feed, good livestock health management, and selection of superior goat breeds. By implementing this strategy, "Gus Shor Farm" can increase income, reduce financial risk, and contribute to economic and social development in Kanugrahan Village, Maduran, Lamongan.

Fintech mergers and acquisitions

Fintech firms have emerged as popular targets for mergers and acquisitions (M&A) in response to the remarkable growth of the fintech industry. However, different acquirers assess the benefits of these deals differently, and the actual benefits realized may diverge from the expected synergies. This study scrutinizes the value of fintech M&As for three types of acquirers: U.S. public banks, nonbank financial institutions, and tech companies. The short-term market reaction to fintech M&As is negative for acquiring banks and insignificant for nonbank financial institutions and tech companies, which is not explained by deal-level or acquirer-level characteristics. Moreover, using a matched sample, we find limited evidence suggesting that fintech M&As contribute to improvements in acquirers’ subsequent operating performance, innovation, or business diversification strategy. Overall, the evidence suggests that fintech acquirers, particularly acquiring banks, may potentially overestimate the benefits of such deals. Our study calls for improved guidelines to ensure more informed decision-making in fintech M&As.

Exploring killer domains to create new value: A comparative case study of Canadian and Korean telcos

Diversifying business portfolios and creating new value has been considered essential strategy for telecommunications companies (telcos) to survive and grow. To successfully execute this strategy, telcos need to find and focus on promising industries, called killer domains. However, few studies have tried to develop criteria for identifying killer domains for telcos' business diversification. This study develops comprehensive evaluation criteria and explores killer domains for Canadian and Korean telcos. This study adopted the analytic hierarchy process (AHP) method and surveyed 23 telecommunication experts in Canada and 22 in Korea. Data analysis found that expected benefit is the most important criterion in decision-making for a telco's business diversification, followed by resource fit and the expected cost. There were no significant differences in the relative importance of alternative domains in Korea, but in Canada, digital healthcare was the most crucial domain for Canadian telcos, followed by the security and immersive content industry. The result of this study provides implications for practitioners' and policymakers' decision-making regarding business diversification strategies in the telecommunication industry.

Diversification Strategy and Business Portfolio Development in State-Owned Companies PT. Hutama Karya

This research aims to analyse the business diversification strategy of PT Hutama Karya (Persero) and its subsidiaries, explain their business operations, and explore growth potential. This research tries to identify the company's internal and external environmental factors after business diversification, conduct an analysis of the corporate position and portfolio of business units and subsidiaries, and formulate a new business diversification strategy concept. This research method is descriptive qualitative with the data used in the research including primary data collected through interviews and questionnaires, as well as secondary data such as company financial reports, industry performance reports, and industry attractiveness. PT Hutama Karya's business diversification includes expansion into various business divisions, including Toll Road Business Entity (BUJT), Non-Toll Road Business Entity (Non-BUJT), and the establishment of subsidiaries such as Hutama Karya Infrastruktur (HKI), HAKAAston, HK Realtindo, Hutama Marga Waskita (HAMAWAS), and EPC Energy Singapore Ltd. The main supporting factors for this diversification are the continued economic growth and government support in infrastructure development. The company's internal strengths are the application of technology and adaptation to changes in the construction industry, they also face challenges such as cashflow issues, global economic uncertainty, and changes in political direction. The SWOT analysis shows that the company is in the "Grow and Build" quadrant and needs to pursue aggressive business diversification. The results of the GE Nine Cell Matrix analysis show a diverse position for the company's business units, with some as "Leaders" and others needing to be managed carefully or even divested. The managerial implications of this study are the need for business ecosystem development and business portfolio diversification, technology development across businesses to support competitive advantage, and the creation of new opportunities after the completion of the Trans-Sumatra Toll Road project

Diversification and financialization of non-financial corporations: Evidence from China

This paper examines whether and how business diversification affects financialization in non-financial corporations. Using data from the Chinese market, we find that business diversification strategy will significantly increase non-financial corporations' investment in financial assets. Furthermore, exacerbated agency problems, increased investment inefficiency and high operational risk are found to be the consequences of business diversification, which induce companies to hold high-risk financial assets. The impact of business diversification on financial investment is stronger in small-cap firms, SOEs, and firms with weak monitoring mechanisms. Finally, the diversification effect on corporate financialization is more significant where regional economic development and regulatory environment is weak.

인수합병 거래 데이터를 활용한 헬스케어 기술기회탐색

Global economic uncertainty, low growth and business complexity have put firms at risk of survival. Enterprises pursue sustainable growth and innovation through strategic technology management, but they are suffering from a lack of information on TOD(technology opportunity discovery) and the absence of diversification strategy for new business. It is necessary to conduct a TOD to find promising industry and technology that are conditions for future companies. In addition, TOD of healthcare technologies using M&A(mergers and acquisitions) transactions data have not been reported yet. Therefore, this study proposes a new methodology for exploring technological opportunities using M&A transactions data in healthcare industry. First, we theoretically confirm whether all M&A transactions are related to promising areas. Second, we analyze the global M&A trends by a time series analysis of M&A transactions by sectors over the last 20 years. Third, the association analysis was conducted using the number of M&A transactions between sectors, industries, and healthcare technologies to determine the degree of M&As connection. As a result, the overall trends of promising industry and healthcare technology could be identified. Also, It is expected that it will be used effectively to establish sustainable management strategy, business diversification strategy and technology strategy (research and development portfolio strategy, technology road map) in the future through the exploration of technology opportunity using the M&A transactions data.

Trademark-based framework to uncover business diversification opportunities: Application of deep link prediction and competitive intelligence analysis

Our framework aims to support the business diversification of firms. In a dynamic business environment, tracing business trends and uncovering business diversifiable opportunities are crucial and difficult tasks for commercial firms. Although the identification of the firms’ opportunities has been attempted in several prior studies, most of them focused on opportunities from a technological perspective but not the business (or market). Particularly, these technology opportunity approaches have a fundamental limitation in that they are unable to apply service business which is hard to patent. Therefore, a trademark-based framework to uncover business opportunities using deep link prediction and competitive intelligence analysis is proposed in this study. The overall procedure of the proposed framework is as follows: 1) constructing a deep link prediction model using co-occurrences of designated goods and services of trademarks, 2) discovering diversifiable businesses, and 3) establishing business diversification strategies using competitive intelligence. Regardless of the type of business, the deep link prediction model learns business dynamics and identifies diversifiable businesses for the target firm. In particular, the proposed framework has the advantage that it can support the establishment of a business diversification strategy using competitive intelligence analysis. We expect that the proposed framework will contribute a systematic approach to identifying business opportunities based on objective data and will be used as a monitoring tool for entire business trends.

Effect of Business Diversification on Financial Performance with Business Risk as an Intervening Variable in Manufacturing Companies for the 2014-2018 Period

Based on Schumpeter's theory of economic growth regarding innovation that causes the economy to develop, this study examines the effect of business diversification on financial performance mediated by business risk. The sample used is manufacturing companies that carry out business diversification strategies during the 2014-2018 period on the IDX, amounting to 33 companies, with purposing sampling technique. The method of analysis in this study is experimental, which uses Size and Laverage as control variables. Data analysis in this study uses Path Analysis to see the direct or indirect effect of business diversification on financial performance mediated by business risk. The results of the analysis prove that business diversification has a positive and significant effect on financial performance, and business diversification has a positive and significant effect on business risk. However, business risk is unable to mediate the effect of business diversification on financial performance.

9‐4: Applying FPD panel and manufacturing technologies to high growth segments, alternative applications, and new business models

This study analyzes how the FPD supply chain complanies can apply their proprietary technologies to high growth segments, alternative applications, and new business models. It uses examples of x‐ray sensors, LC antennas, and fan out panel level packaging to demonstrate business diversification strategies as the FPD industry undergoes unprecedented techonology and market changes.

FORMULASI STRATEGI KORPORASI DALAM KETIDAKPASTIAN MASA DEPAN PASCA COVID-19

The Covid-19 virus which has swept the world and become a global pademic has changed the world order. The reduced social economic activities of the community to reduce social interaction that can accelerate the spread of the virus, resulting in a decline in the performance of economic sectors. Many industries experience a decline in revenue and can result in further cessation of company operations. Pademi Covid-19 to date has not been able to predict how long it will end which causes uncertainty about the future. In order for a company to continue to exist and grow sustainably, it is very important to formulate a future strategy that is full of uncertainty. In this article, we review strategies options that can be applied to various levels of uncertainty. In the future uncertainty, the leadership of the company is demanded to be more courageous in making strategic decisions. From a variety of alternative strategy choices, in order to deal with the difficult conditions at the moment, the initial theory regarding investment management can be considered in the form of a business diversification strategy. So that the risks experienced can be spread in various fields of business / industry not only in one business, as the theory of the father of investment management Herry Markowizt "don't put all your eggs in one basket".

Arts Organization’s Business Diversification Strategies: Case of Sanwoollim Theater Company

Arts Organization’s Business Diversification Strategies: Case of Sanwoollim Theater Company

Does Corporate Diversification Induce Financing Choice?

This paper sets out to examine the effect of business diversification strategy on capital structure in Malaysia. The study segregates the firms into related and unrelated firms based on segmentation of Standard Industry Classification Code. It involes 76 public listed firms in Bursa Malaysia from 1994 to 2012. This research uses static panel data to determine the credible association between diversification strategy and choice of financing. The authors find that period fixed effect with seemingly unrelated regression produce better results to explain the relationship between independent and dependent variables. The results demonstrate that there is insignificant relationship between diversification strategy and capital structure. Robustness check on pre and post crisis data generate similar output. The potential contribution of this work lies in offering empirical evidence to test the previous held assumption that there is a significant relationship between corporate expansion and financing decision done by firms. Future research should explore the possibility by using international firms to investigate the association between those variables.

Corporate International Diversification and Corporate Social Responsibility: Evidence from Korean Firms

In the process of their market globalization efforts in Korea, they have been positively utilizing corporateinternational diversification strategies to increase sales in overseas markets or reduce risks based on businessdiversification strategies. However there is mixed empirical results have been made on whether the corporateinternational diversification strategy made a positive or negative impact to the firm value. Extending Priorliteratures, this study investigates the impacts of the level of corporate international diversification of Koreanfirms onto that of their corporate social responsibility activities.Empirical result suggest that there is negative (-) association between the level of corporate internationaldiversification and corporate social responsibility activities. In particular, this study is meaningful indemonstrating an empirical result that, even if the Korean firms pushed forward corporate internationaldiversification strategies actively due to the stagnant domestic market in the 2000s, they actually reducedcorporate social responsibility activities more greatly as they were recognized as the short-term expenses.

Diversification Strategy through Market Creation

The purpose of this paper is to investigate upon a diversification strategy through market creation of CJ Group, which has contributed in positioning of the firm as one of the leading conglomerates in South Korea. With such objective, the background of CJ Group, followed by its business diversification strategies were explored, with reference to several case studies. The history of CJ Group began with establishment of CheilJedang Industrial Corporation in 1953, as the first domestic sugar producer and exporter of South Korea. The corporation gradually expanded its business ever since at both national and global level, to include the fields of food production, pharmaceutical, biotechnology, and life chemicals. Later, CheilJedang (CJ) Group was established as an affiliate of CheilJedang Industrial Corporation. With such independence, extension of business has been witnessed across the industries of media, entertainment, finance, information technology and distribution. Thus, the current CJ Group pursues to define itself as a progressive global living culture company with four major business categories from food and food service, biotechnology, entertainment and media, and logistics. Despite its success in today`s market, CJ Group underwent hardships in its business diversification in 1990s due to indiscreet management, along with the Asian financial crisis. Here, many firms overcame the financial difficulties by taking advantage of the exchange rate for overseas expansion. Though, CJ Group tried to differentiate itself by focusing on the domestic market by creating something out of nothing. Hence, CJ Group takes a unique position among many cases of business diversification and their categorization. In an effort to identify and classify the types of growth experienced by the top 30 companies in South Korea, the firms were categorized into four groups according to their diversification strategies adapted after the Asian financial crisis. Based on the mode and time of entry, corporations were identified either as the ‘Explorer’, ‘Invader’, ‘Venture Capitalist’, or ‘Assimilator’. Here, the majority of the firms showed the qualities of Invader, entering mature markets through large-scaled mergers and acquisitions. However, CJ Group was the only firm that was categorized as an Explorer, for its focus on the newly emerging service sector in culture-contents industry. This diversification strategy through market creation is worth examining, due to its contribution in generating simultaneous growth between the market and the company itself. Diverse brands of CJ Group have been referred to as case studies in this regard, from ‘Hatban’, ‘Cine de Chef’, ‘VIPS’ to ‘CJ GLS’. These four businesses, each to represent processed food, film, restaurant service, and logistics industries respectively, show CJ Group`s effectiveness in creating a whole new category of goods and services that are innovative. In fact, such businesses not only contributed in advancement of consumers` wellbeing, but toward generating additional value and employment. It is true that the diversification strategy of CJ Group requires long-term capital investment with high risk, compared to the other strategies mentioned in the paper. However, this model does create high employment and additional values that are positive to both the society and the firm itself. Therefore, the paper comes to a conclusion that the diversification strategy through market creation conveys the most positive impact relative to the others.

Improving of Small Farm Market Capability in Latvia

The aim of the paper is to analyze the possibilities to improve the market capability of small farms in Latvia. Therefore the paper deals with the factors constraining development plans of small farm holders, the current possibilities for improving small farm market capability, the possible development strategies to choose, and proposals for the improvement of small farm market capability in Latvia. The most significant barriers to implement the development plans for Latvian small farms are the lack of the production assets and also the difficulties to attract funding for long-term investments and current assets, as well as poor market infrastructure. The existing support measures have had a positive impact on the structural changes in Latvian agriculture; however, these measures have not been sufficient to solve the problems of the market capability of small farms and to contribute to their economic growth sufficiently. In order to improve the market capability of small farms of Latvia, programmatic approach is proposed consisting of four components: 1) training, 2) development of a business plan, 3) evaluation of a business plan, and 4) implementation of the business idea. Different instruments for the implementation of business ideas are attractable depending on whether the owner has selected the implementation of full-time agricultural strategies, part-time agricultural strategies or business diversification strategies.

Impact of Business Diversification Strategy on Firm Performance of Post-IPO Ventures in Korea

Impact of Business Diversification Strategy on Firm Performance of Post-IPO Ventures in Korea

An Unusual Deal

Questcor Pharmaceuticals’ recent announcement that it will pay $50 million to buy BioVectra, the supplier of the active ingredient in its one commercial drug, registers as a kind of “man bites dog” story. These days, most drug companies are divesting, not acquiring, manufacturing assets. The fact that a small drug firm in Anaheim, Calif., will now own a production site nearly as far away as possible in North America—Charlottetown, Prince Edward Island—makes the deal seem like even more of a stretch. But Don M. Bailey, Questcor’s chief executive officer, shrugs off any raised eyebrows and calls the move a standard business diversification strategy. Bailey has already succeeded in growing the company. Since being hired as Questcor’s CEO in 2007, he has turned the marketer of H. P. Acthar Gel, a money-losing orphan drug acquired from Aventis a decade ago, into a firm on track to post doubled sales for 2012. ...

CJ Cheiljedang’s global bio business success and its business diversification strategy through the market creation

CJ Cheiljedang’s global bio business success and its business diversification strategy through the market creation

An Empirical Study on the Determinants of Business Diversification Strategy in Korean Listed Firms

An Empirical Study on the Determinants of Business Diversification Strategy in Korean Listed Firms