Case analysis on performance of Chinese listed companies for suggestions to their diversification strategy

Ever since diversification strategy was introduced and implemented to Chinese corporations in 1980s, more and more entrepreneurs have been attracted and tried to experience this new strategy. Unfortunately, not all have achieved success when operating this strategy. There are numerous listed companies employing diversification strategy. The performance of them is closely correlated with the healthy and sustaining growth of Chinese economy. It is critical to address whether and how the diversification strategy could influence the performance of those companies deserves further research. Here we investigated in relationship between the diversification strategy and companies´ performance through analyzing the correlation between financial performance index and the degree of diversification. Essential concepts and notions of diversification strategy are introduced, followed by explanation to analyzing and sampling approaches. Then, based on results from data of one hundred sample listed corporations, we proposed explanations of the conclusion and provided suggestions for successful implementing of diversification strategy in Chinese corporations.