scholarly journals Related Diversification Using Core Competencies in South Korean Dairy Industry

2021 ◽  
Vol 7 (4) ◽  
pp. 243
Author(s):  
Dawon Kim ◽  
Rosa Kim ◽  
Tongwon Lee ◽  
Seungho Choi
Keyword(s):  
Open Innovation ◽  
Core Competencies ◽  
Dairy Industry ◽  
South Korean ◽  
Unrelated Diversification ◽  
Related Diversification ◽  
Dairy Market

This study aims to examine how unrelated diversification facilitate firm’s growth and innovation. To achieve this goal, we investigate how Maeil Dairies has diversified through open innovation as the Korean dairy market struggles to maintain its size. Maeil Dairies, one of the top three conglomerates in the Korean dairy industry, has gone through different forms of diversification both related and unrelated to its core competencies. This study presents what the overlapping competencies are in its diversified products and businesses, analyzes the effectiveness of diversification in terms of relatedness, and examines the need for unrelated diversification. By analyzing the four diversification categories of the Maeil Dairies case and applying diversification theory, this study shows that although related diversification is more recommendable in most circumstances, unrelated diversification may present new opportunities and is necessary in order to avoid stagnation and falling behind.

scholarly journals Pengaruh Risiko Bisnis, Life Cycle Dan Diversifikasi Terhadap Struktur Modal Serta Hubungannya Dengan Nilai Perusahaan Manufaktur Di Indonesia

2016 ◽  
Vol 9 (1) ◽  
Author(s):  
Septi Diana Sari
Keyword(s):  
Life Cycle ◽  
Capital Structure ◽  
Firm Value ◽  
Order Theory ◽  
Diversification Strategy ◽  
Single Segment ◽  
Unrelated Diversification ◽  
Related Diversification ◽  
Positive Effect ◽  
The Capital Structure

This study aims to examine the factors that affect the capital structure. The task of the financial manager is to determine the amount of capital structure to enhance shareholder value. Since the capital structure associated with firm value , this study also aimed to examine the effect of capital structure on firm value by considering the company's diversification strategy and corporate life cycle stages . By using the data obtained from the OSIRIS period 2009-2012, researchers used multiple regression test and path analysis to test the hypothesis. From the test results stated that only companies which are in the start-up phase which has a significant positive effect on the capital structure , as well as the diversification strategy has an influence on the capital structure of the company's capital structure with a sequence of related diversification > unrelated diversification > single segment. But when regressed diversification strategy with corporate values, only a single segment strategy and related diversification which significantly affect the value of the company, as well as the positive effect of capital structure on firm value. Most of the results of this study can be explained by the signaling effect and the pecking order theory. 

scholarly journals Product diversification and large construction firm productivity: the effect of institutional environments in Malaysia

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mohd Azrai Azman ◽  
Carol K.H. Hon ◽  
Bo Xia ◽  
Boon L. Lee ◽  
Martin Skitmore
Keyword(s):  
Firm Performance ◽  
Positive Impact ◽  
Product Diversification ◽  
Content Type ◽  
Construction Firms ◽  
Unrelated Diversification ◽  
Construction Firm ◽  
Related Diversification ◽  
Generalised Method Of Moments ◽  
The Impact

PurposeMany large construction firms (LCFs) adopt product diversification (PD) to counter downturns and spread risks. However, no detailed information is available concerning the type of PD that improves their performance. In addition, it is still uncertain how much changes in institutional dimensions influence the effectiveness of PD. Therefore, the aim is to resolve this issue by establishing a model that shows the extent of this influence.Design/methodology/approachThe generalised method of moments (GMM) estimator is used to model the PD strategies of 86 LCFs in Malaysia over 14 years (2003–2016) and its impact on productivity and profitability performance.FindingsUnrelated diversification (UD) decreased firm performance in 2003–2016, while related diversification (RD) had a positive impact during the more liberal 2010–2016 phase. The models show that the impact of PD is highly dependent on changes in institutional dimensions.Practical implicationsFirstly, managers may adjust the type of PD and its level of diversification to improve firm performance. Secondly, they may devise PD strategies based on changes in institutional dimensions to maximise their effectiveness.Originality/valueThe study contributes to the literature by determining the optimal amount of PD (including RD and UD) and its impact on performance. Secondly, the study is the first to investigate the moderating relationship of the institutional dimensions of economic and regulatory institutions on PD-firm performance. Thirdly, the study is the first to explore the components of technical-scale-scope economies (movement towards and around the production frontier), this being crucial to the strategy that was only conjectured in previous studies.

scholarly journals Retraction: Bigger data open innovation: potential applications of value-added products from milk and sustainable valorization of by-products from the dairy industry

2017 ◽  
Vol 19 (13) ◽  
pp. 3164-3164
Author(s):  
S. Ortega-Requena ◽  
S. Rebouillat
Keyword(s):  
Open Innovation ◽  
Dairy Industry ◽  
Value Added ◽  
Innovation Potential ◽  
Potential Applications ◽  
By Products ◽  
Value Added Products

Retraction of ‘Bigger data open innovation: potential applications of value-added products from milk and sustainable valorization of by-products from the dairy industry’ by S. Ortega-Requena et al., Green Chem., 2015, 17, 5100–5113.

Corporate or Product Diversification

2017 ◽  
Author(s):  
Margarethe F. Wiersema ◽  
Joseph B. Beck
Keyword(s):  
Distribution Channels ◽  
Shareholder Wealth ◽  
Product Diversification ◽  
Strategic Decision ◽  
Business Trend ◽  
Corporate Diversification ◽  
Diversification Strategy ◽  
Unrelated Diversification ◽  
Strategic Assets ◽  
Related Diversification

Corporate or product diversification represents a strategic decision. Specifically, it addresses the strategic question regarding in which businesses the firm will compete. A single-business company that expands its strategic scope by adding new businesses becomes a diversified, multibusiness company. The means by which a company expands its strategic scope is by acquiring businesses, investing in the development of new businesses, or both. Similarly, an already diversified firm can reduce its strategic scope by divesting from or closing businesses. There are two fundamentally different types of corporate diversification strategy, depending on the interrelatedness of the businesses in the company’s portfolio: related diversification and unrelated diversification. Related diversification occurs when the businesses in the company’s portfolio share strategic assets or resources, such as technology, a brand name, or distribution channels. Unrelated diversification occurs when a company’s businesses do not share strategic assets or resources and do not have interrelationships of strategic importance. Companies can pursue both types of diversification simultaneously, and thus have a portfolio of businesses both related and unrelated. In addition to variations in the type of diversification, companies can vary in the extent of their diversification, ranging from business portfolios with very limited diversification to highly diversified portfolios. Decisions regarding the diversification strategy of a firm represent major strategic scope decisions since they impact the markets and industries in which the company will compete. Companies can increase or reduce their level of diversification for a variety of reasons. Economic motives, for example, include the pursuit of economies of multiproduct scale and scope, whereby per-unit costs may be lowered through the increase in sales volume or other fixed-cost reducing benefits associated with growth through diversification. In addition, companies may diversify for strategic reasons, such as enhancement of capabilities or superior competitive positioning through entry into new product markets. Similarly, economic and strategic reasons can motivate the firm to refocus and reduce its level of diversification when the strategic and economic rationales for being in a particular business are no longer justified. The performance consequences of corporate diversification can vary, depending on both the extent of the firm’s diversification and the type of diversification. In general, research indicates that high levels of diversification are value-destroying due to the integrative and complexity-associated costs that administering an extremely diversified portfolio imposes on management. Nevertheless, related diversification, where the company shares underlying resources across its business portfolio (e.g., brand, technology, and distribution channels), can lead to higher levels of performance than can unrelated diversification, due to the potential for enhanced profitability from leveraging shared resources. Corporate diversification was a major U.S. business trend in the 1960s. During the 1980s, however, pressure from the capital market for shareholder wealth maximization led to the adoption of strategies whereby many companies refocused their business portfolios and thus reduced their levels of corporate diversification by divesting unrelated businesses in order to concentrate on their predominant or core business.

scholarly journals Open Innovation Competence for a Future-Proof Workforce: A Comparative Study from Four European Universities

2021 ◽  
Vol 16 (6) ◽  
pp. 2442-2457
Author(s):  
Marita McPhillips ◽  
Magdalena Licznerska
Keyword(s):  
Open Innovation ◽  
Management Practice ◽  
Core Competencies ◽  
Interdisciplinary Approach ◽  
Digital Transformation ◽  
Knowledge Flows ◽  
European Universities ◽  
Competence Profile ◽  
Competence Framework ◽  
The Individual

Digital transformation is a key driving force of open innovation to capture and transfer knowledge inside and outside of a company’s bounds. New challenges in organizing multiple knowledge flows imply the need for increased competences related to this paradigm of future employees. In this article, we organize and aggregate the competencies required for open innovation collaboration and develop a competence profile that organizes individual competencies in an open innovation context. Based on elements of the European Entrepreneurship Competence Framework, we delineate an OI Competence Profile and list the core competencies to manage and accelerate the inflow and outflow of knowledge. We explore this profile by comparing data from 2332 students from four European universities to find differences in the distribution of OI competencies between countries. The study contributes to understanding the individual competencies that target the future OI needs of companies necessary in the context of digital transformation. It also introduces an interdisciplinary approach to integrate the research streams of management practice, open innovation, and entrepreneurial education.

Corporate controls, geographic dispersion, and their effect on corporate financial performance in related diversified corporations

2017 ◽  
Vol 10 (1) ◽  
pp. 102-117 ◽  
Author(s):  
Pouya Seifzadeh
Keyword(s):  
Corporate Strategy ◽  
Corporate Diversification ◽  
Control Mechanisms ◽  
Geographic Diversification ◽  
Content Type ◽  
Geographic Dispersion ◽  
Positive Effects ◽  
Unrelated Diversification ◽  
Related Diversification ◽  
Overall Performance

Purpose Drawing on the literature on corporate diversification, the purpose of this paper is to shed light onto the influence of geographic dispersion on the effectiveness of control mechanisms in related diversified corporations. This research contends that control mechanisms implemented by corporations and the extent of geographic diversification play a role in the synergies expected from related diversification being realized. Design/methodology/approach This study uses OLS regression to analyze data collected through surveys from managers of 193 Iranian corporations and their 2,704 subsidiaries to examine the relationship between relatedness, corporate performance, geographic dispersion, and emphasis of strategic controls. Findings The author finds that a triple interaction effect between corporate strategy (diversification approach), controls mechanisms, and the extent of geographic diversification influences the overall performance of corporations. Findings of this research suggest that the positive effects of strategic controls in related diversified corporations are most when there is less geographic dispersion and will attenuate as corporations become more geographically disperse. Research limitations/implications The findings of this research, have contributed to the extant literature in several ways. First, the findings further establish the superiority of related diversification to unrelated diversification in achieving economic performance in corporations. The findings reveal that, ceteris paribus, the more relatedness between activities of subsidiaries in corporations exists, higher performance can be expected at the corporate level. Second, the findings show once more that to achieve the higher performance that results from synergies in related diversified corporations, emphasis of strategic controls play a crucial and important role. Third, the author find that although the emphasis of strategic controls in essential to realizing the potentials in related diversified corporations, greater geographic dispersion attenuates the positive effects expected from stricter enforcement of strategic control mechanisms. Practical implications An important consequence of findings of this research is that managers should be more aware of the implications of selecting the geographic location of the subsidiaries that they either acquire or establish. While the literature focusing on corporate diversification has mainly focused on the differences between related and unrelated diversification, this paper brings a new factor into light. Therefore, the findings of this research provide the author with a better understanding of the factors that define success or failure in achieving financial objectives of corporations. Originality/value There has been very little done to investigate the factors that influence effectiveness of strategic controls in related diversified corporation. Much of this shortcoming has resulted due to difficulties in measurement of strategic controls their operationalization in empirical studies. This study has taken a step to that direction and therefore, provides a more coherent and clear picture of the factors that influence the overall performance in corporations.

Economic gains around mergers and acquisitions in the construction industry of the United States of America

2004 ◽  
Vol 31 (3) ◽  
pp. 513-525 ◽  
Author(s):  
Jongsoo Choi ◽  
Jeffrey S Russell
Keyword(s):  
Mergers And Acquisitions ◽  
Construction Industry ◽  
The United States ◽  
Equity Market ◽  
Market Returns ◽  
Diversification Strategy ◽  
Unrelated Diversification ◽  
Related Diversification ◽  
Research Findings ◽  
And Performance

As waves of mergers and acquisitions (M&A) have swept over American industrial business organizations, construction firms have been caught in the middle of the resulting turbulence. Nonetheless, no research has investigated these significant events in the construction industry. Built upon the financial theories and methodology, the overall success level of construction M&A transactions was assessed. The research findings, which were drawn from an analysis of 171 construction M&A transactions, indicate that the performance of construction M&A was positive at an insignificant level, as measured by equity market returns. Whereas the relationship between the type of diversification strategy and performance indicates that while the related diversification strategy has been slightly favored by both theories and empirical research findings over unrelated diversification, no significant performance difference was observed between two diversification strategies.Key words: mergers and acquisitions, diversification strategy, equity market returns.

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