Despite the importance of geographic expansion in the services sector, few studies have analyzed the relationships between international diversification, product diversification and performance for services firms. Here we investigate whether and how firms in the retail-trade sector may benefit by spreading their boundaries within and across regional boundaries. Using a panel data set of 68 large European retailers from 19 countries for the period between 1997 and 2010, we find that intra-regional diversification has a horizontal S-curve relationship and interregional diversification has an S-curve relationship with firm performance. Moreover, the results show that unrelated product diversification has a negative moderating effect on the relationship between inter-regional diversification and firm performance. Overall, these results add support in the services sector for the three-stage paradigm of international diversification and performance
Drawing on the resource-based view and transaction cost economics, this study investigates the benefits and costs that might drive the dynamic relationship between an established multinational enterprise's (MNE) diversification into emerging markets and its firm performance. Using an unique dataset of the leading MNEs from the global retailing industry over thirteen years (from 1997 to 2009), we find a persistent inverted U-shaped relationship between diversification into emerging markets and profits. Thus, established MNEs that focus more intensively on a few emerging markets are able to outperform rivals that either decided not to diversify into emerging markets, were reluctant to commit sufficient resources to emerging markets, or diversified intensively into many emerging markets. However, when MNEs market a focused product portfolio, they are able to benefit by diversifying more intensively into various emerging markets. The study concludes with a discussion of established theoretical arguments in the context of emerging markets.
Despite the recognition that many firms operate multiple business models at the same time, little is known about when and how business model diversification may create value. In this study, we develop the construct of business model relatedness and examine its relationship with firm performance. Using a unique panel dataset of multibusiness firms in the retail- and wholesale-trade sectors (1997-2010), we find that the extent to which business model diversification is related increases firm performance. Interestingly, results also show that business model relatedness is more influential in determining firm performance than industry relatedness. This finding suggests that the concept of business model relatedness may be better able to capture the underlying resource relatedness among lines of business than the traditionally used concept of industry relatedness.
Press Release - Vom 4. bis 6. Juni 2009 fanden zum dritten Mal die unter der Schirmherrschaft des Retail Lab - eine Initiative des
Forschungszentrums fur Handelsmanagement der Universitat St.Gallen - ausgerichteten Retail Talent Career Days statt. Bei dem zweitagigen Recruiting Event auf Mallorca stellten Handelsunternehmen ausgewahlten Studierenden die Welt der Handelsbranche und deren Karriere-Moglichkeiten vor.
This study examines the relative importance of three relatedness dimensions - product, customer, and business-model relatedness - to explain corporate performance. Using a unique dataset of 170 multiunit chain organizations from 1999 to 2010, we first verify prior empirical findings by showing that related product diversification is positively associated with performance. Beyond previous findings, results Show that related customer and business-model diversification is also positively associated with performance. Interestingly, when simultaneously examined, related product diversification becomes insignificant, while related customer and business-model diversification remain significantly positively associated with performance. This finding suggests that the concepts of customer and business-model relatedness may be better able to capture resource relatedness among lines of business than the predominantly used concept of product relatedness.
This study develops a conceptual framework that captures key dimensions of product-market relatedness (i.e., product and customer relatedness) and business-model relatedness (i.e., value-proposition and distribution-channel relatedness). While previous research has typically investigated how related diversification along the product dimension affects performance, this study argues that superior performance may be driven by heretofore widely neglected intangible dimensions of relatedness beyond the product dimension. We test this argument using a unique dataset of 170 multiunit chain organizations for the period from 1999 to 2010. We first verify prior empirical findings by showing that related product diversification alone appears to be positively related to performance. Moreover, beyond previous findings, results show that related diversification along the customer and value-proposition dimensions also increases performance. Interestingly, the tangible product dimension of relatedness becomes insignificant in combination with intangible relatedness dimensions, providing support for our argument that superior performance is mainly driven by resource flows along intangible dimensions of relatedness.