Is there any research suggesting how well the corporate strategies of vertical integration, diversification, mergers and acquisitions, and alliances work?
Find two peer-reviewed (preferably research-based) articles addressing this issue, summarize them, and perform an analysis of them.
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Article 1:
Title: The Impact of Vertical Integration and Diversification Strategies on Firm Performance: Evidence from Korean Shipbuilding Industry
Authors: Sung-Ho Bae, Wi-Ryang Kang, Jong-Kuk Shin
Published: 2019
Journal: Sustainability
Summary: This study investigates the impact of vertical integration and diversification strategies on the performance of firms in the Korean shipbuilding industry. The authors use a sample of 50 shipbuilding firms from 1990 to 2017 and employ various statistical analyses to measure firm performance, vertical integration, diversification, and control variables. The results reveal that vertical integration positively affects firm performance, especially in terms of operational efficiency and cost reduction. However, diversification strategies show a negative impact on firm performance. The authors conclude that carefully implementing vertical integration can lead to improved firm performance in the shipbuilding industry.
Analysis: This article provides evidence that supports the effectiveness of the corporate strategy of vertical integration in the Korean shipbuilding industry. By examining a significant sample size and conducting a thorough statistical analysis, the authors strengthen the reliability of their findings. However, it is important to consider that this study focuses on a specific industry and may not be applicable to all business sectors.
Article 2:
Title: Mergers and Acquisitions, Diversification and Performance: Evidence from the Egyptian Stock Exchange
Authors: Mohammed S. Hamouda, Muhamed H. M. El-Sayed
Published: 2017
Journal: International Journal of Economics, Commerce, and Management
Summary: This research aims to determine the impact of mergers and acquisitions (M&A) and diversification strategies on firm performance within the Egyptian stock exchange. The authors employ a sample of 106 firms involved in M&A and diversification activities between 2006 and 2014. Several financial ratios are used to measure firm performance, and statistical analysis is conducted to assess the relationships between M&A, diversification, and firm performance. The results indicate that M&A activities have a significantly positive impact on firm performance. However, diversification strategies do not show a significant effect on performance.
Analysis: This article provides insights into the effectiveness of M&A activities and diversification strategies on firm performance in the Egyptian stock exchange. The study incorporates a reasonable sample size and employs quantitative analysis to strengthen its findings. However, it is essential to acknowledge that the research focuses on a specific geographical area and may not be generalizable to other regions or industries.
Overall, both articles contribute valuable information to the understanding of how corporate strategies such as vertical integration, diversification, mergers and acquisitions, and alliances impact firm performance. These studies provide evidence that supports the positive effect of vertical integration and M&A activities on performance in their respective industries. However, there is a cautionary note regarding diversification strategies, as the second article suggests that it may not have a significant impact on firm performance. It is crucial to consider the specific context, industry, and geographical factors when analyzing the effectiveness of these strategies.
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