Comparison of Diversification Strategies by Four Groups of International Companies

Abstract

This paper analyzed the historic evolution and the current posture of diversification

strategies by four groups of international firms: U.S.-based multinational

corporations, European trading houses, Japanese sogo-shosha , and Korean

general trading companies. These firms strategies were compared on three

dimensions: product, geographic and functional diversification. Quantitative

measurement of the current posture confirmed the observation of the historic

evolution that the sogo-shosha were the most diversified in all three dimensions,

while each of the other three groups was diversified in two dimensions; U.S.based

multinationals by geographic area and function; European trading houses

by product and function; and Korean general trading companies by product

and geographic area.