Abstract

MEDINA GIACOMOZZI, ALEX  and  HERNANDEZ MORALES, MIGUEL. Market strategy of economic groups in Chile: effects on performance and profitability. estud.gerenc. [online]. 2011, vol.27, n.119, pp.187-208. ISSN 0123-5923.

The relationship between corporate growth strategy (diversification versus concentration) and corporate profit is the issue that has probably garnered most attention in the field of research on strategic management, but it is also one where evidence is disparate and inconclusive. Hence, this article focuses on providing a new background to this discussion, by making a comparison to determine which growth strategy yields better performance and profitability. To this end, the study concentrated on the analysis of 38 Chilean economic groups selected by simple random sampling. The main result of this research study is that concentrated economic groups achieve increased profitability and performance as compared with diversified groups, but have a greater variation in their profit.

Keywords : Diversification; concentration; performance; profitability; economic group.

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