Researches on diversificaion have focused on explaning inter-relationships between or among the factors of diversificaion including motives, methods, types, and performance. The researches are useful in understanding the diverssification phenomenon. However, these researches do not provied a integrated framework for establishing a diversification stategy.
This thesis is to provide a process model of diversification strategy, which can be viewed as a integrated framework in establishing a successful diversificaition strategy. The process model integrates various theories and viewpoints including institutional context, strategic orientation, stategic intent, dominant logic, resource-based view, core competence, dynamic capability, competitive advantage and sustainability, learning organizaion, organizational culture, and evolutionary perspective.
This thesis argues that diversificaion is a dynamic process to which various stategic factors are complicatedly applied. Therefore, it is improtant to determine, in each step of the process, which stategic factors are critical. The process model is comprised of five manor steps ; 1) diversification decisions affected by internal and external strategic factors where a company search ans select a new business to acquire and sustain competitive advantage, 2) gap analysis between existing businesses and new one where industry structure, business characterisitis, resources and capabilities, competitive advantages of the business, dominant logic, and culture should be included, 3) selection method, how to get a competitive advantages, how to make what commitments, entry stategy, and organizational architecture, 4) diversification management which comprise building and sustaining competitive advantage, setting up a management system of resources, capabilities, and organization, forming a new dominant logic and culture, acquiring learning and dynamic capability, and synergy generating system, 5) feedback of diversification's performance and learning to the above steps of the process.
Based upon the process model and the analysis of the semiconductor industry, this thesis proposes a experimental alternative to diversification stategy of a Korean semiconductor company from DRAM-focused to ASIC & CPU businesses.
Major implications from the process model and the proposed alternative are ; 1) the diversification should be understood as a dynamic process where various stategic factors are applied, 2) a diversification decision should be focused on how to acquire and sustain competitve advantages considering internal resources and capabiblities and external environment. 3) Korean semiconductor companies' diversificaition to ASIC and CPU business requires changes of stategic apporach, dominant logic, organizational culture, the pattern and degress of commitment, organizaional strucure, and 4) diversification is a process of organizational learning and building dynamic capabilities of a company which generates synergies among the business.
