Comparative Analysis on the Diversification Effects between Firm Performance and Whole Supply Chain Performance in Korea and Japan

Because supply chain strategies and practices depend on product and market characteristics as well as the nature of the business, the competitive environment, and the technological intensity of the product, SC integration (supply chain integration) strategies can also be evaluated in terms of a company s market and product strategies. This paper examines the correlation effect between SC integration and market/product diversification on both a firm s performance and performance of the whole supply chain. Through simultaneous equation analysis on the proposed model representing structural relationships among four constructs by employing LISREL, this paper shows that the coordination and cooperation of SC integration and diversification strategies have a significant effect on both the whole SCM performance and the firm’s performance. The results of this study could be useful in integrating supply chain management strategy into the overall corporate strategy.