When Does Product Diversity Improve Performance? The Moderating Role of Customer Scope Strategy

This paper investigates the interaction effect of customer scope strategy and product diversification strategy on firm performance. The result provides a support for a positive moderating effect for product diversity on the relationship between customer scope and firm performance in 2005, while pursuing only product diversity has a negative but insignificant influence on performance. This result indicates that the combination strategy, which refers to implementing the both strategies (broadening customer scope and product diversity), improves firm performance under certain conditions. In the main body of the discussion, this paper suggests some theoretical implications based on the empirical results.