Hospitality

ARTICLE IN PRESS cordial reception Management 26 (2007) 362375 www.elsevier.com/ post/ijhosman Market diversi?cation and ?nancial performance and stableness: A survey of hotel companies Myong Jae Leea,Ã, SooCheong (Shawn) Jangb collins School of Hospitality Management, The California State Polytechnic University, 3801 westerly Temple Avenue, 79B, Pomona, CA 91768, USA b Department of Hospitality and Tourism Management, Purdue University, West Lafayette, IN 47907-2059, USA a Abstract The primary accusative of this study was to investigate the effect of a diversi?cation strategy by hotel companies on collective ?nancial performance and stability. Using 36 publically traded hotel companies, this study analyzed the differences in ?nancial performance and stability between marketdiversi?ed and undiversi?ed hotel companies. Accounting vizors, market measure, and riskadjusted performance measure were employed to gauge ?nancial performance. The results of this study indicated that diversi?cation strategy does not for countenance pro?t growth, but diversi?cation partly make betters the stability of performance.

This study supported the nature of the trade-off between ?nancial performance and stability in the company diversi?cation, and also implied that the market diversi?cation strategy by hotel companies does not function as a means to improve ?nancial performance. r 2006 Elsevier Ltd. All rights reserved. Keywords: Market diversi?cation; Financial performance; stability; Risk-adjusted performance; Strategic management 1. Introduction Market diversi?cation has been considered an important business line strategy for increasing market share and pro?tability (Ayal and Zif, 1979). Researchers from several(prenominal) disciplines have attempted to identify the in?uence of diversi?cation strategies on corporate performance (Christensen and Montgomery, 1981; Kim and Gu, 2003; Mcdougall and ÃCorresponding author. Tel.: +1 909 869 3646. E-mail addresses: leepeachy72@hotmail.com (M. Jae Lee),... If you want to get a full essay, order it on our website: Orderessay

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