Research on the Key Influencing Factors of the Difference in

Financial Performance of Enterprises Under the Same Firm-Level

Strategy: A Case Study Based on Diversification, Integration and

Intensification Strategies

Xuanlin Feng

Xianda College of Economics and Humanities, Shanghai International Studies University, Shanghai, China

Keywords: Different Strategic Choices, Key Factors, Company-Level Strategy, Corporate Financial Impact.

Abstract: Based on the economic downturn and fierce business wars, the company must choose the appropriate strategy

in five different company-level strategies to meet the company's sustainable development. The company-level

strategy determines the direction of resource allocation, so it has a significant impact on the financial situation.

In order to explore which strategy can win the favor of investors and effectively improve corporate finance,

this paper focuses on analyzing the different impacts of different enterprises on finance under the same strategic

choice, so as to summarize the key factors of different strategic choices. Its purpose is to effectively assist

enterprises to optimize strategic decision-making, and enterprises can also learn from each other, so as to

improve their own financial management level. This paper is supplemented by case analysis and literature

research to explore, and the conclusion is that corporate strategic choices have their own merits, and in the case

of different types of enterprises, even the same strategy will have different impacts on corporate finance, and

there is no obvious superiority of any strategy. For enterprises that choose a diversification strategy, core

competitiveness is the main factor affecting the financial strength of the enterprise. For enterprises that choose

an integration strategy, the characteristics of the enterprise are the main factors affecting the advantages and

disadvantages of the company's finances. For enterprises that choose an intensive strategy, the type of business

operation is the main factor affecting the financial strength of the enterprise.

1 INTRODUCTION

In the 60-90s of the 20th century, the concept of

company-level strategy was put forward and received

widespread attention, and up to now, most people

have understood that there are five kinds of

integration strategy, diversification strategy,

intensive strategy, defensive strategy, and

cooperative strategy. In a fierce business

environment, if a company wants to gain more

investors, its financial position is an important factor

to attract investors, and choosing different strategies

will have different financial impacts. For example,

the existing research mostly focuses on specific

enterprises, such as the different financial choices

reflected in different strategic choices of

manufacturing enterprises, while the comparative

research on the financial aspects of different

https://orcid.org/0009-0009-7602-6657

enterprises is slightly insufficient in the selection of

the same company-level strategy.In order to make the

financial impact intuitive and significant, reflect the

financial expansion space and focus on the benefits

brought by enterprise collaboration, so that different

types of companies that choose the same strategy can

learn from each other's management essence to

improve the practical significance of financial

level.Based on the perspective of enterprise

development, market competition, and industry

trends, enterprises usually choose diversification

strategies in order to diversify business risks, find

new growth points, and obtain resources and policy

advantages for coordinated industrial development;In

order to expand market boundaries and pursue

economies of scale, enterprises will choose

integration strategies; In order to control costs, focus

on a certain business, and optimize resources,

Feng, X.

Research on the Key Inﬂuencing Factors of the Difference in Financial Performance of Enterprises Under the Same Firm-Level Strategy: A Case Study Based on Diversiﬁcation, Integration

and Intensiﬁcation Strategies.

DOI: 10.5220/0013842800004719

Paper published under CC license (CC BY-NC-ND 4.0)

In Proceedings of the 2nd International Conference on E-commerce and Modern Logistics (ICEML 2025), pages 283-289

ISBN: 978-989-758-775-7

283

enterprises usually choose an intensive strategy.The

vast majority of companies will choose one of these

three for their strategic development, while different

types of enterprises face the same corporate strategy

choice, but have different financial effects. Therefore,

this paper will discuss the impact of integration

strategy, diversification strategy and intensification

strategy on corporate finance, and why different types

of enterprises will have different impacts on finance

under the choice of the same strategy, and use case

analysis and literature research method to sort out,

analyze and summarize for subsequent researchers.

2 LITERATURE REVIEW

2.1 Diversification Strategy: Balance of

Opportunities, Risks, and Resource

Allocation

The diversification strategy has the characteristics of

high financing pressure, entering new areas requires

a large amount of capital investment, enterprises may

need to increase debt or equity financing, increase

financing costs and financial risks, if the new business

does not achieve the expected benefits after

financing, it will make the enterprise fall into

financial difficulties (Huang, 2020) but in terms of

revenue, it can increase revenue sources, enter new

business areas and markets, and reach more customer

groups,For example, Xiaomi has expanded from

mobile phone business to smart wearables and other

fields to increase revenue. In terms of risk, it helps to

diversify risks, reduce the dependence of enterprises

on a single business or market, and when a business

is affected by market fluctuations, other businesses

can be supported.For example, real estate enterprises

carry out property service business to diversify risks.

In terms of cost, it is possible to reduce costs, find

optimal suppliers globally through diversification,

and reduce costs by taking advantage of synergies,

such as sharing production facilities.Funding may

lead to diversification of funds, and investing in

multiple areas will make it difficult to concentrate

resources on the most potential projects, affecting the

efficiency of capital utilization. For example,

enterprises invest heavily in multiple non-core

businesses. Management will increase management

costs, increase management complexity, require

management to have a wider range of knowledge and

skills, and decision-making efficiency may be

affected. If a company is involved in multiple

different industries, it is much more difficult to

manage (Cui, 2024).The diversification strategy

allows enterprises to get involved in multiple

businesses, enjoy the benefits of risk diversification

and business expansion, revenue growth at the same

time, but also increase the production and

management costs of enterprises, if not implemented

properly, it will lead to resource dispersion and affect

financial performance.

2.2 Integration Strategy: The

Trade-off Between Resource

Integration and Cost Input

The integrated strategy can integrate resources to

reduce costs, improve profitability, optimize capital

utilization, and improve turnover. Get comprehensive

data to reduce financial risk. However, it may also

lead to excessive concentration of resources and

increase operational risks; The scope and difficulty of

management have increased, and the cost of

management has risen; It has high requirements for

the quality of financial personnel and information

systems, and the upfront investment cost is large

(Chen, 2020).Therefore, the integration strategy may

have huge capital investment and integration costs

and management difficulties, but from the perspective

of vertical integration, the integration of upstream and

downstream resources will reduce the cost of

production and sales, enhance the control of the

production chain of enterprises, and for horizontal

integration, it can achieve economies of scale, thereby

improving gross profits and enhancing profitability.

2.3 Intensive Strategy: Focus on the

Contradiction Between Business

and Construction Investment

Intensive strategy to concentrate resource

procurement, which can reduce costs; Centralized

fund management can improve the efficiency and

income of capital use; Harmonizing financial

processes and standards improves the quality and

comparability of financial information for decision-

making. However, the disadvantage lies in the large

investment in the early stage of construction, such as

the high cost of establishing a financial sharing

center; It is easy to lead to overly strict financial

control and affect business flexibility; Once the

information system fails, it will lead to greater

financial and operational risks (Ji, 2024).Therefore,

the intensive strategy focuses on a certain business,

which will improve the competitiveness of the core

business and improve the financial situation to a

certain extent in the short term.

ICEML 2025 - International Conference on E-commerce and Modern Logistics

284

3 CASE STUDY

3.1 The Advantages and Disadvantages

of Diversification Strategy on

Finance

Founded in 1966, Evergrande Group started as a real

estate company, and later diversified into a large

enterprise group in finance, health, sports and other

fields.Starting from the main business of real estate,

it has successively entered many unrelated industries

such as property, tourism, network, health, grain and

oil, dairy, ice spring, sports, financial management,

and automobiles. With the exception of real estate,

almost all other sectors lost money. When the real

estate industry encounters market disruptions, its

various industries face the risk of capital chain

breakage, which eventually leads to difficulties for

enterprises (Ma, 2017).The reasons for this are as

follows: the rapid entry into multiple industries but

the lack of professional management models and core

competitiveness in different fields, due to the blind

expansion of business has led to the dispersion of

funds, making it difficult for the original financial

resources to effectively support important

businesses.For example, its drinking water brand:

Evergrande Ice Spring. Before it was put into the

market, there were well-known Chinese drinking

water brands led by Nongfu Spring and Cestbon, and

the failure of Evergrande Ice Spring was obviously a

lack of awareness of the market, and the focus was on

marketing, while ignoring the quality, and finally

caused significant financial losses due to unstable

foothold in the market, which also happened in other

industries where it expanded.When the core industry,

the real estate industry, is blocked due to economic

problems, Evergrande's source of cash flow is

basically lost, which eventually leads to the rupture of

the capital chain.Therefore, for diversification, the

firm should not blindly pay attention to immediate

interests and blindly follow the trend to broaden the

business scope, but should accurately evaluate

ourselves, identify the core competence points, adjust

the management mode of various industries,

rationally layout, and step by step, so as to move

forward steadily in the development of diversification

strategy.

Meituan started as a group buying business and

gradually expanded to include food delivery, hotel

reservations, tourism, fresh e-commerce, bicycle

sharing and other fields.Through its diversification

strategy, it is user-centric, broadens the life service

scene, realizes the scale effect, improves the strategic

layout of the enterprise, enhances the market

competitiveness, and becomes a super platform in the

field of life services (Liu, 2021).Meituan has taken a

fancy to consumers' demand for diversified life

services, so it has broadened its business, for

example, if users have a demand for dining, it has

increased its takeaway business; If there is a demand

for accommodation cars, they will carry out hotel and

bicycle sharing business.Under the condition of user-

centricity, the synergy between each business is

realized, which is conducive to the improvement of

financial level. The improvement of its corporate

strategic layout, including clothing, food, housing

and transportation, supports each other and forms a

scale effect, which is conducive to enhancing

Meituan's stability and anti-risk ability, thereby

further forming a guarantee effect on finance.Not

only that, due to the accumulation of rich

management level and operation methods in the early

stage, the brand influence has been enhanced with the

expansion of business, which will attract more users

and merchants, forming a virtuous circle, which is

conducive to the stability of the capital chain.

3.2 The Advantages and Disadvantages

of the Integration Strategy on

Finance

Enron was an energy giant founded in the United

States in 1930 and declared bankruptcy in 2001 due

to financial fraud.Due to the implementation of the

hybrid integration strategy, it abandoned its main

business and rashly entered unrelated fields, which

involved too wide and too large a scale, resulting in

huge internal transaction costs, reducing the

flexibility of capital use, and whitewashing its

performance through related party transactions, and

finally falling into a comprehensive financial crisis

and leading to bankruptcy (Li, 2003).This case shows

that Enron's strategic decision-making mistakes led to

the increase in financial risks, and Enron's

whitewashing of its performance through related

party transactions shows that there are serious

problems in its internal control system, and due to the

inability to effectively restrain the management, it

produces false financial information, resulting in

external investors being misled and unable to

accurately assess the company's true financial

situation, and finally forming the tragedy of the

company's stock plummeting and

bankruptcy.Therefore, Enron should strengthen its

internal financial control to ensure the authenticity

and validity of financial data, and should also pay

more attention to risk assessment, and detect and deal

with various financial risks as early as possible, so as

Research on the Key Inﬂuencing Factors of the Difference in Financial Performance of Enterprises Under the Same Firm-Level Strategy: A

Case Study Based on Diversiﬁcation, Integration and Intensiﬁcation Strategies

285

to reduce the maximum financial loss to a certain

extent.China Salt Jintan Salinization Co., Ltd. has

implemented a horizontal integration strategy,

integrated resources, and cross-border cooperation,

realized the development and transformation of

"social responsibility, horizontal integration,

technological innovation, and green transformation",

embarked on a green and sustainable development

path, and achieved success in green transformation

(Sun, Zhou, &Zhong, 2022).Through the integration

strategy, integration of resources and cross-border

cooperation, the company is not only conducive to

broadening the market scope and business areas,

promoting the growth of revenue, but also helping to

achieve the optimal allocation of resources, improve

the efficiency and quality of assets, accelerate the

capital turnover rate, reduce production costs, and

then have a positive impact on the financial situation

and lay a strategic foundation for the success of the

company's green transformation.

3.3 The Advantages and Disadvantages

of the Intensive Strategy on

Finance

Northwest Hubei Expressway is a Hubei Jiaotong

Northwest Expressway operating company

established in 2015 and mainly engaged in high-speed

operation and management.In accordance with the

principle of "centralized control, hierarchical

responsibility, linkage between the upper and lower

levels, and collaborative sharing", it implements

intensive financial management, such as the

implementation of "one door and two cards" intensive

office, and the construction of a financial index

benchmarking system. In the first quarter of 2024, the

expensed expenses decreased by 13.27% year-on-

year, the level of financial service guarantee was

steadily improved, and business risks were effectively

prevented (Legal Life Weekly, 2024). Due to the four

principles, the company has been able to achieve a

steady increase in its financial level. "Centralized

control" can effectively and uniformly manage the

funds of the enterprise, which can improve the

efficiency of the use of funds, reduce the waste and

idleness of funds, enhance the overall operation

ability of the enterprise's funds, and form a virtuous

circle of funds;"Hierarchical responsibility" clarifies

the responsibilities of financial departments at all

levels, and can be held accountable as soon as

possible when there are problems caused by financial

personnel due to work mistakes, which also prompts

financial personnel to improve work efficiency and

quality to ensure that the financial work is carried out

in an orderly manner;"Upper and lower linkage" can

make financial information quickly and accurately

transmitted within the enterprise, and can quickly

convey the financial strategy and goals of the superior

to the grassroots level, so as to facilitate the grassroots

to better carry out financial work and avoid financial

errors caused by information asymmetry;

"Collaborative sharing" is conducive to giving full

play to the advantages of financial resources, data,

software and other resource sharing, reducing the

waste of resources, thereby reducing the management

cost of enterprises. At the same time, it also promotes

the collaboration between the finance department and

the business department, so that the financial

personnel can better understand the business needs

and provide more accurate financial support for the

business, which can effectively reduce the loss of

financial volume.

Founded in 2014, Xpeng Motors is a car company

focusing on smart electric vehicles, creating smart

mobility experiences with technology and

innovation.According to the annual report data, in the

fourth quarter of 2024, Xpeng Motors delivered

91,500 vehicles, with a quarterly loss of 1.33 billion

yuan (Li, 2025).The "steel price gate" incident is very

famous, and the "lowest price in the country" data

chain carefully woven by the procurement team is

essentially a form of corruption escalation in the

digital era. Through fragmented presentation,

selective comparison, parametric packaging and other

means, the real cost is submerged in the "data fog" of

technology construction. (Douzi Kanche,2025).Due

to the construction of a hidden interest chain and the

problem of data fraud, it is difficult for enterprises to

accurately know the cost amount, which greatly

affects the cost analysis and control decision-making,

thereby pushing up the cost, and the inflated

procurement cost makes the enterprise mistakenly

think that it has spent too much money on steel

procurement, which will lead to slowing down the

turnover efficiency of funds, and to a certain extent,

it will affect the capital investment in the key business

of the enterprise.This incident will also trigger an

investigation by the regulatory authorities, and in

order to cooperate with the investigation, the

company needs to provide relevant information and

pay for legal advice, which will increase the financial

burden in the case of affecting the reputation and

normal operation of the enterprise.Therefore, Xpeng

car companies should strengthen cost control,

optimize the procurement cost mix, achieve a

reasonable allocation of funds, and achieve the ideal

goal of balancing the relationship between multiple

funds.

ICEML 2025 - International Conference on E-commerce and Modern Logistics

286

3.4 Factors that Affect Financial

Prosper

The advantages of diversification strategy on

corporate finance are not only reflected in the benefits

of risk diversification and business expansion, but

also in terms of revenue growth, which is conducive

to realizing synergies between various businesses, so

as to achieve financial improvement.Secondly, the

improvement of the strategic layout of the enterprise

focuses on making important businesses support each

other and form a scale effect, which is conducive to

enhancing financial stability and anti-risk ability. The

accumulation of rich management level, operation

methods and brand influence is enhanced, which is

conducive to the formation of a virtuous cycle of

funds, thereby consolidating the stability of the

capital chain.

On the one hand, the disadvantages of

diversification strategy to corporate finance are

reflected in the fact that it will lead to the dispersion

of funds, and investing in multiple areas will make it

difficult to concentrate resources on the most

potential projects, which will affect the efficiency of

capital utilization. At the same time, it also increases

the production management cost and management

complexity of the enterprise, and if the management

is not implemented properly, it will lead to the

dispersion of resources and affect the financial

performance.On the other hand, the blind expansion

of business will lead to the dispersion of funds, which

is not conducive to supporting the original core

business and undermining financial stability.

The advantages of the integration strategy on the

financial of the enterprise are that it integrates the

upstream and downstream resources to reduce the

cost of production and sales, enhance the control of

the production chain of the enterprise, and is

conducive to achieving economies of scale, thereby

increasing gross profit and enhancing

profitability.Secondly, it is conducive to the

integration of resources, cross-border cooperation,

broadening the market scope and business areas,

promoting the growth of income, and helping to

achieve the optimal allocation of resources. In

addition, it can improve the efficiency and quality of

assets, speed up capital turnover, reduce production

costs, and have a positive impact on the financial

situation.

The disadvantages of the integration strategy to

the financial of the enterprise: the huge capital

investment and the difficulty of integration and the

increase in management difficulty. It is also difficult

for enterprises to accurately grasp the scope and scale

of their business, which is easy to bring huge internal

transaction costs and reduce the flexibility of capital

use.

The financial advantage of the intensification

strategy for enterprises is that they can concentrate on

resource procurement and reduce costs. Centralized

capital management can improve the efficiency and

income of capital use, reduce the waste and idleness

of funds, enhance the overall operation ability of

enterprise funds, and form a virtuous circle of

funds.Second, unifying financial processes and

standards can improve the quality and comparability

of financial information, which is conducive to

decision-making.Because of the focus on a certain

business, it will improve the competitiveness of the

core business and improve the financial situation to a

certain extent in the short term. At the same time, it is

conducive to promoting the collaboration between the

financial department and the business department,

providing accurate financial support for the business

department, and effectively reducing the loss of

financial volume.

The disadvantages of the intensive strategy on the

financial aspects of the enterprise: first of all, the

investment in the early stage of construction is large.

Second, financial control is too strict, which affects

business flexibility. If there is a problem in the

information system, it will slow down the efficiency

of capital turnover, cause greater financial operation

risks, and affect the financial investment in the key

business of the enterprise.

4 ANALYSIS OF FACTORS

INFLUENCING FINANCIAL

MERITS

4.1 Differences in the Core

Competitiveness of Enterprises

In the diversification strategy, companies like

Meituan have established their own unique core

competitiveness due to their high market share of

multiple businesses and the fact that they are essential

to daily life, and will have more capital and resource

support, and it can make full use of its strong market

influence and huge cash flow to obtain financing, so

as to choose a diversification strategy.However, for

Evergrande, a relatively small enterprise, it only has

a main business of real estate and a lot of one-time

development business, and the financing is limited,

which may aggravate the risk of debt, coupled with

the depression of the real estate industry, Evergrande

Research on the Key Inﬂuencing Factors of the Difference in Financial Performance of Enterprises Under the Same Firm-Level Strategy: A

Case Study Based on Diversiﬁcation, Integration and Intensiﬁcation Strategies

287

Group instantly lost the core competitiveness of the

enterprise, which led to the rise of financial risks.

4.2 Differences in Enterprise

Characteristics

In the integration strategy, China Salt Jintan

Salinization Co., Ltd. is the head office of China Salt

Industry, on the one hand, it can get the state's policy

support, on the other hand, such a large enterprise has

the ability to integrate the upstream and downstream

of the industrial chain, through acquisition, to achieve

vertical integration. Its large business volume can

spread the cost and reduce the unit cost, thereby

improving the financial level.However, for example,

Enron is not large, coupled with internal fraud and

financial evacuation, resulting in its external inability

to have enough funds to acquire upstream and

downstream, and there are also difficulties in

management costs and resource allocation, so that the

implementation of the integration strategy fails.

4.3 Differences in Types of Business

Operations

In the intensive strategy, state-owned enterprises such

as the Northern Hubei Expressway have many

financing channels and low costs for the construction

and operation of public transportation, and can rely

on the advantages of their state-owned enterprises to

implement the intensive strategy to obtain economies

of scale and improve financial performance.But

manufacturing companies like Xpeng Motors need a

lot of capital to invest in equipment, R&D and other

fields, and their financial pressure is high, and their

market share is small, and financing is limited, which

is likely to be limited by insufficient funds to limit the

implementation of the strategy, affecting the financial

situation.

5 CONCLUSIONS

This paper mainly discusses the financial impact of

the same company-level strategy on different types of

companies through literature research and case

analysis, and finds that there is no situation where

choosing a certain strategy will necessarily improve

the financial level, and each strategy has its own

merits, and each enterprise should choose and

measure according to its own situation.For enterprises

that choose a diversification strategy, core

competitiveness is the main factor affecting the

financial strength of the enterprise.For enterprises

that choose an integration strategy, the characteristics

of the enterprise are the main factors affecting the

advantages and disadvantages of the company's

finances.For enterprises that choose an intensive

strategy, the type of business operation is the main

factor affecting the financial strength of the

enterprise.

The purpose of this study is to achieve the

practical significance of how to intuitively see the

impact of the same strategy on the financial of

different types of enterprises, and to let different types

of companies that choose the same strategy learn

from each other's management essence to improve

their financial level.

First, in terms of research methods, this paper

mainly adopts the literature analysis method and case

analysis method, and the number of cases and

literature that may be selected is insufficient and

subjective.The second is the research content, this

paper discusses the impact of strategy on finance

from the perspective of enterprises, but does not take

into account some special factors in enterprises (such

as employee behavior, the efficiency of the financial

department), etc.However, it is hoped that this study

can provide some reference and inspiration for

subsequent researchers when exploring similar

problems.

REFERENCES

Cui, D.N., 2024. The impact of diversification on corporate

profitability and financial risk. Time-honored Brand

Marketing, (14): 66-68.

Chen, Q., 2020. A brief discussion on the dilemma and

countermeasures of the integration of enterprise

industry and finance. China Collective Economy,

(29):74-75.

Douzi Kanche, Feb. 9, 2025. Xpeng motors' steel price gate:

Why has the direct purchase model become a hotbed of

corruption? Baijia

baijiahao.baidu.com/s?id=1823538391741827234

Huang, Y.Y., 2020. Research on financial risk control of

group enterprises under the background of

diversification strategy. Administrative Assets and

Finance, (19):102-103.

Ji, X.L., 2024. Construction practice of financial intensive

management system of China Railway No.2 Bureau

Shenzhen Company Finance & Accounting, (22):28-

33.

Li, C.B., 2003. From the bankruptcy of Enron Corporation

to discuss the strategy of enterprise mixed integration.

Journal of South China Agricultural University(Social

Science), (S1):83-86.

ICEML 2025 - International Conference on E-commerce and Modern Logistics

288

Li, J., 2025-03-20. Last year's continuous loss of 5.8 billion

Xiaopeng Motors in the fourth quarter of this year can

be realized. Yicai Daily, (A08).

Liu, L., 2021. Risk management of internet enterprises

under diversified business strategy: A case study of

Meituan. China Business Review, (09):12-15.

Legal Life Weekly. July 25, 2024. Northwest Hubei

Expressway Implements Financial Intensive Control to

Empower High-quality Development, Sohu

websitehttps://www.sohu.com/a/796069494_1211170

Ma, K.Y., 2017. The selection and development of

diversified enterprises under the influence of internal

and external effects: A case study based on Evergrande

Ice Spring. Modern Business, (25):176-177.

Sun, L.F., Zhou, Y.F., Zhong, H.L., 2022. Research on the

mechanism of green transformation and development

process of state-owned chemical enterprises: A case

study of the horizontal integration development of

Zhongyan Jintan. Journal of Changzhou University

(Social Sciences), 23(01):47-56.

Research on the Key Inﬂuencing Factors of the Difference in Financial Performance of Enterprises Under the Same Firm-Level Strategy: A

Case Study Based on Diversiﬁcation, Integration and Intensiﬁcation Strategies

289