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Negative Effects Of Diversification In The Hospitality Industries

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Analysis the Negative Effects of Diversification in the Hospitality Industries.




Diversification refers to a degree in which things, situations or people vary/ are different. Nevertheless, in the business world, diversification means expanding as a result of continued growth and development (Cho, 2013). Therefore, this means that a business can diversify either horizontally or upward which means that it can continue producing almost the same kind of goods/different kinds of goods but in the same production line and level or start a completely different product (Tanui, 2015). However, every business that needs to expand must have a clear understanding and know-how of its requirements and responsibilities especially when it comes to costs, financial status, availability of resources and its position in the market among other things. Nevertheless, diversification has got some negative and positive impacts towards the hospitality industry simply because of the industry’s growth and development with years (Martin, 2015).

For this report, I will analyze the negative effects only. The aim of this analysis is to get to understand the origin of these effects and the reason as to why they appear. Also, this proposal will be able to find out a way in which the industry can get hold of these negative impacts and make great changes with them in not only their business operations but also in the whole industry. This proposal is going to analyze every useful data for the purpose of finding a way to turn them into advantages instead of disadvantages or turn them into useful information rather than meaningless data.


Research Objectives

  • To analyze the effects of diversification on hospitality industry
  • To find out the degree at which the negative effects of diversification impact hospitality industry
  • To find out ways of managing diversification effects to the hospitality industry
  • To find out ways of turning the diversification effects to hospitality industry advantage

Research Approach

The research methodologies are the ways in which data is to be analyzed theoretically. Apparently, there are different kinds of researches (practical research and theoretical research) which use different techniques of analyzing the information. There are also different research methodologies which are classifies according to their researches, they include: Quantitative, qualitative, correlation or regression analysis and the Meta-Analysis methodologies. However, the research methodology, research questions, hypothesis and the research designs are all inter-related. This simply means that they go hand in hand to complement each other.

Reasons for the Recommended Approach

In this research am going to use both the qualitative and quantitative research methodologies. Both of these methodologies are usually very effective simply because they give highly reliable results. The qualitative research method is mostly used when the researcher is interested in knowing the obvious reasons as to why certain people behave in a certain way while others do not (Creswell et al, 2007). The quantitative always gives the reasonable level or degree at which the some people behave in a certain manner while others do not. For my research, by using both I will definitely know the reasons as to why and what causes the diversification effects, how to turn them to hospitality industry advantage and to what degree they really affect the industry.

Research Methodoly and Technique

Recommended Research Technique

This refers to data collection and analysis techniques. Data collection will be collected using interview and questionnaire administration. The interviews have been chosen as an appropriate method since it offers a chance for clarification of the data offered hence the researcher will be able to collect more reliable data. The questionnaires will offer enough time for the business person to give clarified answers though most of the illiterate people may not be able to fill (Creswell et al, 2007). It also may not offer a chance for explanation hence its combination with the interview will enable efficient and effective data collection. The interview will be done to business people who will not be able to answer the questionnaires. Both of these will help collect data even from business owners who do not speak the same language but can understand, or those can understand but cannot speak.



In determination of the sample size, the sample will be taken from business in the hospitality industry whether offering catering or hotel services. Also the business owners will be selected randomly after and from everywhere as far as they are willing to help in the research by sharing information.

The Sampling Design

The researcher will use random sampling for the purpose of completing this research. However, when using this kind of sampling technique, the researcher should ensure that every type of respondent is considered. This means that despite the gender, residential location, frequency of their buying, age, income level to name just but a few differences should be treated equally and to the best of his/her knowledge (Bryman et al, 2015). This will increase the chances of getting the right information from them because by doing this the researcher will be helping them feel comfortable and their opinions valued.

Implementation Plan

Random sampling design will be most effective because there will be no time to choose who to ask what and why. This will encourage equality and fair treatment of every respondent that the researcher will be able to get. Also, through sampling, the respondents will be in a position to give honest, correct, reliable and true answers to the questions that will be being asked. This is simply because no one will be aware or sure that they will be chosen. Random picking of businesses from anywhere gives the researcher a chance to collect the correct data (Williams, 2011). This is because the businesses will have no change to interfere or fabricate their responses since they will not be fully aware of whether they will be picked or not. Therefore, this method is simply the best for this kind of research because there are higher chances of getting the right information from the business owners and the business managers for analysis.


Also as mentioned earlier, the interviews will offer a chance for clarification of the questioned asked which gives the researcher an opportunity of collecting more reliable data and better explanations for the responses. An interview also allows a chance for the respondent to ask questions or for clarification whenever they may not understand the question. It gives a chance to offer an in depth data through probing. On the other hand, the questionnaires will offer enough time for the respondent to give clarified answers though most of the illiterate people may not be able to fill them (Creswell, 2012). However, it does not giver enough room for explanations hence limited responses and therefore not so much reliability on the data. It also may not offer a chance for explanation hence its combination with the interview will enable efficient and effective data collection.

Suggested Research Questions

  • What are the main negative effects that affect a hospitality business organization?
  • What do you think causes such kind of effects?
  • To what extent do they really cause an effect to the business growth and development rate?
  • What are the consequences that accrue to these effects?
  • What are the possible solutions that can be used to solve some of the effects?
  • For how long have you been experiencing the effects?
  • With the kind of effects and consequences mentioned above, how long do you think the business can deal with them?


  • Every research process must start with the identification of the topic which may take just one week.
  • Conducting a literature review in details which will give the researcher a deeper understanding of the topic which takes about at most four weeks.
  • Research questions formulation which takes one week to be complete.
  • The hypothesis testing done and the methodologies to be involved in the research chosen. The methodologies may contains things like the data sources, data collection methods and data analysis. This step may take more time e.g. six weeks because one has to analyze the data and understand the meaning of the results.

By doing all these, the researcher will find it to do his/her research and will take less time and costs less because they will have a good plan on what to do at what time.


I can recommend the researcher to carry out the research in a very highly populated area and especially one with many hospitality service offering businesses like in towns or cities. This may include businesses like hotels, motels, lodgings to name a few. This will increase the chances of the researcher getting more respondents who are experienced in speaking to strangers without finding it being a bother. Additionally, they will certainly get the most reliable information for analysis.



It is important for every researcher to follow the steps mentioned above to be able to succeed in their research. Also, every researcher should make sure that they are completely familiar with their research topic to enhance comfortability and research success as well as completion.



Cho, Y.S., 2013. The effect of business diversification on a firm’s performance, depending on its dynamic capabilities and market dynamism. Journal of Management and Strategy, 4(3), p.p1.

Yahya, M.Y., 2015. The development of strategic planning concept process model for small medium enterprise (SME) in the construction industry (Doctoral dissertation, University Tun Hussein Onn Malaysia).

Martin, C.J., 2015. Seeing the Unseen: Sense making as a Deliberate Strategy for Radical Innovation.

Rathjen, P., 2014. The Challenge of Organizational Complexity to Strategic Management.

Tanui, J.K., 2015. Interaction between information technology Capability, environmental conditions and Competitiveness of consultancy firms in Nairobi County, Kenya (Doctoral dissertation, Kenyatta University).

Nguyen Tran, T.N., 2014. A Framework for Understanding Physician Organizations' Orientation to Accountable Care Organizations (ACO).

Afza, T., Slahudin, C. and Nazir, M.S., 2008. Diversification and corporate performance: An evaluation of Pakistani firms. South Asian Journal of Management, 15(3), p.7.

Chakrabarti, A., Singh, K. and Mahmood, I., 2007. Diversification and performance: evidence from East Asian firms. Strategic Management Journal, 28(2), pp.101-120.

Bryman, A. and Bell, E., 2015. Business research methods. Oxford University Press, USA.

Creswell, J.W., 2012. Qualitative inquiry and research design: Choosing among five approaches. Sage publications.

Creswell, J.W. and Clark, V.L.P., 2007. Designing and conducting mixed methods research.

Williams, C., 2011. Research methods. Journal of Business & Economics Research (JBER), 5(3).


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