The Issues and Challenges of Diversification Strategy in Multiple Industries: The Case of Kental Bina Sdn. Bhd

Abstract

A diversification strategy is one of the means to expand business among corporations, including Small and Medium Enterprises (SMEs). In Malaysia, many successful stories of SMEs’ diversification strategies permit others to follow in their footstep. The success of the strategy allows businesses to develop not only locally but also venture into the international market. However, various issues and challenges could be associated with diversification strategy implementation particularly among SMEs within multiple industries involved. Therefore, this study aims to discover the issues and challenges faced by Kental Bina Sdn. Bhd., one of the steadily growing diversified businesses in Northern Peninsular Malaysia. This study employed a few rounds of one-on-one interviews with the business owner as the key informant to meet the study objective. The recorded interview sessions are then transcribed and analyzed using thematic analysis through the Nvivo12 software. From the policy viewpoint, this study sheds light on the development of entrepreneurial training programs. The training program conducted by the relevant ministries and government agencies, including the Ministry of Entrepreneur and Cooperatives Development (MECD), Majlis Amanah Rakyat (MARA), SME Corporation (SMECorp.), and Tekun Nasional (TEKUN), needs to be specifically designed to address the issues and challenges of business diversification particularly among SMEs. For practical implication, this study helps to offer important information and inputs among other businesses, particularly SMEs, on what to expect when starting their diversification planning and strategy.