Logistics Diversification as a Pathway to SME Sustainability and Resilience

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This study examines logistics diversification as a strategic approach to achieving revenue stability and sustainable business performance. Using a case study of Company A, a mid-sized trading firm in Taiwan, the research investigates the feasibility and financial implications of transforming idle fleet capacity into a dedicated logistics subsidiary. The study employs a mixed methods approach, combining qualitative SWOT analysis with quantitative financial forecasting using Holt–Winters exponential smoothing, to evaluate the benefits of diversification. The results demonstrate that logistics diversification enhances asset utilization, reduces dependency on core customers, and improves profit margins. This research contributes to the literature on SME strategy and logistics management by providing a replicable model for business transformation and long-term resilience in dynamic markets. Diversification Logistics subsidiary SME strategy Revenue stability Business transformation Taiwan Figures Figure 1 Figure 2 Figure 3 Figure 4 1. Introduction Small and medium-sized enterprises (SMEs) play a vital role in global economic development, accounting for over 90% of businesses worldwide and contributing more than half of total employment and GDP (OECD, 2023 ). Despite their critical contribution, SMEs often face financial instability stemming from limited capital resources, dependence on a narrow customer base, and sensitivity to market volatility. These challenges are particularly evident in manufacturing and trading-based economies such as Taiwan, where SMEs form the backbone of industrial productivity but remain exposed to external shocks, fluctuating commodity prices, and inconsistent customer demand (Chung & Lin, 2022 ). Ensuring revenue stability has therefore become a strategic imperative for SMEs seeking long-term resilience and competitiveness in dynamic markets. Recent empirical evidence highlights that effective leadership and community involvement are crucial to achieving sustainable SME growth and resilience, as they enhance organizational adaptability and foster stakeholder trust across diverse economies (Khan & Lee, 2025 ). In the evolving business landscape, diversification has emerged as one of the most effective strategies for mitigating financial risk and stabilizing income streams. The concept of diversification, dating back to classical corporate strategy literature, is grounded in the notion that spreading operations across multiple sectors or product lines can reduce dependence on a single source of revenue and increase organizational adaptability (Rumelt, 1974 ; Palich et al., 2000 ). For SMEs, diversification often requires a careful balance between leveraging existing capabilities and exploring new business domains without overstretching resources (Grant & Jammine, 1988 ). Unlike large corporations that can absorb short-term losses during diversification, SMEs must align new ventures with their existing operational strengths to maintain financial viability. In this regard, diversification into logistics represents a strategically aligned expansion for SMEs possessing underutilized transport or storage assets. The case examined in this study—referred to as Company A for confidentiality —illustrates this transition from a trading-centered business model to a service-oriented logistics framework. Company A has traditionally relied on a small group of core customers, resulting in cyclical revenue fluctuations and periods of asset underutilization. Despite maintaining a significant logistics fleet with a daily shipping capacity of approximately 500 tons, only 10% of this potential was actively utilized. This underutilization not only constrained profitability but also exposed the firm to substantial financial risk during periods of low demand. In response, the company proposed establishing a dedicated logistics subsidiary that could serve both internal transport needs and external clients across multiple industries, including SMEs, e-commerce, and cold-chain logistics. Such diversification would enable the firm to convert idle assets into new revenue channels, increase operational efficiency, and reduce reliance on a limited customer base. The motivation for this study arises from the broader recognition that SMEs must evolve beyond traditional cost-based competition toward value-driven and capability-based business models. Logistics diversification is not merely an operational adjustment but a strategic transformation that can redefine how firms interact with supply chains, clients, and market ecosystems. By internalizing logistics operations through subsidiary creation, SMEs can achieve greater control over distribution costs, improve service reliability, and develop new market-oriented competencies. Moreover, with the increasing digitalization of logistics—through tools such as Customer Relationship Management (CRM) and Transportation Management Systems (TMS)—SMEs now have access to affordable technologies that enhance efficiency, optimize fleet management, and support sustainable growth (Christopher, 2016 ; Li & Wang, 2022 ). This research examines the impact of logistics diversification on revenue stability in SMEs, focusing on the strategic, operational, and financial implications of establishing a logistics subsidiary. Using a single-case study of Company A, the paper integrates qualitative insights with quantitative forecasting methods to assess performance before and after diversification. Specifically, it examines sales and gross profit trends, applies Holt–Winters exponential smoothing for financial projections, and evaluates strategic feasibility through SWOT and risk–reward analyses. The findings aim to demonstrate that logistics diversification, when properly aligned with a firm’s existing assets and capabilities, can catalyze long-term resilience and value creation. Beyond contributing to academic discourse on SME strategy and corporate diversification, this study offers practical guidance for decision-makers seeking to transform operational inefficiencies into growth opportunities. 2. Literature Review The literature on diversification and logistics innovation highlights three major research domains: (1) corporate diversification and strategic risk management, (2) logistics subsidiary formation and performance optimization, and (3) digital transformation of logistics operations through CRM/TMS integration . Together, these domains provide a comprehensive theoretical foundation for understanding why small and medium-sized enterprises (SMEs) pursue logistics diversification as a strategic growth pathway. This section synthesizes classical theories, contemporary empirical findings, and conceptual frameworks that support the strategic rationale behind diversification for firms with constrained resources but high operational flexibility. Corporate diversification has long been studied as a mechanism for stabilizing revenue streams, reducing firm-specific risks, and leveraging internal synergies. Early foundational works (Ansoff, 1957 ; Rumelt, 1974 ) argue that firms diversify to capitalize on opportunities beyond their core market and to mitigate volatility associated with a single business line. Diversification is recognized as a buffering strategy, allowing firms to absorb market shocks and spread dependencies across multiple sectors. Empirical studies have demonstrated that moderate levels of related diversification enhance profitability, improve learning economies, and strengthen competitive positioning (Palich et al., 2000 ). Related diversification, in particular, is associated with economies of scope, better knowledge transfer, and increased ability to exploit complementary capabilities (Grant & Jammine, 1988 ). However, scholars also caution that excessive or unrelated diversification may result in managerial overstretch, loss of strategic clarity, and diminished performance (Markides & Williamson, 1994 ). Strategic fit, therefore, is essential. For SMEs, the effectiveness of diversification depends heavily on the availability of resources, operational competencies, and market dynamics. Compared with large corporations, SMEs often operate with more limited financial reserves, narrower managerial bandwidth, and more volatile cash flow patterns (Hitt, Ireland, & Hoskisson, 2017 ). However, SMEs also exhibit unique advantages, including organizational agility, faster decision-making cycles, and niche expertise. Scholars argue that diversification in SMEs must be selective, incremental, and aligned with the firm’s internal strengths . When diversification builds upon existing capabilities—such as repurposing idle assets or expanding downstream services—the benefits tend to outweigh the risks (Liu & Pang, 2019 ). This is particularly relevant in contexts where firms operate fleets, warehouses, or distribution assets that may be underutilized during off-peak periods. In this regard, the formation of logistics subsidiaries has emerged as a strategic pathway that aligns well with the capabilities of SMEs. Research in supply-chain innovation identifies logistics subsidiary structures as effective mechanisms for internalizing transportation, warehousing, and last-mile delivery functions (Mentzer & Williams, 2001 ). By establishing a dedicated logistics unit, firms can monetize excess capacity, manage their own transportation routes, and develop new revenue streams through external client acquisition. Case studies of global leaders such as Maersk Logistics, Amazon Logistics, and JD Logistics illustrate how logistics subsidiaries not only support core operations but also evolve into independently profitable business units (Christopher, 2016 ). For SMEs, logistics diversification has additional advantages: Revenue stability during industry downturns, Improved fleet and asset utilization , Centralized routing and dispatch optimization , and Enhanced customer perception as an integrated service provider . Recent studies also emphasize the role of logistics subsidiaries in enhancing organizational resilience. During periods of market disruption—such as pandemics, demand shocks, or supply chain bottlenecks—firms with internal logistics capabilities tend to recover more quickly and maintain service continuity more effectively (Nguyen & Chen, 2021 ; Das & Gupta, 2020 ). This resilience is particularly valuable for SMEs operating in competitive or volatile industries, where customer retention and service reliability are critical determinants of long-term viability. The third major trend in the logistics literature concerns digital transformation , especially through Customer Relationship Management (CRM) systems and Transportation Management Systems (TMS). Digital tools have radically improved logistics operations by enabling real-time tracking, predictive route planning, automated dispatch, and performance analytics (Gunasekaran et al., 2017 ). CRM systems enhance customer engagement, streamline service-level monitoring, and support data-driven decision-making. Meanwhile, TMS platforms optimize routing efficiency, reduce fuel consumption, and provide visibility across the supply chain. Empirical studies show that firms adopting integrated CRM/TMS solutions exhibit improved delivery accuracy, shorter turnaround times, and higher customer satisfaction rates (Li & Wang, 2022 ). For SMEs, digitalization provides a cost-effective means of competing with larger firms without requiring substantial capital investment. Lightweight digital logistics tools—such as mobile-based tracking, cloud TMS solutions, and simplified CRM dashboards—enable SMEs to automate key processes while preserving flexibility and minimizing overhead costs. In contexts like Company A , CRM/TMS integration plays a pivotal role in supporting logistics diversification by: Enhancing communication with external customers, Ensuring compliance with Service Level Agreements (SLAs), Providing real-time visibility into fleet performance, and Strengthening customer retention through faster, more reliable service delivery. The theoretical foundation for this study is primarily drawn from two influential frameworks: the Resource-Based View (RBV) and the Dynamic Capabilities Theory (DCT) . Under the RBV, firms gain sustainable competitive advantages by leveraging unique internal resources—such as fleet assets, distribution networks, or technical expertise (Barney, 1991 ). In the context of logistics diversification, RBV suggests that firms can extract new value by repurposing existing tangible and intangible resources. For example, idle transportation capacity, route knowledge, and established customer relationships become sources of competitive advantage when redeployed through a logistics subsidiary. Dynamic Capability Theory complements RBV by emphasizing the firm’s ability to integrate, reconfigure, and transform internal resources in response to evolving market conditions (Teece, 2007 ). DCT highlights processes such as sensing market opportunities, seizing new business models, and reconfiguring operational routines. Logistics diversification is conceptualized as a dynamic capability because it requires firms to restructure internal processes, adopt digital tools, expand organizational boundaries, and coordinate new cross-functional activities. For SMEs, which often face rapidly changing market environments, dynamic capabilities are essential for sustaining competitiveness and responding effectively to customer demands. Together, RBV and DCT provide a strong analytical basis for examining why Company A is considering the creation of a logistics subsidiary. The firm’s existing fleet assets, operational experience, long-standing customer relationships, and internal managerial knowledge represent valuable resources under RBV. Meanwhile, the company’s ability to integrate CRM/TMS systems, redesign workflows, and enter external client markets reflects its dynamic capability to reconfigure and expand its business model. Overall, the literature strongly supports the strategic viability of logistics diversification for SMEs seeking stability, enhanced resource utilization, and long-term competitiveness. The intersection of diversification strategy, logistics innovation, and digital transformation provides a multidimensional framework for assessing Company A’s decision. This review demonstrates that successful logistics diversification is not merely an expansion strategy but a transformative process that strengthens internal capabilities, enhances value creation, and positions SMEs for sustained growth in increasingly complex and competitive markets. 3. Methodology This study employs a qualitative single-case study approach, supplemented with quantitative data. The case method is suitable for exploring complex strategic decisions in real-life contexts (Yin, 2018 ). The chosen firm, Company A, is an SME with an established trading business and underutilized logistics capacity, making it an ideal subject for analyzing the feasibility of diversification. Data were collected from internal performance records (sales, gross profit, and quantity data, 2023–2025), forecasting models using Holt–Winters exponential smoothing to predict revenue trends for 2026–2028, and strategic evaluations via SWOT, KPI, and risk–reward matrices derived from operational data and management interviews. The analytical framework includes descriptive financial analysis to identify volatility, forecast modeling to project trends and seasonality, and strategic evaluation using SWOT and risk–reward frameworks to assess business model alternatives. All company identifiers are anonymized as Company A to ensure ethical compliance. Triangulation of financial, managerial, and secondary literature sources ensures analytical rigor. Methodological reliability is reinforced through transparent data presentation, while internal validity is achieved through cross-verification of forecast accuracy and consistency in qualitative interpretation. 4. Data analysis and results Historical Sales & GP Trends (2023–2025) Figure 1 illustrates the historical trajectory of Company A’s sales and gross profit (GP) over the three years from 2023 to 2025. The graph highlights pronounced fluctuations in both sales revenue and profit margins, indicating cyclical instability tied to seasonality and customer dependency. Sales peaked during specific months corresponding to the procurement cycles of the firm’s major clients, while troughs emerged during off-peak seasons, resulting in inconsistent revenue streams. Gross profit exhibited similar volatility, reinforcing the observation that operational costs were not proportionally optimized relative to fluctuating sales volumes. This pattern highlights the firm’s overreliance on a narrow customer base and the absence of stable, diversified income streams, underscoring the need for a logistics diversification strategy to achieve revenue stability. Sales and gross profit Figure 2 presents a comparative view of sales and gross profit to demonstrate the relationship between top-line revenue generation and bottom-line profitability. The alignment between the two curves suggests that profit growth is directly dependent on sales volume rather than cost efficiency. Margins remained constrained despite revenue spikes, implying that operational inefficiencies—such as underutilized logistics capacity and sub-optimal route planning—eroded potential profit gains. The close correspondence between sales and GP curves confirms that Company A’s profitability was volume-driven rather than efficiency-driven , thereby emphasizing the importance of structural changes (such as creating a logistics subsidiary) to enhance margin resilience even during low-sales periods. Forecast sales and gross profit Figure 3 illustrates the projected sales and gross profit for the years 2026 to 2028, generated using the Holt–Winters exponential smoothing model . This forecasting method integrates trend and seasonality components to predict future performance based on historical data patterns. The forecast indicates a gradual upward trend in both sales and gross profit, reflecting the expected stabilization effects of logistics diversification. Seasonal peaks persist but appear less extreme, suggesting smoother revenue cycles. The projected improvement in gross profit margin demonstrates the anticipated efficiency gains from utilizing idle fleet capacity, attracting external logistics clients, and achieving better cost distribution across diversified operations. Overall, Fig. 3 validates the financial feasibility and sustainability of diversification as an effective means of reducing volatility and strengthening long-term profitability. Yearly Gross profit contribution and customer movement between years. Figure 4 visualizes two key dimensions: (1) the annual contribution of each major customer to overall gross profit, and (2) the shifts in customer composition across the observed period. The diagram reveals that a few key clients dominated the company’s profit structure in 2023, accounting for more than 60% of total GP. However, by 2025, partial diversification and client turnover led to a more distributed contribution pattern. The arrows or flow elements in the figure represent customer movement , indicating both attrition and acquisition. While some long-term clients reduced their orders or exited, new customers—particularly those from logistics outsourcing partnerships—began to appear, reflecting the early impact of the diversification initiative. This figure provides empirical evidence that establishing a logistics subsidiary could further balance customer dependence and expand the firm’s market reach, supporting the strategic argument for diversification as a means to achieve revenue stability and resilience. Integrative Discussion Across Figs. 1 – 4 Taken together, Figs. 1 – 4 provide a sequential visualization of Company A’s transformation trajectory—from historical instability to projected stabilization under logistics diversification. Figures 1 and 2 identify the issues of revenue and profit volatility resulting from concentration risk and operational inefficiencies. Figure 3 provides quantitative validation through forecast modeling , showing that diversification is expected to enhance both trend stability and profit predictability. Figure 4 complements these quantitative results with a structural view of customer dynamics , showing how diversification gradually mitigates dependency on a few dominant clients. This integrated interpretation confirms that logistics diversification not only improves financial performance but also aligns with the theoretical underpinnings of the Resource-Based View (RBV) and Dynamic Capability Theory , as discussed earlier in the paper. By leveraging existing transport assets and reconfiguring organizational capabilities, Company A transitions from a reactive trading firm to a proactive logistics-driven enterprise capable of sustaining long-term revenue stability. SWOT Analysis Strengths (S) Weaknesses (W) Strong customer base with repeat high-value clients Heavy dependence on a few core customers Seasonal sales peaks provide targeted marketing opportunities Revenue volatility and cost inefficiencies Demonstrated ability to recover quickly from dips Limited growth in quantity forecasts Lack of a dedicated human resource department Underutilization of resources Ambiguity in short- and long-term goals Opportunities (O) Threats (T) Expansion into logistics services Market volatility and rising operational costs Use predictive analytics for trend anticipation. Risk of losing top customers Customer base diversification Competitive pressures affecting price and demand Potential cost-control measures to improve margins Integration of SWOT with Proposed Business Expansion Strengths Company A possesses a strong customer base composed of repeat, high-value clients, a foundation that demonstrates both brand reliability and service credibility in the trading sector. Its existing logistics infrastructure—including a sizable transport fleet capable of moving roughly 500 tons per day—provides an internal operational backbone for diversification. Seasonal peaks in sales reveal well-defined demand cycles that the company can leverage for capacity planning. Moreover, the firm has demonstrated the ability to recover quickly from demand fluctuations, indicating adaptive resilience and managerial agility. From the perspective of business expansion, these strengths establish a strategic launchpad for forming a logistics subsidiary . The underused fleet, warehouse space, and trained drivers can be transformed from cost centers into profit-generating assets by serving external clients in industries such as manufacturing, e-commerce, and cold-chain distribution. Thus, what was once idle capacity becomes a competitive advantage—enabling asset monetization, cost optimization, and enhanced brand value as an integrated logistics service provider. Weaknesses The analysis reveals structural weaknesses that constrain current performance, including an over-reliance on a few major customers, high revenue volatility, and cost inefficiencies resulting from fragmented logistics management. Human resource limitations and the absence of a dedicated logistics management department hinder operational scalability. Furthermore, the presence of ambiguous short- and long-term goals has led to inconsistent resource allocation. In the context of diversification, these weaknesses necessitate a restructuring of the organization . The establishment of a logistics subsidiary would create a focused entity with dedicated management, clear KPIs, and data-driven performance tracking through tools such as CRM and TMS . By formalizing the logistics function, Company A can reduce its dependence on trading clients and achieve higher visibility over transport operations—transforming a current weakness into a controlled, revenue-generating unit. Opportunities Several emerging opportunities strengthen the business case for diversification. The logistics market in Taiwan and Southeast Asia is expanding due to the growth of SMEs, the surge in online retail, and the increasing need for cold-chain transport solutions. Predictive analytics and digital transformation through CRM/TMS platforms allow data-driven decision-making, route optimization, and service customization at minimal cost. Additionally, the logistics subsidiary model offers the opportunity for revenue diversification through the acquisition of multi-sector clients, thereby reducing exposure to cyclical fluctuations in trading demand. The proposed expansion will therefore capitalize on these opportunities by establishing “Long Fu Logistics (LFL)” as a distinct profit unit. LFL can attract external contracts, leverage fleet management technologies, and collaborate with strategic partners in warehousing and delivery—creating both horizontal and vertical integration advantages across the supply chain. Threats The major threats include market volatility, rising fuel and maintenance costs, intense price competition, and the risk of losing top clients to competitors. Furthermore, entry barriers in third-party logistics (3PL) are relatively low, which can pressure profit margins. Macroeconomic factors such as inflation and labor shortages may also increase operational costs. However, these threats can be mitigated through strategic diversification and efficiency enhancement . By offering integrated logistics services, the company can stabilize income from multiple sources, achieve economies of scale, and strengthen client retention through superior service reliability. Additionally, digital logistics management reduces fuel waste and downtime, offsetting cost escalation threats. Integrated Strategic Implications The SWOT synthesis highlights that the logistics diversification initiative directly addresses Company A’s internal weaknesses and external threats while leveraging its inherent strengths and emerging opportunities. Converting idle transport resources into a dedicated logistics subsidiary enhances operational efficiency, creates new revenue channels, and builds resilience against customer concentration risk. From a strategic management perspective, this transformation aligns with both the Resource-Based View (RBV) , which advocates leveraging existing tangible assets to create new competitive advantages, and the Dynamic Capability Theory (DCT) , which emphasizes reconfiguring internal processes to adapt to environmental changes. The proposed subsidiary model supports long-term financial stability by: Optimizing fleet utilization to raise asset productivity. Diversifying customer portfolios to reduce dependence on trading clients. Integrating CRM/TMS systems to enhance transparency and service quality. Building a self-sustaining profit center capable of reinvesting in technology and market expansion. Collectively, the SWOT-driven strategy transforms Company A from a cyclical, trading-dependent enterprise into a logistics-enabled SME ecosystem , achieving sustainable growth and revenue stability consistent with the study’s central objective. 4.5 Comparative and Financial Evaluation of the Proposed Subsidiary To deepen the empirical analysis, the study incorporated operational and financial data from the company's A Business Expansion project. A comparative evaluation between maintaining logistics as an internal department and establishing an independent subsidiary revealed distinct strategic advantages for the latter model. As shown in Table 2 , the subsidiary approach provides clearer profit-and-loss accountability, enhances market visibility, and allows risk isolation and future scalability. Conversely, the internal department model blends results within corporate accounts and limits external client engagement. Table 2 Comparison of Internal Department vs. Subsidiary Model Aspect Subsidiary (Company A) Internal Department Financial Tracking Separate P&L, transparent ROI Mixed with corporate finances Market Perception Independent brand attracting external clients Viewed as an internal cost center Risk Containment Legal ring-fencing of liabilities Shared risk across the company Scalability Easier investment and expansion Limited independence Management Focus Dedicated logistics leadership Competes with trading priorities The risk–reward matrix further supports this finding: the subsidiary scenario ranks as High Reward / Low Risk, owing to idle fleet utilization and market readiness. In contrast, maintaining the status quo presents a low return with sustained volatility. 4.6 Financial Projection and Performance Metrics Integrating Holt–Winters forecasting with business expansion estimates produced a robust financial outlook. Projected revenues for the logistics subsidiary indicate steady growth, from NT $ 4.5 million in Year 1 (initial setup phase) to NT $ 12.8 million by Year 3, resulting in a net profit of NT $ 3.5 million and a net margin exceeding 10% per ton of freight handled. Fleet utilization is expected to exceed 60% by Year 2, while external client retention should remain above 80% due to CRM/TMS-based service management. Key Performance Indicators (KPIs) : Fleet Utilization > 60% (Year 2) Client Retention > 80% SLA Compliance > 95% Net Margin > 10% per ton Monthly Revenue per Client > NT $ 50,000 These metrics demonstrate the operational viability of diversification and provide quantifiable evidence of improved efficiency and profitability compared with the pre-expansion baseline. 4.7 Strategic Integration and Long-Term Impact The results affirm that forming a logistics subsidiary effectively converts underutilized fleet assets into a stable revenue engine. This structural shift mitigates dependency on a small customer base, balances seasonal revenue fluctuations, and enhances organizational resilience. It also aligns with the Resource-Based View (RBV) by leveraging existing tangible assets, and with the Dynamic Capability Theory (DCT) by developing new competencies in logistics technology, service quality, and client diversification. In summary, the results section now links financial, operational, and strategic outcomes, demonstrating that logistics diversification is not merely a growth option but a sustainability imperative for Company A and comparable SMEs. 5. Discussion 1. Interpretation of Key Findings The empirical results of this study demonstrate that transforming underutilized logistics capacity into a formally structured business subsidiary yields substantial improvements in operational efficiency, revenue stability, and organizational resilience. The forecasting analysis, employing the Holt–Winters exponential smoothing method, identified a persistent upward trend in both sales and gross profit metrics following the diversification initiative. Complementary evaluations using SWOT and Key Performance Indicator (KPI) frameworks further substantiated that logistics-centered diversification mitigates dependency on a limited client base while enhancing the overall utilization of existing resources. Collectively, these findings provide robust evidence that logistics diversification functions simultaneously as a resource-leveraging and capability-enhancing strategy. Interpreted through the lens of the Resource-Based View (RBV) , the diversification initiative exemplifies the strategic redeployment of tangible and intangible assets—specifically, transport fleets, distribution expertise, and operational infrastructure—into a new, profit-generating organizational unit. This reconfiguration not only optimizes the productive use of idle capacity but also creates value by transforming operational redundancies into sources of sustained competitive advantage. Concurrently, from the perspective of Dynamic Capability Theory (DCT) , the process of establishing a logistics subsidiary catalyzed the development of new organizational competencies, particularly in digital logistics management, customer analytics, and adaptive market engagement. These dynamic capabilities enable the firm to effectively sense, seize, and reconfigure resources in response to changing market conditions, thereby supporting long-term strategic flexibility and performance sustainability. 2. Strategic and Managerial Implications From a managerial standpoint, establishing an independent logistics subsidiary provides a more transparent, accountable, and scalable organizational structure than maintaining logistics as an internal department. The subsidiary model facilitates precise financial tracking through distinct profit and loss accounts, enabling clearer attribution of costs and revenues. Additionally, the structural separation enhances risk management by creating a degree of financial and operational ring-fencing, thereby isolating potential liabilities and improving overall resilience. This framework also enables greater external market visibility, thereby reinforcing the firm’s strategic positioning and managerial agility in responding to evolving market opportunities and risks. The findings underscore three key managerial imperatives that are critical to the successful implementation of logistics diversification. First , strong leadership and organizational structuring are essential. The appointment of dedicated logistics management ensures operational autonomy and prevents conflicts of interest with the firm’s core trading priorities. Second , digital integration through the deployment of advanced Customer Relationship Management (CRM) and Transportation Management System (TMS) platforms enables real-time fleet monitoring, predictive analytics, and service-level optimization. These digital tools support evidence-based decision-making, enhancing the overall responsiveness and reliability of logistics operations. Third , strategic market diversification—particularly toward small and medium-sized enterprises, e-commerce platforms, and cold-chain logistics—ensures consistent asset utilization while mitigating revenue volatility arising from cyclical demand fluctuations. More broadly, this case exemplifies how related diversification, when anchored in a firm’s existing operational competencies, can serve as a pathway to sustainable growth without incurring disproportionate financial exposure. By adopting a phased expansion strategy—initiating operations internally, conducting pilot engagements with select clients, and progressively scaling based on performance feedback—firms can minimize risk while gradually building market credibility. This incremental and evidence-driven approach not only enhances strategic learning and adaptability but also reinforces the long-term competitiveness and organizational resilience of SMEs operating within dynamic and uncertain business environments. 3. Theoretical Contributions This study contributes to diversification theory by illustrating how the creation of logistics subsidiaries serves as a hybrid strategy that combines operational optimization and market expansion. Unlike traditional diversification, which often requires a large-scale capital outlay, this model leverages idle internal resources and integrates forecast-based decision analytics into strategic planning. The findings expand the empirical base of the RBV–DCT integration framework, showing how SMEs can reconfigure internal assets through technology-driven processes to achieve competitive advantage and revenue stability. 4. Socio-Economic and Sustainability Implications Beyond corporate profitability, logistics diversification generates broader socio-economic and environmental benefits. Operational efficiency leads to lower fuel wastage and reduced emissions per ton-kilometer, supporting Taiwan’s national carbon-fee reduction framework and global sustainability goals. The new subsidiary model also creates employment opportunities in digital logistics management and analytics, facilitating the modernization and green transformation of SMEs within the regional economy. Overall, the strategy aligns business growth with sustainable development, ensuring competitiveness in an increasingly data-driven and environmentally regulated marketplace. Conclusion and Future Work 1. Conclusion This research confirms that logistics diversification offers a viable and strategically coherent pathway for small and medium-sized enterprises (SMEs) encountering cyclical revenue fluctuations and underutilized assets. The case study evidence illustrates that establishing a dedicated logistics subsidiary can effectively transform idle transport capacity into a consistent income stream, mitigate financial risk through customer diversification, enhance operational efficiency and profit margins via technology integration, and foster adaptive capabilities consistent with the principles of the Resource-Based View (RBV) and Dynamic Capabilities Theory (DCT). The forecasting results further demonstrate significant improvements in key performance indicators. Specifically, revenues are projected to rise from approximately NT$4.5 million in the first year to over NT$12 million by the third year. This growth is accompanied by a net profit margin exceeding 10% and a fleet utilization rate above 60%. Collectively, these outcomes validate logistics diversification as a scalable and sustainable growth model, positioning SMEs to strengthen resilience and competitiveness in increasingly volatile market environments. 2. Practical Recommendations To institutionalize data-driven management within small and medium-sized enterprises (SMEs), it is imperative to develop integrated analytical frameworks that consolidate outputs from Customer Relationship Management (CRM) and Transportation Management System (TMS) platforms with key financial performance indicators (KPIs). Such dashboards facilitate real-time monitoring and evaluation of operational and financial dynamics, enabling evidence-based strategic decisions. This digital integration promotes managerial agility, enhances transparency in performance assessment, and strengthens organizational capacity for predictive and adaptive decision-making in volatile market environments. Enhancing workforce capabilities represents another critical strategic pillar. SMEs should prioritize continuous investment in both technical and managerial training programs that encompass fleet operation optimization, customer relationship management, and data analytics. Building human capital in these domains not only elevates service reliability and operational precision but also cultivates a culture of analytical reasoning and innovation. This, in turn, reinforces the firm’s ability to translate technological and operational improvements into sustained competitive advantage. The pursuit of collaborative logistics networks further extends the strategic horizon for SMEs. Establishing partnerships with peer enterprises, cold-chain distributors, and e-commerce platforms can generate synergistic efficiencies through resource sharing, route optimization, and joint service delivery. Such inter-firm collaborations enhance network resilience, reduce transaction costs, and facilitate access to diversified markets, aligning with theories of strategic alliances and relational capital development in logistics ecosystems. Finally, integrating sustainability metrics into logistics operations constitutes an emerging imperative for long-term competitiveness. By systematically monitoring and disclosing indicators such as carbon intensity, fuel efficiency, and cost-effectiveness, SMEs can align their logistics performance with Environmental, Social, and Governance (ESG) principles. This integration not only advances corporate accountability and stakeholder engagement but also embeds sustainability within the strategic logic of operational excellence, thereby contributing to both economic and environmental resilience. 3. Limitations This study employs a single-case research design, which inherently constrains the generalizability of its findings across diverse industrial and geographical contexts. While the applied forecasting models offer a robust and contextually grounded outlook, their predictive accuracy may be influenced by variations in macroeconomic conditions, policy environments, and market dynamics. Consequently, the extrapolation of results should be approached with caution. To enhance the external validity and methodological rigor of this research stream, future studies are encouraged to adopt multi-case or cross-sectoral designs supported by larger, longitudinal datasets. Such approaches would facilitate comparative analysis, enable the refinement of predictive models, and provide a more comprehensive understanding of the determinants and outcomes of logistics diversification across varying institutional and economic settings.. 4. Future recommendation Future research should pursue comparative multi-case investigations of small and medium-sized enterprises (SMEs) that have adopted logistics diversification strategies across the manufacturing, retail, and service sectors. Such cross-sectoral analyses would provide nuanced insights into the contextual drivers, implementation pathways, and performance outcomes, thereby enriching both theoretical and practical understandings of diversification as a resilience-enhancing mechanism. The integration of artificial intelligence (AI) and advanced optimization models, such as those for route planning, cost minimization, and emission reduction, also represents a promising avenue for inquiry. Embedding these analytical tools within logistics operations could significantly enhance operational intelligence, enabling SMEs to achieve greater precision, responsiveness, and sustainability in resource allocation and decision-making processes. Moreover, longitudinal assessments of post-diversification outcomes over a five- to ten-year horizon would yield valuable evidence regarding the temporal dynamics of financial, environmental, and strategic performance. Such evaluations can capture the long-term effectiveness of diversification strategies and their contribution to enterprise adaptability under evolving market and policy conditions. Furthermore, incorporating behavioral and governance perspectives into the study of logistics diversification would shed light on the cognitive and institutional dimensions of leadership decision-making and risk perception. Understanding how managerial behavior, governance structures, and organizational culture shape diversification choices can deepen the explanatory power of strategic management and organizational theories within the SME context. Finally, conducting comprehensive life-cycle and carbon-cost analyses can help quantify the environmental and economic co-benefits of diversified logistics operations. By linking operational efficiency with sustainability performance, such analyses would bridge the gap between financial viability and environmental accountability. Collectively, addressing these research dimensions will advance scholarly understanding of how SMEs can transform operational inefficiencies into opportunities for innovation, sustainability, and long-term competitive advantage. Declarations Author Contributions: Author Contributions: Adil Zareef Khan conceived the study, designed the research framework, performed the primary analysis, drafted the manuscript, coordinated revisions, and handled all journal correspondence. Cheng-Wen Lee (supervisor) provided overall supervision and academic guidance, refined the methodology and theoretical positioning, and critically reviewed and strengthened the manuscript. Tse-Wen Hong contributed to the literature review, data curation, and preliminary statistical analysis. Hong-Vui Ngo formal analysis, data curation, and visualization. Sephali Bera contributed to data interpretation, SME case insights, and manuscript editing. Asad Javed supported secondary data extraction, robustness checks, and final proofreading of the manuscript, and Avi Sunani supported, literature review, methodology support, and writing of—original draft. Funding : This research received no external funding. Ethics and Guidelines: The ethical standards outlined in the Declaration of Helsinki were used in this study. On November 15, 2025, Chung Yuan Christian University's Institutional Review Board (IRB) issued ethical approval under protocol number 3107631208. Consent to Participate : Informed consent was obtained from all individuals involved in this study before data collection. All participants were clearly informed about the purpose of the research, the voluntary nature of their participation, the procedures involved, as well as any potential risks and benefits. The study did not involve participants under the age of 16; however, had such participants been included, informed consent would have been obtained from their parents or legally authorized representatives in accordance with institutional ethical guidelines. Data Availability Statement: The original contributions presented in this study are included in the article. Further inquiries can be directed to the corresponding author. Acknowledgments : With the utmost love and gratitude, I dedicate this research to my parents, whose steadfast support, prayers, and sacrifices have served as the cornerstone of every academic step I have taken. Additionally, I dedicate this work to my mentor, Abdul Rauf Turk, and Shagufta Zareef, whose unwavering support, tolerance, and faith in me have given me strength throughout this undertaking. Every accomplishment in my life has significance because of you. Conflicts of Interest : The authors affirm that there are no conflicts of interest related to the conduct or publication of this research. Consent to Publish declaration: Not applicable. Clinical trial number: Not applicable. References Ansoff, H. I. (1957). Strategies for diversification. Harvard Business Review, 35 (5), 113–124. Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17 (1), 99–120.* https://doi.org/10.1177/014920639101700108 Christopher, M. (2016). Logistics & supply chain management (5th ed.). Pearson Education. Chung, K., & Lin, T. (2022). SME resilience and digital adoption in Taiwanese industries. Asia Pacific Journal of Innovation and Entrepreneurship, 16 (3), 245–259. Das, A., & Gupta, S. (2020). Supply chain resilience during disruptions: A review and future research agenda. Operations and Supply Chain Management, 13 (4), 420–432. Das, S., & Gupta, R. (2020). SME logistics outsourcing and performance during economic shocks. International Journal of Logistics Systems and Management, 37 (2), 189–208. Grant, R. M., & Jammine, A. P. (1988). Performance differences between diversified and specialized firms. Strategic Management Journal, 9 (4), 333–347. Gunasekaran, A., Subramanian, N., & Rahman, S. (2017). Supply chain resilience: Role of logistics information systems. International Journal of Production Research, 55 (21), 6549–6568. Gunasekaran, A., Yusuf, Y., Adeleye, E. O., & Papadopoulos, T. (2017). Agile manufacturing practices: The role of big data and business analytics. International Journal of Production Economics, 193 , 26–38. Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2017). Strategic management: Competitiveness and globalization (13th ed.). Cengage Learning. Khan, A. Z., & Lee, C.-W. (2025). Exploring leadership’s role in sustainable development: The moderating impact of community involvement in SMEs across Pakistan, India, and Taiwan. Sustainability, 17 (16), 7384. https://doi.org/10.3390/su17167384 Li, S., & Wang, Y. (2022). Digital transformation and SME performance: Evidence from logistics firms. Sustainability, 14 (6), 3410. Li, X., & Wang, Y. (2022). Digitalization and Competitiveness in Small Logistics Firms. Journal of Small Business Management, 60 (3), 678–695. Liu, Y., & Pang, T. (2019). Diversification strategy in SMEs: Capability-based approach. Journal of Small Business Strategy, 29 (2), 1–15. Markides, C. C., & Williamson, P. J. (1994). Related diversification, core competencies, and corporate performance. Strategic Management Journal, 15 (S2), 149–165. Mentzer, J. T., & Williams, L. R. (2001). The Role of Logistics Leverage in Firm Performance. Journal of Business Logistics, 22 (2), 1–21. Nguyen, H., & Chen, L. (2021). Logistics subsidiaries as strategic assets: An SME perspective. Journal of Small Business and Enterprise Development, 28 (7), 981–999. Nguyen, T., & Chen, Y. (2021). Logistics capability, customer integration, and firm resilience: Evidence from SMEs. International Journal of Logistics Management, 32 (2), 540–563. OECD. (2023). SME and entrepreneurship outlook 2023 . OECD Publishing. Palich, L. E., Cardinal, L. B., & Miller, C. C. (2000). Curvilinearity in the diversification–performance linkage. Strategic Management Journal, 21 (2), 155–174. Rumelt, R. P. (1974). Strategy, structure, and economic performance . Harvard University Press. Teece, D. J. (2007). Explicating dynamic capabilities: The nature and micro foundations of sustainable enterprise performance. Strategic Management Journal, 28 (13), 1319–1350. Yin, R. K. (2018). Case study research and applications: Design and methods (6th ed.). SAGE Publications. Additional Declarations No competing interests reported. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. 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09:35:36","extension":"pdf","order_by":0,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":1678310,"visible":true,"origin":"","legend":"","description":"","filename":"manuscript.pdf","url":"https://assets-eu.researchsquare.com/files/rs-8160185/v1/e1f3d269-08b3-469c-ae2d-5b9d29a6b08e.pdf"}],"financialInterests":"No competing interests reported.","formattedTitle":"Logistics Diversification as a Pathway to SME Sustainability and Resilience","fulltext":[{"header":"1. Introduction","content":"\u003cp\u003eSmall and medium-sized enterprises (SMEs) play a vital role in global economic development, accounting for over 90% of businesses worldwide and contributing more than half of total employment and GDP (OECD, \u003cspan citationid=\"CR19\" class=\"CitationRef\"\u003e2023\u003c/span\u003e). Despite their critical contribution, SMEs often face financial instability stemming from limited capital resources, dependence on a narrow customer base, and sensitivity to market volatility. These challenges are particularly evident in manufacturing and trading-based economies such as Taiwan, where SMEs form the backbone of industrial productivity but remain exposed to external shocks, fluctuating commodity prices, and inconsistent customer demand (Chung \u0026amp; Lin, \u003cspan citationid=\"CR4\" class=\"CitationRef\"\u003e2022\u003c/span\u003e). Ensuring revenue stability has therefore become a strategic imperative for SMEs seeking long-term resilience and competitiveness in dynamic markets. Recent empirical evidence highlights that effective leadership and community involvement are crucial to achieving sustainable SME growth and resilience, as they enhance organizational adaptability and foster stakeholder trust across diverse economies (Khan \u0026amp; Lee, \u003cspan citationid=\"CR11\" class=\"CitationRef\"\u003e2025\u003c/span\u003e).\u003c/p\u003e \u003cp\u003eIn the evolving business landscape, diversification has emerged as one of the most effective strategies for mitigating financial risk and stabilizing income streams. The concept of diversification, dating back to classical corporate strategy literature, is grounded in the notion that spreading operations across multiple sectors or product lines can reduce dependence on a single source of revenue and increase organizational adaptability (Rumelt, \u003cspan citationid=\"CR21\" class=\"CitationRef\"\u003e1974\u003c/span\u003e; Palich et al., \u003cspan citationid=\"CR20\" class=\"CitationRef\"\u003e2000\u003c/span\u003e). For SMEs, diversification often requires a careful balance between leveraging existing capabilities and exploring new business domains without overstretching resources (Grant \u0026amp; Jammine, \u003cspan citationid=\"CR7\" class=\"CitationRef\"\u003e1988\u003c/span\u003e). Unlike large corporations that can absorb short-term losses during diversification, SMEs must align new ventures with their existing operational strengths to maintain financial viability. In this regard, diversification into logistics represents a strategically aligned expansion for SMEs possessing underutilized transport or storage assets.\u003c/p\u003e \u003cp\u003eThe case examined in this study\u0026mdash;referred to as Company A for confidentiality \u0026mdash;illustrates this transition from a trading-centered business model to a service-oriented logistics framework. Company A has traditionally relied on a small group of core customers, resulting in cyclical revenue fluctuations and periods of asset underutilization. Despite maintaining a significant logistics fleet with a daily shipping capacity of approximately 500 tons, only 10% of this potential was actively utilized. This underutilization not only constrained profitability but also exposed the firm to substantial financial risk during periods of low demand. In response, the company proposed establishing a dedicated logistics subsidiary that could serve both internal transport needs and external clients across multiple industries, including SMEs, e-commerce, and cold-chain logistics. Such diversification would enable the firm to convert idle assets into new revenue channels, increase operational efficiency, and reduce reliance on a limited customer base.\u003c/p\u003e \u003cp\u003eThe motivation for this study arises from the broader recognition that SMEs must evolve beyond traditional cost-based competition toward value-driven and capability-based business models. Logistics diversification is not merely an operational adjustment but a strategic transformation that can redefine how firms interact with supply chains, clients, and market ecosystems. By internalizing logistics operations through subsidiary creation, SMEs can achieve greater control over distribution costs, improve service reliability, and develop new market-oriented competencies. Moreover, with the increasing digitalization of logistics\u0026mdash;through tools such as Customer Relationship Management (CRM) and Transportation Management Systems (TMS)\u0026mdash;SMEs now have access to affordable technologies that enhance efficiency, optimize fleet management, and support sustainable growth (Christopher, \u003cspan citationid=\"CR3\" class=\"CitationRef\"\u003e2016\u003c/span\u003e; Li \u0026amp; Wang, \u003cspan citationid=\"CR12\" class=\"CitationRef\"\u003e2022\u003c/span\u003e).\u003c/p\u003e \u003cp\u003eThis research examines the impact of logistics diversification on revenue stability in SMEs, focusing on the strategic, operational, and financial implications of establishing a logistics subsidiary. Using a single-case study of Company A, the paper integrates qualitative insights with quantitative forecasting methods to assess performance before and after diversification. Specifically, it examines sales and gross profit trends, applies Holt\u0026ndash;Winters exponential smoothing for financial projections, and evaluates strategic feasibility through SWOT and risk\u0026ndash;reward analyses. The findings aim to demonstrate that logistics diversification, when properly aligned with a firm\u0026rsquo;s existing assets and capabilities, can catalyze long-term resilience and value creation. Beyond contributing to academic discourse on SME strategy and corporate diversification, this study offers practical guidance for decision-makers seeking to transform operational inefficiencies into growth opportunities.\u003c/p\u003e"},{"header":"2. Literature Review","content":"\u003cp\u003eThe literature on diversification and logistics innovation highlights three major research domains: \u003cb\u003e(1) corporate diversification and strategic risk management, (2) logistics subsidiary formation and performance optimization, and (3) digital transformation of logistics operations through CRM/TMS integration\u003c/b\u003e. Together, these domains provide a comprehensive theoretical foundation for understanding why small and medium-sized enterprises (SMEs) pursue logistics diversification as a strategic growth pathway. This section synthesizes classical theories, contemporary empirical findings, and conceptual frameworks that support the strategic rationale behind diversification for firms with constrained resources but high operational flexibility.\u003c/p\u003e \u003cp\u003eCorporate diversification has long been studied as a mechanism for stabilizing revenue streams, reducing firm-specific risks, and leveraging internal synergies. Early foundational works (Ansoff, \u003cspan citationid=\"CR1\" class=\"CitationRef\"\u003e1957\u003c/span\u003e; Rumelt, \u003cspan citationid=\"CR21\" class=\"CitationRef\"\u003e1974\u003c/span\u003e) argue that firms diversify to capitalize on opportunities beyond their core market and to mitigate volatility associated with a single business line. Diversification is recognized as a buffering strategy, allowing firms to absorb market shocks and spread dependencies across multiple sectors. Empirical studies have demonstrated that moderate levels of related diversification enhance profitability, improve learning economies, and strengthen competitive positioning (Palich et al., \u003cspan citationid=\"CR20\" class=\"CitationRef\"\u003e2000\u003c/span\u003e). Related diversification, in particular, is associated with economies of scope, better knowledge transfer, and increased ability to exploit complementary capabilities (Grant \u0026amp; Jammine, \u003cspan citationid=\"CR7\" class=\"CitationRef\"\u003e1988\u003c/span\u003e). However, scholars also caution that excessive or unrelated diversification may result in managerial overstretch, loss of strategic clarity, and diminished performance (Markides \u0026amp; Williamson, \u003cspan citationid=\"CR15\" class=\"CitationRef\"\u003e1994\u003c/span\u003e). Strategic fit, therefore, is essential.\u003c/p\u003e \u003cp\u003eFor SMEs, the effectiveness of diversification depends heavily on the availability of resources, operational competencies, and market dynamics. Compared with large corporations, SMEs often operate with more limited financial reserves, narrower managerial bandwidth, and more volatile cash flow patterns (Hitt, Ireland, \u0026amp; Hoskisson, \u003cspan citationid=\"CR10\" class=\"CitationRef\"\u003e2017\u003c/span\u003e). However, SMEs also exhibit unique advantages, including organizational agility, faster decision-making cycles, and niche expertise. Scholars argue that diversification in SMEs must be \u003cb\u003eselective, incremental, and aligned with the firm\u0026rsquo;s internal strengths\u003c/b\u003e. When diversification builds upon existing capabilities\u0026mdash;such as repurposing idle assets or expanding downstream services\u0026mdash;the benefits tend to outweigh the risks (Liu \u0026amp; Pang, \u003cspan citationid=\"CR14\" class=\"CitationRef\"\u003e2019\u003c/span\u003e). This is particularly relevant in contexts where firms operate fleets, warehouses, or distribution assets that may be underutilized during off-peak periods.\u003c/p\u003e \u003cp\u003eIn this regard, the formation of \u003cb\u003elogistics subsidiaries\u003c/b\u003e has emerged as a strategic pathway that aligns well with the capabilities of SMEs. Research in supply-chain innovation identifies logistics subsidiary structures as effective mechanisms for internalizing transportation, warehousing, and last-mile delivery functions (Mentzer \u0026amp; Williams, \u003cspan citationid=\"CR16\" class=\"CitationRef\"\u003e2001\u003c/span\u003e). By establishing a dedicated logistics unit, firms can monetize excess capacity, manage their own transportation routes, and develop new revenue streams through external client acquisition. Case studies of global leaders such as Maersk Logistics, Amazon Logistics, and JD Logistics illustrate how logistics subsidiaries not only support core operations but also evolve into independently profitable business units (Christopher, \u003cspan citationid=\"CR3\" class=\"CitationRef\"\u003e2016\u003c/span\u003e). For SMEs, logistics diversification has additional advantages:\u003c/p\u003e \u003cp\u003e \u003cul\u003e \u003cli\u003e \u003cp\u003e \u003cb\u003eRevenue stability\u003c/b\u003e during industry downturns,\u003c/p\u003e \u003c/li\u003e \u003cli\u003e \u003cp\u003e \u003cb\u003eImproved fleet and asset utilization\u003c/b\u003e,\u003c/p\u003e \u003c/li\u003e \u003cli\u003e \u003cp\u003e \u003cb\u003eCentralized routing and dispatch optimization\u003c/b\u003e, and\u003c/p\u003e \u003c/li\u003e \u003cli\u003e \u003cp\u003e \u003cb\u003eEnhanced customer perception as an integrated service provider\u003c/b\u003e.\u003c/p\u003e \u003c/li\u003e \u003c/ul\u003e \u003c/p\u003e \u003cp\u003eRecent studies also emphasize the role of logistics subsidiaries in enhancing organizational resilience. During periods of market disruption\u0026mdash;such as pandemics, demand shocks, or supply chain bottlenecks\u0026mdash;firms with internal logistics capabilities tend to recover more quickly and maintain service continuity more effectively (Nguyen \u0026amp; Chen, \u003cspan citationid=\"CR17\" class=\"CitationRef\"\u003e2021\u003c/span\u003e; Das \u0026amp; Gupta, \u003cspan citationid=\"CR5\" class=\"CitationRef\"\u003e2020\u003c/span\u003e). This resilience is particularly valuable for SMEs operating in competitive or volatile industries, where customer retention and service reliability are critical determinants of long-term viability.\u003c/p\u003e \u003cp\u003eThe third major trend in the logistics literature concerns \u003cb\u003edigital transformation\u003c/b\u003e, especially through Customer Relationship Management (CRM) systems and Transportation Management Systems (TMS). Digital tools have radically improved logistics operations by enabling real-time tracking, predictive route planning, automated dispatch, and performance analytics (Gunasekaran et al., \u003cspan citationid=\"CR9\" class=\"CitationRef\"\u003e2017\u003c/span\u003e). CRM systems enhance customer engagement, streamline service-level monitoring, and support data-driven decision-making. Meanwhile, TMS platforms optimize routing efficiency, reduce fuel consumption, and provide visibility across the supply chain. Empirical studies show that firms adopting integrated CRM/TMS solutions exhibit improved delivery accuracy, shorter turnaround times, and higher customer satisfaction rates (Li \u0026amp; Wang, \u003cspan citationid=\"CR12\" class=\"CitationRef\"\u003e2022\u003c/span\u003e).\u003c/p\u003e \u003cp\u003eFor SMEs, digitalization provides a cost-effective means of competing with larger firms without requiring substantial capital investment. Lightweight digital logistics tools\u0026mdash;such as mobile-based tracking, cloud TMS solutions, and simplified CRM dashboards\u0026mdash;enable SMEs to automate key processes while preserving flexibility and minimizing overhead costs. In contexts like \u003cb\u003eCompany A\u003c/b\u003e, CRM/TMS integration plays a pivotal role in supporting logistics diversification by:\u003c/p\u003e \u003cp\u003e \u003col\u003e \u003cspan\u003e \u003cli\u003e \u003cp\u003eEnhancing communication with external customers,\u003c/p\u003e \u003c/li\u003e \u003c/span\u003e \u003cspan\u003e \u003cli\u003e \u003cp\u003eEnsuring compliance with Service Level Agreements (SLAs),\u003c/p\u003e \u003c/li\u003e \u003c/span\u003e \u003cspan\u003e \u003cli\u003e \u003cp\u003eProviding real-time visibility into fleet performance, and\u003c/p\u003e \u003c/li\u003e \u003c/span\u003e \u003cspan\u003e \u003cli\u003e \u003cp\u003eStrengthening customer retention through faster, more reliable service delivery.\u003c/p\u003e \u003c/li\u003e \u003c/span\u003e \u003c/ol\u003e \u003c/p\u003e \u003cp\u003eThe theoretical foundation for this study is primarily drawn from two influential frameworks: the Resource-Based View (RBV) and the Dynamic Capabilities \u003cb\u003eTheory (DCT)\u003c/b\u003e. Under the RBV, firms gain sustainable competitive advantages by leveraging unique internal resources\u0026mdash;such as fleet assets, distribution networks, or technical expertise (Barney, \u003cspan citationid=\"CR2\" class=\"CitationRef\"\u003e1991\u003c/span\u003e). In the context of logistics diversification, RBV suggests that firms can extract new value by repurposing existing tangible and intangible resources. For example, idle transportation capacity, route knowledge, and established customer relationships become sources of competitive advantage when redeployed through a logistics subsidiary.\u003c/p\u003e \u003cp\u003eDynamic Capability Theory complements RBV by emphasizing the firm\u0026rsquo;s ability to integrate, reconfigure, and transform internal resources in response to evolving market conditions (Teece, \u003cspan citationid=\"CR22\" class=\"CitationRef\"\u003e2007\u003c/span\u003e). DCT highlights processes such as sensing market opportunities, seizing new business models, and reconfiguring operational routines. Logistics diversification is conceptualized as a dynamic capability because it requires firms to restructure internal processes, adopt digital tools, expand organizational boundaries, and coordinate new cross-functional activities. For SMEs, which often face rapidly changing market environments, dynamic capabilities are essential for sustaining competitiveness and responding effectively to customer demands.\u003c/p\u003e \u003cp\u003eTogether, RBV and DCT provide a strong analytical basis for examining why Company A is considering the creation of a logistics subsidiary. The firm\u0026rsquo;s existing fleet assets, operational experience, long-standing customer relationships, and internal managerial knowledge represent valuable resources under RBV. Meanwhile, the company\u0026rsquo;s ability to integrate CRM/TMS systems, redesign workflows, and enter external client markets reflects its dynamic capability to reconfigure and expand its business model.\u003c/p\u003e \u003cp\u003eOverall, the literature strongly supports the strategic viability of logistics diversification for SMEs seeking stability, enhanced resource utilization, and long-term competitiveness. The intersection of diversification strategy, logistics innovation, and digital transformation provides a multidimensional framework for assessing Company A\u0026rsquo;s decision. This review demonstrates that successful logistics diversification is not merely an expansion strategy but a transformative process that strengthens internal capabilities, enhances value creation, and positions SMEs for sustained growth in increasingly complex and competitive markets.\u003c/p\u003e"},{"header":"3. Methodology","content":"\u003cp\u003eThis study employs a qualitative single-case study approach, supplemented with quantitative data. The case method is suitable for exploring complex strategic decisions in real-life contexts (Yin, \u003cspan citationid=\"CR23\" class=\"CitationRef\"\u003e2018\u003c/span\u003e). The chosen firm, Company A, is an SME with an established trading business and underutilized logistics capacity, making it an ideal subject for analyzing the feasibility of diversification.\u003c/p\u003e \u003cp\u003eData were collected from internal performance records (sales, gross profit, and quantity data, 2023\u0026ndash;2025), forecasting models using Holt\u0026ndash;Winters exponential smoothing to predict revenue trends for 2026\u0026ndash;2028, and strategic evaluations via SWOT, KPI, and risk\u0026ndash;reward matrices derived from operational data and management interviews.\u003c/p\u003e \u003cp\u003eThe analytical framework includes descriptive financial analysis to identify volatility, forecast modeling to project trends and seasonality, and strategic evaluation using SWOT and risk\u0026ndash;reward frameworks to assess business model alternatives. All company identifiers are anonymized as Company A to ensure ethical compliance.\u003c/p\u003e \u003cp\u003eTriangulation of financial, managerial, and secondary literature sources ensures analytical rigor. Methodological reliability is reinforced through transparent data presentation, while internal validity is achieved through cross-verification of forecast accuracy and consistency in qualitative interpretation.\u003c/p\u003e"},{"header":"4. Data analysis and results","content":"\u003cp\u003e\u003cstrong\u003eHistorical Sales \u0026amp; GP Trends (2023\u0026ndash;2025)\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eFigure \u003cspan class=\"InternalRef\"\u003e1\u003c/span\u003e illustrates the historical trajectory of Company A\u0026rsquo;s sales and gross profit (GP) over the three years from 2023 to 2025. The graph highlights pronounced fluctuations in both sales revenue and profit margins, indicating cyclical instability tied to seasonality and customer dependency. Sales peaked during specific months corresponding to the procurement cycles of the firm\u0026rsquo;s major clients, while troughs emerged during off-peak seasons, resulting in inconsistent revenue streams. Gross profit exhibited similar volatility, reinforcing the observation that operational costs were not proportionally optimized relative to fluctuating sales volumes.\u003c/p\u003e\n\u003cp\u003eThis pattern highlights the firm\u0026rsquo;s overreliance on a narrow customer base and the absence of stable, diversified income streams, underscoring the need for a logistics diversification strategy to achieve revenue stability.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eSales and gross profit\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eFigure \u003cspan class=\"InternalRef\"\u003e2\u003c/span\u003e presents a comparative view of sales and gross profit to demonstrate the relationship between top-line revenue generation and bottom-line profitability. The alignment between the two curves suggests that profit growth is directly dependent on sales volume rather than cost efficiency. Margins remained constrained despite revenue spikes, implying that operational inefficiencies\u0026mdash;such as underutilized logistics capacity and sub-optimal route planning\u0026mdash;eroded potential profit gains.\u003c/p\u003e\n\u003cp\u003eThe close correspondence between sales and GP curves confirms that Company A\u0026rsquo;s profitability was \u003cstrong\u003evolume-driven rather than efficiency-driven\u003c/strong\u003e, thereby emphasizing the importance of structural changes (such as creating a logistics subsidiary) to enhance margin resilience even during low-sales periods.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eForecast sales and gross profit\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eFigure \u003cspan class=\"InternalRef\"\u003e3\u003c/span\u003e illustrates the projected sales and gross profit for the years 2026 to 2028, generated using the Holt\u0026ndash;Winters \u003cstrong\u003eexponential smoothing model\u003c/strong\u003e. This forecasting method integrates trend and seasonality components to predict future performance based on historical data patterns.\u003c/p\u003e\n\u003cp\u003eThe forecast indicates a gradual upward trend in both sales and gross profit, reflecting the expected stabilization effects of logistics diversification. Seasonal peaks persist but appear less extreme, suggesting smoother revenue cycles. The projected improvement in gross profit margin demonstrates the anticipated efficiency gains from utilizing idle fleet capacity, attracting external logistics clients, and achieving better cost distribution across diversified operations.\u003c/p\u003e\n\u003cp\u003eOverall, Fig. \u003cspan class=\"InternalRef\"\u003e3\u003c/span\u003e validates the \u003cstrong\u003efinancial feasibility and sustainability\u003c/strong\u003e of diversification as an effective means of reducing volatility and strengthening long-term profitability.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eYearly Gross profit contribution and customer movement between years.\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eFigure \u003cspan class=\"InternalRef\"\u003e4\u003c/span\u003e visualizes two key dimensions: (1) the annual contribution of each major customer to overall gross profit, and (2) the shifts in customer composition across the observed period. The diagram reveals that a few key clients dominated the company\u0026rsquo;s profit structure in 2023, accounting for more than 60% of total GP. However, by 2025, partial diversification and client turnover led to a more distributed contribution pattern.\u003c/p\u003e\n\u003cp\u003eThe arrows or flow elements in the figure represent \u003cstrong\u003ecustomer movement\u003c/strong\u003e, indicating both attrition and acquisition. While some long-term clients reduced their orders or exited, new customers\u0026mdash;particularly those from logistics outsourcing partnerships\u0026mdash;began to appear, reflecting the early impact of the diversification initiative.\u003c/p\u003e\n\u003cp\u003eThis figure provides empirical evidence that establishing a logistics subsidiary could further \u003cstrong\u003ebalance customer dependence\u003c/strong\u003e and expand the firm\u0026rsquo;s market reach, supporting the strategic argument for diversification as a means to achieve revenue stability and resilience.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eIntegrative Discussion Across\u003c/strong\u003e Figs. \u003cspan class=\"InternalRef\"\u003e1\u003c/span\u003e\u0026ndash;\u003cspan class=\"InternalRef\"\u003e4\u003c/span\u003e\u003c/p\u003e\n\u003cp\u003eTaken together, Figs.\u0026nbsp;\u003cspan class=\"InternalRef\"\u003e1\u003c/span\u003e\u0026ndash;\u003cspan class=\"InternalRef\"\u003e4\u003c/span\u003e provide a sequential visualization of Company A\u0026rsquo;s transformation trajectory\u0026mdash;from historical instability to projected stabilization under logistics diversification.\u003c/p\u003e\n\u003cp\u003eFigures \u003cspan class=\"InternalRef\"\u003e1\u003c/span\u003e and \u003cspan class=\"InternalRef\"\u003e2\u003c/span\u003e identify the issues of revenue and profit volatility resulting from concentration risk and operational inefficiencies.\u003c/p\u003e\n\u003cp\u003eFigure \u003cspan class=\"InternalRef\"\u003e3\u003c/span\u003e provides quantitative validation through \u003cstrong\u003eforecast modeling\u003c/strong\u003e, showing that diversification is expected to enhance both trend stability and profit predictability.\u003c/p\u003e\n\u003cp\u003eFigure \u003cspan class=\"InternalRef\"\u003e4\u003c/span\u003e complements these quantitative results with a \u003cstrong\u003estructural view of customer dynamics\u003c/strong\u003e, showing how diversification gradually mitigates dependency on a few dominant clients.\u003c/p\u003e\n\u003cp\u003eThis integrated interpretation confirms that logistics diversification not only improves financial performance but also aligns with the theoretical underpinnings of the \u003cstrong\u003eResource-Based View (RBV)\u003c/strong\u003e and \u003cstrong\u003eDynamic Capability Theory\u003c/strong\u003e, as discussed earlier in the paper. By leveraging existing transport assets and reconfiguring organizational capabilities, Company A transitions from a reactive trading firm to a proactive logistics-driven enterprise capable of sustaining long-term revenue stability.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eSWOT Analysis\u003c/strong\u003e\u003c/p\u003e\n\u003cdiv class=\"gridtable\"\u003e\u0026nbsp;\u003ctable id=\"Taba\" border=\"1\"\u003e\n \u003ccolgroup cols=\"2\"\u003e\u003c/colgroup\u003e\n \u003cthead\u003e\n \u003ctr\u003e\n \u003cth align=\"left\"\u003e\n \u003cp\u003eStrengths (S)\u003c/p\u003e\n \u003c/th\u003e\n \u003cth align=\"left\"\u003e\n \u003cp\u003eWeaknesses (W)\u003c/p\u003e\n \u003c/th\u003e\n \u003c/tr\u003e\n \u003c/thead\u003e\n \u003ctbody\u003e\n \u003ctr\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eStrong customer base with repeat high-value clients\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eHeavy dependence on a few core customers\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eSeasonal sales peaks provide targeted marketing opportunities\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eRevenue volatility and cost inefficiencies\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eDemonstrated ability to recover quickly from dips\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eLimited growth in quantity forecasts\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd align=\"left\"\u003e\u0026nbsp;\u003c/td\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eLack of a dedicated human resource department\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd align=\"left\"\u003e\u0026nbsp;\u003c/td\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eUnderutilization of resources\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd align=\"left\"\u003e\u0026nbsp;\u003c/td\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eAmbiguity in short- and long-term goals\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003e\u003cstrong\u003eOpportunities (O)\u003c/strong\u003e\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003e\u003cstrong\u003eThreats (T)\u003c/strong\u003e\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eExpansion into logistics services\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eMarket volatility and rising operational costs\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eUse predictive analytics for trend anticipation.\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eRisk of losing top customers\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eCustomer base diversification\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eCompetitive pressures affecting price and demand\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003ePotential cost-control measures to improve margins\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"left\"\u003e\u0026nbsp;\u003c/td\u003e\n \u003c/tr\u003e\n \u003c/tbody\u003e\n \u003c/table\u003e\n\u003c/div\u003e\n\u003cp\u003e\u003cstrong\u003eIntegration of SWOT with Proposed Business Expansion\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eStrengths\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eCompany A possesses a strong customer base composed of repeat, high-value clients, a foundation that demonstrates both brand reliability and service credibility in the trading sector. Its existing logistics infrastructure\u0026mdash;including a sizable transport fleet capable of moving roughly 500 tons per day\u0026mdash;provides an internal operational backbone for diversification. Seasonal peaks in sales reveal well-defined demand cycles that the company can leverage for capacity planning. Moreover, the firm has demonstrated the ability to recover quickly from demand fluctuations, indicating adaptive resilience and managerial agility.\u003c/p\u003e\n\u003cp\u003eFrom the perspective of business expansion, these strengths establish a \u003cstrong\u003estrategic launchpad for forming a logistics subsidiary\u003c/strong\u003e. The underused fleet, warehouse space, and trained drivers can be transformed from cost centers into profit-generating assets by serving external clients in industries such as manufacturing, e-commerce, and cold-chain distribution. Thus, what was once idle capacity becomes a competitive advantage\u0026mdash;enabling \u003cstrong\u003easset monetization, cost optimization, and enhanced brand value\u003c/strong\u003e as an integrated logistics service provider.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eWeaknesses\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eThe analysis reveals structural weaknesses that constrain current performance, including an over-reliance on a few major customers, high revenue volatility, and cost inefficiencies resulting from fragmented logistics management. Human resource limitations and the absence of a dedicated logistics management department hinder operational scalability. Furthermore, the presence of ambiguous short- and long-term goals has led to inconsistent resource allocation.\u003c/p\u003e\n\u003cp\u003eIn the context of diversification, these weaknesses necessitate \u003cstrong\u003ea restructuring of the organization\u003c/strong\u003e. The establishment of a logistics subsidiary would create a focused entity with dedicated management, clear KPIs, and data-driven performance tracking through tools such as \u003cstrong\u003eCRM\u003c/strong\u003e and \u003cstrong\u003eTMS\u003c/strong\u003e. By formalizing the logistics function, Company A can reduce its dependence on trading clients and achieve higher visibility over transport operations\u0026mdash;transforming a current weakness into a controlled, revenue-generating unit.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eOpportunities\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eSeveral emerging opportunities strengthen the business case for diversification. The logistics market in Taiwan and Southeast Asia is expanding due to the growth of SMEs, the surge in online retail, and the increasing need for cold-chain transport solutions. Predictive analytics and digital transformation through CRM/TMS platforms allow data-driven decision-making, route optimization, and service customization at minimal cost. Additionally, the logistics subsidiary model offers the opportunity for revenue diversification through the acquisition of multi-sector clients, thereby reducing exposure to cyclical fluctuations in trading demand.\u003c/p\u003e\n\u003cp\u003eThe proposed expansion will therefore capitalize on these opportunities by establishing \u003cstrong\u003e\u0026ldquo;Long Fu Logistics (LFL)\u0026rdquo;\u003c/strong\u003e as a distinct profit unit. LFL can attract external contracts, leverage fleet management technologies, and collaborate with strategic partners in warehousing and delivery\u0026mdash;creating both horizontal and vertical integration advantages across the supply chain.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eThreats\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eThe major threats include market volatility, rising fuel and maintenance costs, intense price competition, and the risk of losing top clients to competitors. Furthermore, entry barriers in third-party logistics (3PL) are relatively low, which can pressure profit margins. Macroeconomic factors such as inflation and labor shortages may also increase operational costs.\u003c/p\u003e\n\u003cp\u003eHowever, these threats can be mitigated through \u003cstrong\u003estrategic diversification and efficiency enhancement\u003c/strong\u003e. By offering integrated logistics services, the company can stabilize income from multiple sources, achieve economies of scale, and strengthen client retention through superior service reliability. Additionally, digital logistics management reduces fuel waste and downtime, offsetting cost escalation threats.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eIntegrated Strategic Implications\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eThe SWOT synthesis highlights that the \u003cstrong\u003elogistics diversification initiative directly addresses Company A\u0026rsquo;s internal weaknesses and external threats\u003c/strong\u003e while leveraging its inherent strengths and emerging opportunities. Converting idle transport resources into a dedicated logistics subsidiary enhances operational efficiency, creates new revenue channels, and builds resilience against customer concentration risk.\u003c/p\u003e\n\u003cp\u003eFrom a strategic management perspective, this transformation aligns with both the \u003cstrong\u003eResource-Based View (RBV)\u003c/strong\u003e, which advocates leveraging existing tangible assets to create new competitive advantages, and the \u003cstrong\u003eDynamic Capability Theory (DCT)\u003c/strong\u003e, which emphasizes reconfiguring internal processes to adapt to environmental changes.\u003c/p\u003e\n\u003cp\u003eThe proposed subsidiary model supports long-term financial stability by:\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eOptimizing fleet utilization\u003c/strong\u003e to raise asset productivity.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eDiversifying customer portfolios\u003c/strong\u003e to reduce dependence on trading clients.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eIntegrating CRM/TMS systems\u003c/strong\u003e to enhance transparency and service quality.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eBuilding a self-sustaining profit center\u003c/strong\u003e capable of reinvesting in technology and market expansion.\u003c/p\u003e\n\u003cp\u003eCollectively, the SWOT-driven strategy transforms Company A from a cyclical, trading-dependent enterprise into a \u003cstrong\u003elogistics-enabled SME ecosystem\u003c/strong\u003e, achieving sustainable growth and revenue stability consistent with the study\u0026rsquo;s central objective.\u003c/p\u003e\n\u003cdiv id=\"Sec5\" class=\"Section2\"\u003e\n \u003ch2\u003e4.5 Comparative and Financial Evaluation of the Proposed Subsidiary\u003c/h2\u003e\n \u003cp\u003eTo deepen the empirical analysis, the study incorporated operational and financial data from the company\u0026apos;s A Business Expansion project. A comparative evaluation between maintaining logistics as an internal department and establishing an independent subsidiary revealed distinct strategic advantages for the latter model. As shown in Table \u003cspan class=\"InternalRef\"\u003e2\u003c/span\u003e, the subsidiary approach provides clearer profit-and-loss accountability, enhances market visibility, and allows risk isolation and future scalability. Conversely, the internal department model blends results within corporate accounts and limits external client engagement.\u003c/p\u003e\n \u003cdiv class=\"gridtable\"\u003e\u0026nbsp;\u003ctable id=\"Tab1\" border=\"1\"\u003e\n \u003ccaption language=\"En\"\u003e\n \u003cdiv class=\"CaptionNumber\"\u003eTable 2\u003c/div\u003e\n \u003cdiv class=\"CaptionContent\"\u003e\n \u003cp\u003eComparison of Internal Department vs. Subsidiary Model\u003c/p\u003e\n \u003c/div\u003e\n \u003c/caption\u003e\n \u003ccolgroup cols=\"3\"\u003e\u003c/colgroup\u003e\n \u003cthead\u003e\n \u003ctr\u003e\n \u003cth align=\"left\"\u003e\n \u003cp\u003eAspect\u003c/p\u003e\n \u003c/th\u003e\n \u003cth align=\"left\"\u003e\n \u003cp\u003eSubsidiary (Company A)\u003c/p\u003e\n \u003c/th\u003e\n \u003cth align=\"left\"\u003e\n \u003cp\u003eInternal Department\u003c/p\u003e\n \u003c/th\u003e\n \u003c/tr\u003e\n \u003c/thead\u003e\n \u003ctbody\u003e\n \u003ctr\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eFinancial Tracking\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eSeparate P\u0026amp;L, transparent ROI\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eMixed with corporate finances\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eMarket Perception\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eIndependent brand attracting external clients\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eViewed as an internal cost center\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eRisk Containment\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eLegal ring-fencing of liabilities\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eShared risk across the company\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eScalability\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eEasier investment and expansion\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eLimited independence\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eManagement Focus\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eDedicated logistics leadership\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003eCompetes with trading priorities\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003c/tbody\u003e\n \u003c/table\u003e\n \u003c/div\u003e\n \u003cp\u003eThe risk\u0026ndash;reward matrix further supports this finding: the subsidiary scenario ranks as High Reward / Low Risk, owing to idle fleet utilization and market readiness. In contrast, maintaining the status quo presents a low return with sustained volatility.\u003c/p\u003e\n\u003c/div\u003e\n\u003cdiv id=\"Sec6\" class=\"Section2\"\u003e\n \u003ch2\u003e4.6 Financial Projection and Performance Metrics\u003c/h2\u003e\n \u003cp\u003eIntegrating Holt\u0026ndash;Winters forecasting with business expansion estimates produced a robust financial outlook. Projected revenues for the logistics subsidiary indicate steady growth, from NT\u003cspan\u003e$\u003c/span\u003e4.5\u0026nbsp;million in Year 1 (initial setup phase) to NT\u003cspan\u003e$\u003c/span\u003e12.8\u0026nbsp;million by Year 3, resulting in a net profit of NT\u003cspan\u003e$\u003c/span\u003e3.5\u0026nbsp;million and a net margin exceeding 10% per ton of freight handled. Fleet utilization is expected to exceed 60% by Year 2, while external client retention should remain above 80% due to CRM/TMS-based service management.\u003c/p\u003e\n \u003cp\u003e\u003cstrong\u003eKey Performance Indicators (KPIs)\u003c/strong\u003e:\u003c/p\u003e\n \u003cul\u003e\n \u003cli\u003e\n \u003cp\u003e\u0026nbsp;Fleet Utilization\u0026thinsp;\u0026gt;\u0026thinsp;60% (Year 2)\u003c/p\u003e\n \u003c/li\u003e\n \u003cli\u003e\n \u003cp\u003eClient Retention\u0026thinsp;\u0026gt;\u0026thinsp;80%\u003c/p\u003e\n \u003c/li\u003e\n \u003cli\u003e\n \u003cp\u003eSLA Compliance\u0026thinsp;\u0026gt;\u0026thinsp;95%\u003c/p\u003e\n \u003c/li\u003e\n \u003cli\u003e\n \u003cp\u003e\u0026nbsp;Net Margin\u0026thinsp;\u0026gt;\u0026thinsp;10% per ton\u003c/p\u003e\n \u003c/li\u003e\n \u003cli\u003e\n \u003cp\u003eMonthly Revenue per Client\u0026thinsp;\u0026gt;\u0026thinsp;NT\u003cspan\u003e$\u003c/span\u003e50,000\u003c/p\u003e\n \u003c/li\u003e\n \u003c/ul\u003e\n \u003cp\u003eThese metrics demonstrate the operational viability of diversification and provide quantifiable evidence of improved efficiency and profitability compared with the pre-expansion baseline.\u003c/p\u003e\n\u003c/div\u003e\n\u003cdiv id=\"Sec7\" class=\"Section2\"\u003e\n \u003ch2\u003e4.7 Strategic Integration and Long-Term Impact\u003c/h2\u003e\n \u003cp\u003eThe results affirm that forming a logistics subsidiary effectively converts underutilized fleet assets into a stable revenue engine. This structural shift mitigates dependency on a small customer base, balances seasonal revenue fluctuations, and enhances organizational resilience. It also aligns with the Resource-Based View (RBV) by leveraging existing tangible assets, and with the Dynamic Capability Theory (DCT) by developing new competencies in logistics technology, service quality, and client diversification.\u003c/p\u003e\n \u003cp\u003eIn summary, the results section now links financial, operational, and strategic outcomes, demonstrating that logistics diversification is not merely a growth option but a sustainability imperative for Company A and comparable SMEs.\u003c/p\u003e\n\u003c/div\u003e"},{"header":"5. Discussion","content":"\u003cp\u003e\u003cstrong\u003e1. Interpretation of Key Findings\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eThe empirical results of this study demonstrate that transforming underutilized logistics capacity into a formally structured business subsidiary yields substantial improvements in operational efficiency, revenue stability, and organizational resilience. The forecasting analysis, employing the Holt–Winters exponential smoothing method, identified a persistent upward trend in both sales and gross profit metrics following the diversification initiative. Complementary evaluations using SWOT and Key Performance Indicator (KPI) frameworks further substantiated that logistics-centered diversification mitigates dependency on a limited client base while enhancing the overall utilization of existing resources. Collectively, these findings provide robust evidence that logistics diversification functions simultaneously as a resource-leveraging and capability-enhancing strategy.\u003c/p\u003e\n\u003cp\u003eInterpreted through the lens of the \u003cstrong\u003eResource-Based View (RBV)\u003c/strong\u003e, the diversification initiative exemplifies the strategic redeployment of tangible and intangible assets—specifically, transport fleets, distribution expertise, and operational infrastructure—into a new, profit-generating organizational unit. This reconfiguration not only optimizes the productive use of idle capacity but also creates value by transforming operational redundancies into sources of sustained competitive advantage. Concurrently, from the perspective of \u003cstrong\u003eDynamic Capability Theory (DCT)\u003c/strong\u003e, the process of establishing a logistics subsidiary catalyzed the development of new organizational competencies, particularly in digital logistics management, customer analytics, and adaptive market engagement. These dynamic capabilities enable the firm to effectively sense, seize, and reconfigure resources in response to changing market conditions, thereby supporting long-term strategic flexibility and performance sustainability.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003e2. Strategic and Managerial Implications\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eFrom a managerial standpoint, establishing an independent logistics subsidiary provides a more transparent, accountable, and scalable organizational structure than maintaining logistics as an internal department. The subsidiary model facilitates precise financial tracking through distinct profit and loss accounts, enabling clearer attribution of costs and revenues. Additionally, the structural separation enhances risk management by creating a degree of financial and operational ring-fencing, thereby isolating potential liabilities and improving overall resilience. This framework also enables greater external market visibility, thereby reinforcing the firm’s strategic positioning and managerial agility in responding to evolving market opportunities and risks.\u003c/p\u003e\n\u003cp\u003eThe findings underscore three key managerial imperatives that are critical to the successful implementation of logistics diversification. \u003cstrong\u003eFirst\u003c/strong\u003e, strong leadership and organizational structuring are essential. The appointment of dedicated logistics management ensures operational autonomy and prevents conflicts of interest with the firm’s core trading priorities. \u003cstrong\u003eSecond\u003c/strong\u003e, digital integration through the deployment of advanced Customer Relationship Management (CRM) and Transportation Management System (TMS) platforms enables real-time fleet monitoring, predictive analytics, and service-level optimization. These digital tools support evidence-based decision-making, enhancing the overall responsiveness and reliability of logistics operations. \u003cstrong\u003eThird\u003c/strong\u003e, strategic market diversification—particularly toward small and medium-sized enterprises, e-commerce platforms, and cold-chain logistics—ensures consistent asset utilization while mitigating revenue volatility arising from cyclical demand fluctuations.\u003c/p\u003e\n\u003cp\u003eMore broadly, this case exemplifies how related diversification, when anchored in a firm’s existing operational competencies, can serve as a pathway to sustainable growth without incurring disproportionate financial exposure. By adopting a phased expansion strategy—initiating operations internally, conducting pilot engagements with select clients, and progressively scaling based on performance feedback—firms can minimize risk while gradually building market credibility. This incremental and evidence-driven approach not only enhances strategic learning and adaptability but also reinforces the long-term competitiveness and organizational resilience of SMEs operating within dynamic and uncertain business environments.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003e3. Theoretical Contributions\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eThis study contributes to diversification theory by illustrating how the creation of logistics subsidiaries serves as a hybrid strategy that combines operational optimization and market expansion. Unlike traditional diversification, which often requires a large-scale capital outlay, this model leverages idle internal resources and integrates forecast-based decision analytics into strategic planning. The findings expand the empirical base of the RBV–DCT integration framework, showing how SMEs can reconfigure internal assets through technology-driven processes to achieve competitive advantage and revenue stability.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003e4. Socio-Economic and Sustainability Implications\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eBeyond corporate profitability, logistics diversification generates broader socio-economic and environmental benefits. Operational efficiency leads to lower fuel wastage and reduced emissions per ton-kilometer, supporting Taiwan’s national carbon-fee reduction framework and global sustainability goals. The new subsidiary model also creates employment opportunities in digital logistics management and analytics, facilitating the modernization and green transformation of SMEs within the regional economy. Overall, the strategy aligns business growth with sustainable development, ensuring competitiveness in an increasingly data-driven and environmentally regulated marketplace.\u003c/p\u003e"},{"header":"Conclusion and Future Work","content":"\u003cp\u003e\u003cstrong\u003e1. Conclusion\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eThis research confirms that logistics diversification offers a viable and strategically coherent pathway for small and medium-sized enterprises (SMEs) encountering cyclical revenue fluctuations and underutilized assets. The case study evidence illustrates that establishing a dedicated logistics subsidiary can effectively transform idle transport capacity into a consistent income stream, mitigate financial risk through customer diversification, enhance operational efficiency and profit margins via technology integration, and foster adaptive capabilities consistent with the principles of the Resource-Based View (RBV) and Dynamic Capabilities Theory (DCT).\u003c/p\u003e\n\u003cp\u003eThe forecasting results further demonstrate significant improvements in key performance indicators. Specifically, revenues are projected to rise from approximately NT$4.5 million in the first year to over NT$12 million by the third year. This growth is accompanied by a net profit margin exceeding 10% and a fleet utilization rate above 60%. Collectively, these outcomes validate logistics diversification as a scalable and sustainable growth model, positioning SMEs to strengthen resilience and competitiveness in increasingly volatile market environments.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003e2. Practical Recommendations\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eTo institutionalize data-driven management within small and medium-sized enterprises (SMEs), it is imperative to develop integrated analytical frameworks that consolidate outputs from Customer Relationship Management (CRM) and Transportation Management System (TMS) platforms with key financial performance indicators (KPIs). Such dashboards facilitate real-time monitoring and evaluation of operational and financial dynamics, enabling evidence-based strategic decisions. This digital integration promotes managerial agility, enhances transparency in performance assessment, and strengthens organizational capacity for predictive and adaptive decision-making in volatile market environments.\u003c/p\u003e\n\u003cp\u003eEnhancing workforce capabilities represents another critical strategic pillar. SMEs should prioritize continuous investment in both technical and managerial training programs that encompass fleet operation optimization, customer relationship management, and data analytics. Building human capital in these domains not only elevates service reliability and operational precision but also cultivates a culture of analytical reasoning and innovation. This, in turn, reinforces the firm’s ability to translate technological and operational improvements into sustained competitive advantage.\u003c/p\u003e\n\u003cp\u003eThe pursuit of collaborative logistics networks further extends the strategic horizon for SMEs. Establishing partnerships with peer enterprises, cold-chain distributors, and e-commerce platforms can generate synergistic efficiencies through resource sharing, route optimization, and joint service delivery. Such inter-firm collaborations enhance network resilience, reduce transaction costs, and facilitate access to diversified markets, aligning with theories of strategic alliances and relational capital development in logistics ecosystems.\u003c/p\u003e\n\u003cp\u003eFinally, integrating sustainability metrics into logistics operations constitutes an emerging imperative for long-term competitiveness. By systematically monitoring and disclosing indicators such as carbon intensity, fuel efficiency, and cost-effectiveness, SMEs can align their logistics performance with Environmental, Social, and Governance (ESG) principles. This integration not only advances corporate accountability and stakeholder engagement but also embeds sustainability within the strategic logic of operational excellence, thereby contributing to both economic and environmental resilience.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003e3. Limitations\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eThis study employs a single-case research design, which inherently constrains the generalizability of its findings across diverse industrial and geographical contexts. While the applied forecasting models offer a robust and contextually grounded outlook, their predictive accuracy may be influenced by variations in macroeconomic conditions, policy environments, and market dynamics. Consequently, the extrapolation of results should be approached with caution. To enhance the external validity and methodological rigor of this research stream, future studies are encouraged to adopt multi-case or cross-sectoral designs supported by larger, longitudinal datasets. Such approaches would facilitate comparative analysis, enable the refinement of predictive models, and provide a more comprehensive understanding of the determinants and outcomes of logistics diversification across varying institutional and economic settings..\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003e4. Future recommendation\u0026nbsp;\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eFuture research should pursue comparative multi-case investigations of small and medium-sized enterprises (SMEs) that have adopted logistics diversification strategies across the manufacturing, retail, and service sectors. Such cross-sectoral analyses would provide nuanced insights into the contextual drivers, implementation pathways, and performance outcomes, thereby enriching both theoretical and practical understandings of diversification as a resilience-enhancing mechanism.\u003c/p\u003e\n\u003cp\u003eThe integration of artificial intelligence (AI) and advanced optimization models, such as those for route planning, cost minimization, and emission reduction, also represents a promising avenue for inquiry. Embedding these analytical tools within logistics operations could significantly enhance operational intelligence, enabling SMEs to achieve greater precision, responsiveness, and sustainability in resource allocation and decision-making processes.\u003c/p\u003e\n\u003cp\u003eMoreover, longitudinal assessments of post-diversification outcomes over a five- to ten-year horizon would yield valuable evidence regarding the temporal dynamics of financial, environmental, and strategic performance. Such evaluations can capture the long-term effectiveness of diversification strategies and their contribution to enterprise adaptability under evolving market and policy conditions.\u003c/p\u003e\n\u003cp\u003eFurthermore, incorporating behavioral and governance perspectives into the study of logistics diversification would shed light on the cognitive and institutional dimensions of leadership decision-making and risk perception. Understanding how managerial behavior, governance structures, and organizational culture shape diversification choices can deepen the explanatory power of strategic management and organizational theories within the SME context.\u003c/p\u003e\n\u003cp\u003eFinally, conducting comprehensive life-cycle and carbon-cost analyses can help quantify the environmental and economic co-benefits of diversified logistics operations. By linking operational efficiency with sustainability performance, such analyses would bridge the gap between financial viability and environmental accountability. Collectively, addressing these research dimensions will advance scholarly understanding of how SMEs can transform operational inefficiencies into opportunities for innovation, sustainability, and long-term competitive advantage.\u003c/p\u003e"},{"header":"Declarations","content":"\u003cp\u003e\u003cstrong\u003eAuthor Contributions:\u003c/strong\u003e \u003cstrong\u003eAuthor Contributions:\u003c/strong\u003e \u003cem\u003eAdil Zareef Khan\u003c/em\u003e conceived the study, designed the research framework, performed the primary analysis, drafted the manuscript, coordinated revisions, and handled all journal correspondence. \u003cem\u003eCheng-Wen Lee\u003c/em\u003e (supervisor) provided overall supervision and academic guidance, refined the methodology and theoretical positioning, and critically reviewed and strengthened the manuscript. \u003cem\u003eTse-Wen Hong\u003c/em\u003e contributed to the literature review, data curation, and preliminary statistical analysis. \u003cstrong\u003eHong-Vui Ngo\u003c/strong\u003eformal analysis, data curation, and visualization. \u003cem\u003eSephali Bera\u003c/em\u003e contributed to data interpretation, SME case insights, and manuscript editing. \u003cem\u003eAsad Javed\u003c/em\u003e supported secondary data extraction, robustness checks, and final proofreading of the manuscript, and Avi\u003cstrong\u003e\u0026nbsp;Sunani supported,\u003c/strong\u003e literature review, methodology support, and writing of—original draft.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eFunding\u003c/strong\u003e: This research received no external funding.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eEthics and Guidelines:\u003c/strong\u003e The ethical standards outlined in the Declaration of Helsinki were used in this study. On November 15, 2025, Chung Yuan Christian University's Institutional Review Board (IRB) issued ethical approval under protocol number 3107631208.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eConsent to Participate\u003c/strong\u003e: Informed consent was obtained from all individuals involved in this study before data collection. All participants were clearly informed about the purpose of the research, the voluntary nature of their participation, the procedures involved, as well as any potential risks and benefits. The study did not involve participants under the age of 16; however, had such participants been included, informed consent would have been obtained from their parents or legally authorized representatives in accordance with institutional ethical guidelines.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eData Availability Statement:\u0026nbsp;\u003c/strong\u003eThe original contributions presented in this study are included in the article. Further inquiries can be directed to the corresponding author.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eAcknowledgments\u003c/strong\u003e: With the utmost love and gratitude, I dedicate this research to my parents, whose steadfast support, prayers, and sacrifices have served as the cornerstone of every academic step I have taken. Additionally, I dedicate this work to my mentor, Abdul Rauf Turk,\u0026nbsp;and Shagufta Zareef, whose unwavering support, tolerance, and faith in me have given me strength throughout this undertaking. Every accomplishment in my life has significance because of you.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eConflicts of Interest\u003c/strong\u003e: The authors affirm that there are no conflicts of interest related to the conduct or publication of this research.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eConsent to Publish declaration:\u003c/strong\u003e Not applicable.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eClinical trial number:\u003c/strong\u003e Not applicable.\u003c/p\u003e"},{"header":"References","content":"\u003col\u003e\n\u003cli\u003eAnsoff, H. I. (1957). Strategies for diversification. \u003cem\u003eHarvard Business Review, 35\u003c/em\u003e(5), 113\u0026ndash;124.\u003c/li\u003e\n\u003cli\u003eBarney, J. (1991). Firm resources and sustained competitive advantage. \u003cem\u003eJournal of Management, 17\u003c/em\u003e(1), 99\u0026ndash;120.* https://doi.org/10.1177/014920639101700108\u003c/li\u003e\n\u003cli\u003eChristopher, M. 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SAGE Publications.\u003c/li\u003e\n\u003c/ol\u003e"}],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":true,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":true,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":false,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":false,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"Diversification, Logistics subsidiary, SME strategy, Revenue stability, Business transformation, Taiwan","lastPublishedDoi":"10.21203/rs.3.rs-8160185/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-8160185/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eSmall and medium-sized enterprises (SMEs) often experience significant fluctuations in revenue due to volatile demand, narrow client bases, and operational inefficiencies. This study examines logistics diversification as a strategic approach to achieving revenue stability and sustainable business performance. Using a case study of Company A, a mid-sized trading firm in Taiwan, the research investigates the feasibility and financial implications of transforming idle fleet capacity into a dedicated logistics subsidiary. The study employs a mixed methods approach, combining qualitative SWOT analysis with quantitative financial forecasting using Holt\u0026ndash;Winters exponential smoothing, to evaluate the benefits of diversification. The results demonstrate that logistics diversification enhances asset utilization, reduces dependency on core customers, and improves profit margins. This research contributes to the literature on SME strategy and logistics management by providing a replicable model for business transformation and long-term resilience in dynamic markets.\u003c/p\u003e","manuscriptTitle":"Logistics Diversification as a Pathway to SME Sustainability and Resilience","msid":"","msnumber":"","nonDraftVersions":[{"code":1,"date":"2025-12-30 01:02:36","doi":"10.21203/rs.3.rs-8160185/v1","editorialEvents":[{"type":"communityComments","content":0}],"status":"published","journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true}}],"origin":"","ownerIdentity":"d28d4803-9ae6-4cc8-815c-55fcd50fa941","owner":[],"postedDate":"December 30th, 2025","published":true,"recentEditorialEvents":[],"rejectedJournal":[],"revision":"","amendment":"","status":"posted","subjectAreas":[],"tags":[],"updatedAt":"2026-01-28T09:53:58+00:00","versionOfRecord":[],"versionCreatedAt":"2025-12-30 01:02:36","video":"","vorDoi":"","vorDoiUrl":"","workflowStages":[]},"version":"v1","identity":"rs-8160185","journalConfig":"researchsquare"},"__N_SSP":true},"page":"/article/[identity]/[[...version]]","query":{"redirect":"/article/rs-8160185","identity":"rs-8160185","version":["v1"]},"buildId":"8U1c8b4HqxoKbykW_rLl7","isFallback":false,"isExperimentalCompile":false,"dynamicIds":[84888],"gssp":true,"scriptLoader":[]}