Research On The Choice Of Business Strategy About Specialization Or Diversification Of Chinese Enterprise

Strategy is destiny. The competition among the enterprise is whether the strategy is fit or unfit in the final analysis. As Drucker, the managerial guru, ever said: "To enterprise, future is crucial, the business strategy will force them to battle for tomorrow." The enterprise business strategies, which include their overall long-term programs and decisions, are vital to their survival and development.In this paper, the enterprise business strategies were limited by specialization and diversification. Research on the plentiful literatures, we made a definition for specialization and diversification firstly, discussed their positions in the entire enterprise strategic structure. Thus, we laid the analytic base of this paper.Based on their choice, this paper analyzed the advantages about specialization and diversification, and then made a suggestion. The specialization and diversification, are only one kind of enterprise's management strategies. None of them is preponderant. The choice between specialization and diversification highly depend on the enterprise's core competence, their internal and external context. The core competence is the source for enterprise to obtain and maintain their long-term competitive advantages. In order to survival and develop in the increasingly acute competitive environment, it is significant for firm to cultivate core competence.Finally, in view of the situation and main question existing in Chinese enterprises, this paper proposed an underlying ideas and countermeasures correspondingly. Based on the international competition, the resources and managerial capabilities of Chinese enterprises, it is the right choice for most of our enterprises to choose moderate diversification associating with their core competence, but not unrelated diversification.