Diversification Strategy Based On The Core Competitiveness Of Enterprises Discussed

The strategy of diversification is a strategic way of helping the enterprise to avoid risks and enlarge scale to make it grow rapidly when it develops to a certain stage. Since the master, Ansoff, who is well done in product-market strategy, put forward the diversification strategy in 50's of 20th century, diversification strategy has been developed progressively, and become a kind of typical way to make the enterprise develop rapidly. However, since 1980s, many diversified companies have suffered great losses for over-diversification. A trend called refocusing appeared and was accepted by these companies. They began to reduce their business units to be less diversified and try to focus on their main business. A lot of companies in our country have suffered losses for over-diversification, too. Few has got success. The management strategy of diversification has been a hot topic these years in our country.As the core competitiveness theory appears, the theory of an enterprise's strategic management comes into a new developing stage. More and more researches indicates that whether enterprises can successfully develop diversification strategy or not, the key is based on the enterprise's core competitiveness. The enterprise's core competitiveness is a precondition and foundation. Only by developing the diversification strategy based on the core competitiveness can the enterprise succeed. So, in this paper, I'll show how to use the core competitiveness to overcome traditional diversification's shortcomings, and then offer some practical and operational help for enterprises in our country which implement diversification strategy.First, an overview of diversification strategy, the core competitiveness and diversification based on the core competitiveness will be given, including the diversification's definition, the diversification's classification, the diversification's intention and cause , the diversification's results, and the definition of the core competitiveness, feature and the evaluation of the present documents.Second, according to the analysis of cases of domestic and foreign enterprises that have carried out diversification, we integrate the theory with practice, and put forward a new research on diversification strategy based on core competitiveness, that is, diversification strategy of the enterprise should be based on core competitiveness. Only when pertinent diversification strategy is based on core competitiveness can diversification make the enterprise gain success.Third, we analyze the relationship between the core competitiveness and diversification strategy. The core competitiveness is playing the extremely vital role in diversification strategy. It is the important internal cause that the enterprise enters the multiplex domain and obtains constant success. The successful diversification strategy is the good union of the enterprise the core competitiveness and the market opportunity. Accumulating, keeping, using and developing the core competitiveness is a long-term fundamental strategy of the enterprise. Moreover, successful diversification strategy can make the enterprise accumulate experience, technology and resources, and specially, innovation which aims at the core technology may provide continuously technical power for the core competitiveness. It is helpful to consolidate and promote the enterprise's core competitiveness.Fourth, we've pointed out that if we carry out diversification strategy based on the core competitiveness effectively, the key is to confirm the object of diversification strategy reasonably, to cultivate core competitiveness, to reform the enterprise organizations, according to the request of diversification strategy, to reinforce multi-products effective management, and realize a coordinate effect step by step. We should establish a study organization, distribute the enterprise managing resources rationally, and carry it out step by step, developing diversification strategy gradually. Therefore, a certain direction has been given in terms of the theory to the enterprise that has carried out the diversification strategy.The study shows that the strategy of the core competitiveness is a new one for our country's enterprise's development. The development strategy of the enterprise should take core competitiveness as to guide. The enterprise's diversified management strategy based on the core competitiveness is more suitable for the realistic condition of our enterprise. It can guide the enterprise to carry out the diversification strategy so as to avoid the enterprise under the traditional diversified theories into the long-standing mistaken management ideas because of excessiveness diversification.