| Diversification strategy is an effective strategy of enterprise growth. But the reality shows that it is not a ripe management mode; traditional diversification strategy has a lot of shortcomings.The core competence theory brings enterprise's strategic management theory into a new developing stage. In this paper, we will show that how to use core competence to overcome traditional diversification's shortcomings, then offer some help with practical operational meaning for our country's enterprises which implement diversification strategy.Firstly, diversification strategy will be generally described, including it's concept definition, concrete form, competitive advantage and traditional diversification strategy's shortcomings. We will combine reality with theory to study "what is the diversification strategy?" and "why do we implement diversification strategy?"Then, we will carry wholly new study on diversification strategy based on core competence, so what the correct diversification strategy is will be solved. Enterprise should consider the corresponding between it's core competence and the demand of diversification strategy when it decides to implement diversification strategy. The choice of strategic business unit (SBU) should consider strategic correlation. Regarding strategic assets as SBU correlation criterion will bring three lasting advantages that are " assets improving ", " assets creation " and " assets fission ", and the core competence is the catalyst in strategic assets " production mechanism ". The correct entrance way will bring three sorts of advantages which are " competence improving"," competence creation" and "competence fission", then the enterprises performances will be improved.Finally, We will study on how to carry out strategic management during the process of implementing diversification strategy. Three kinds of methods based on core competence have practical operational meaning; they can offer some help for our country's enterprises practically. |
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