Study Of Enterprise's Competitive Advantage Based On Moderate Diversification

The success of enterprise comes from competitive advantage, and the purpose of diversification, which is taken, as a means of development, is to make the enterprise obtain competitive advantage. However, any thing has its two sides. Although diversification can help the enterprise gain competitive advantage in nature, its inner disadvantage can also weaken the enterprise's competitive advantage. For this reason, beginning from the study of the sources of enterprise's competitive advantage, based on former researches, concentrating others' strong points, using systematic and dynamic ideas, and integrating the strategic factors of industry, resources, core competence, innovation, organization, culture and organization's study, the paper brings forward the model of competitive advantage's dynamic integration originally. Based on this model, it discusses and analyzes the relationship between diversification and all kinds of factors in competitive advantage, and how to realize the adaptation between diversification and key factors in them to gain enterprise's competitive advantage.In Chapter V "study of moderate diversification and enterprise's competitive advantage", based on references to other scholars' definitions of diversification degree, and combining theory with case, the paper discusses the general and practical meanings of relative and moderate diversification to realize enterprise's competitive advantage.In chapter VI's demonstration analysis, by referring to other scholars' demonstration analysis means, the paper takes samples from 644 industrial companies in China's security market of 1999, collects and analyzes relative data, and tries to find out the relationship between diversification degree and enterprise's performances from644 industrial companies in China's security market of 1999, collects and analyzes relative data, and tries to find out the relationship between diversification degree and enterprise's performances from these data. From them, it discovers that, in all the companies in China's security market, the economic benefit of relative and lower degree diversified enterprises is distinctly better than other types of enterprises'. So, the relative and lower degree diversification, for the purpose of cultivating continued competitive advantage, can help the enterprise to gain competitive advantage.