The Invest Strategy Choice Of Diversication Or Specification For The Enterprises

With the popularity of GE style,the problem about Diversication Strategy is becoming the crazy subject in the past one year after the original warm and then the cold years. More and more enterprises are trying the Diversication Strategy with the guidance of "Don't put all eggs in one basket".The Wunianye Co. is trying into the industry of CMOS chip, the Bodao Co. is attempting to the industry of car, the Chunnan is trying into the industry of car and internet, the Xingfei is attempting to the industry of the cold storage truck, and so on. We are so surprised at so many and so faraway fields in the new Diversication tide. There are many washing powder manufacturers attempt to drinking water, the medicine manufacturers attempt to drink, the white home appliances to the black home appliances or the black home appliances to the white home appliances,and so on. Athough there are some successes, there are innumerable failures. So more and more people doubted the diversication strategy. Is the diversication strategy the trap or pie? Ought China to use the diversication strategy?This article researches the Strategy choice of or specification for the enterprises starting from above. The first chapter introduce the concept of the diversication and specification strategy, the advantage and the disadvantage for the diversication and specification. We think there is conflict between diversication and reinforce the core competence. Diversication can disperse investment venture, but it will weaken the core competence at the same time. The second chapter analyse the situation of Chinese enterprises practise the diversication strategy. In view of the innumerable failures and the most people's disagreement to the diversication strategy, the author analyse the cause for Chinese enterprises' failures,which is not attribute to the choice of diversication strategy. The facts that most of Chinese enterprises' choice for diversication,which is not used popularly abroad ,is decided by the scale, strength of the enterprises and the entironment around the enterprises. The choice for thediversication includes the practical meaning,not like the criticism of the most of public opinion. The reason why most of the diversication strategies fail is the incorrect opportunity, the inadequate strength. Many enterprises implement the excessive diversication strategy when they have no core competence. The third chapter analyse how to choose the diversication or specification strategy for the enterprises.I conclude that diversication and specification are both the invest strategy for the enterprises. Each has its advantage or disadvantage. The diversication strategy is probably both trap and pie for enterprises. The choice of diversication for Chinese enterprises is determined by many internal or exterior factors. In general, the small company ought to prefer the specification strategy for its small scale and the high long-term cost. The big strong company can carry out the diversication strategy after realize the scale-economics. But it must carry it out step by step,emphasis on the related diversication, grasp the degree,so that we can benefited from the strategy.