Diversification Select Baned On The Competence Theory Of The Firm

Diversification is the issue that is generally paid close attention to when the firms have developed to the certain stage, and it led to the vast researches and the deep discussion by the theoreticians and the entrepreneurs. The corporate strategy of diversification should be studied from the new point of view, that is the competence theory of the firm. Diversification as a long-term strategy of development, on the one hand, it matches the competence of the firm with the business engaged by entering the new industries, reorganizing the existing resources and using fully the excess competence; on the other hand, it prompts the upgrade of the competence of the firm and the improvement of the competence system to adapt the change of the outside by the pattern of resources-deepened or resources-expanded, matching dynamically the competence of the firm with the business engaged during the process of the change to keep the long-term competitive advantage of the firm.In the dissertation, it is carried out the economic analysis on the diversification, which is viewed as the important strategic way of improving the efficiency of the usage of the competence and upgrading the existing competence of the firm. Firstly, it is interpreted the causes of the diversification with the competence theory; Secondly, it is established model in order to analyze the election of diversification that based on the competence theory of the firm. At last, the article pointed out some advice and considering for our country's diversification.