The Analysis Of Refocusing Strategy Based On Core Competence

The process of strategic management is that enterprises change constantly with the changing background or environment. It can be seen from the evolution of strategy in practice that, with the variation of market environment, enterprises' overall strategies have been changed from specialization to diversification, and then to refocusing. Under the specific period, as one form of enterprises' overall strategies, diversification strategy helps many enterprises to enter the widespread industry, and creates broad space for enterprises' development. However, diversification strategy is not adaptable in current economic environment which is unceasingly improving, along with the competition is ever-increasing, the consumption is more rational, and the intangible assets are more important to enterprises. It may make the enterprises fall into deadlock if some unrelated areas set foot in. Thus, refocusing strategy comes into being as the correction and supplement of diversification. It can instruct enterprises to optimize the disposition of resources, to straighten the management center, to develop and consolidate the core competence, and to further enhance the capacity when facing the changing industry and the more competitive market. Only in this way, enterprises could accommodate themselves to current environment for further development. Refocusing strategy has already become a hot issue in theoretical and industrial circles. However, the theory of refocusing strategy has not yet been a system. Most of the research is concentrated on the aspect of understanding the "core". The application of the research is also deficient when instructing practice. Therefore, this paper focuses on the application of the theory, and constructs the two-step pathway of refocusing strategy through the drawing of core competence theory, with the hope that it can be helpful for enterprises to sustain the continuous development.By comprehensively using the theory and the method of economics and administration, this paper takes the development and enhancement of core competence as the breakthrough point, decomposes the process of implementing refocusing strategy. This paper also proposes that refocusing strategy is constructed with the two sections of "profit from the core" and "beyond the core" for further development of core competence. The first chapter is the introduction part which provides the background, the significance, as well as the content and the method used in this paper. By reviewing and researching on the past strategic practice and references, the second chapter re-recognizes refocusing strategy, and explains that it is the correction of diversification. The result may not be specialization but remain to be diversification. On this basis, the paper points out that refocusing strategy is constructed with "profit from the core" and "beyond the core". The third and the forth chapter analyze the two sections of refocusing strategy separately. In the third chapter, the paper points out that the key point of "profit from the core" is constructing the core business, and also it introduces the way to identify core business by mainly using the method of qualitative analysis, and then the measure of "profit form the core". The fourth chapter classifies the extending action, summarizes the types of adjacent extending opportunity, and then introduces the steps of identifying opportunity. Finally, the conclusion part of this paper instructs the two-step pathway of refocusing strategy. By taking the process of NOKIA Company's development as a case, this paper proves the conclusion of the applicability of the two-step pathway of refocusing strategy.