Empirical Study On Relationship Between Economic Performance And Diversification Based On Core Competence

Not only n the theory area but also in the business area, the diversificat(?)on is always one of topics which most receives disputed. Under the specific historical condition, the diversification once gave the companies in the west countries the huge income. It was just this reason that takes many companies into diversification without Giving it careful consideration. However, when facing the case of failure one after another, the people started to awake, and began to think diversification much more carefully than before . Since then, more and more theorists concentrate their study on "the diversification's effect on firm value". However, the result of their research based on business data of many companies was different: Some findings demonstration that diversification can improve enterprise's profitability. But some research gave the evidence that the diversification can bring enterprise heavy loss on their value. Based on these two Conclusions of research, it divided into two kind viewpoint: A kind of position implementation diversification strategy, but another kind then just opposite.Since core competence concept statement had found in the 90's of 19 century, a new solution outlet was provided to this question. Many scholars' research focus from "whether to carry on diversification" changed to "how to carry on the diversification". They proposed that, Enterprise's diversification should base on theirs core competence. This research just takes this viewpoint as the basic point. We take the enterprise scale and enterprise age which heavily effect enterprises' core competence's formation as two variable to Displace their core competence, and defined the core percentage of elongation to weigh the degree of the enterprises' utility on their core competence. Our research show that: first, the overall looked, the relationship between enterprise's achievements and the multiplex degree was non-linear. Second, when the enterprises' multiplex degree was similar, the enterprises' achievements and their age, their scales are change in the same direction; third, when the enterprises' multiplex degree was similar, the core percentage of elongation of the enterprises and their achievements are change in the same direction.At the end of our research, we give those enterprises in our country who are carrying on diversification strategy some suggestions: first, strengthen their core business, because it may provide the sufficient resources and the core competence for the enterprises' new business. Second, in the new service's choice, the enterprise must take the core competence as the basic point.