Immature Market Enterprises Not Related Diversification Move

Diversification strategy is one of the important ways which Enterprises apply to development and expansion. As a research focus, it has been discussed for nearly half a century by scholars. For the US-led Western developed market countries, since The World War II, diversification strategy has been widespread applied. But since the 1980s, some serious problem occurred in the process of diversification. Therefore, enterprises gradually deduced their scale of diversification, especially reflected by the reduction of non-related diversification, which was called refocussing strategy. Western theorists have largely denied the non-related diversification. However, from the development of China's enterprises' practice, the diversification of this period is still operating non-related diversification. In practice, even more enterprises' non-related diversification has been succeeded. So it is unable to explain the motives of China's enterprises' non-related diversification now just by the existing western theory.Judging from the domestic research on diversification, it can be divided into two parts: one is focused on the performance of diversification and the other is about the motives of diversification. However, most of these research is based on the framework of developed countries which is unsuitable to explain the phenomenon that non-related diversification success in China. Therefore, this paper attempts to provide a new framework that is based on the impact of imperfect market to explain the non-related diversification in China. Besides the enterprise's internal and external conditions for China's enterprises, the framework builds a motives model to provide our enterprises some viable explanation of the theory and practical guidance.First of all, the paper has reviewed literature about diversification. On the basis of this, we build a motives model which includes the imperfect market characteristics, internal and external conditions for enterprises. Then, we discuss the model specifically. The internal motives of enterprises include enterprises' remaining resources, the state of business, organizational structure and corporate culture. The external motives of enterprises are about the limited market capacity and diversity, as well as the economic cycle. Imperfect market's impact on non-related diversification is mainly on the industry factor and government intervention.Then, the paper select three corporations of non-related diversification to case study. They are Dun'an groups, Wanshili groups and Tianmushan medicine.According to the motives model, we compare their non-related diversification for each motive carefully and deeply. In the process of case study, we summarize the common cause and characteristics in their non-related diversification which form the conclusion of the study.Finally, according to research findings, we give some countermeasures and suggestions for Enterprises' non-related diversification. Meantime some prospect for further study is also provided.