Core Competence And Diversification Of The Interaction Between Research,

Diversification was a popular word for American companies in 1970. Most companies diversified to pursue high-speed growth. This trend has been changed since 1980 when GE withdrew some business first. More and more companies begin to cut relevant business form their business portfolios to attain sustainable competitive advantage in core business and emphasize core competence. The natural conflict between diversification and core competence means a company is very difficult to balance them in practice. This thesis tries to find out the relationships between diversification and core competence and construct a dynamic model.There are three chapters in this thesis. Chapter 1 introduces the definition s and concepts about core competence. Chapter2 outlines the strategic intent and influence of diversification. Chapter3 and Chapter4 analyzes the relationships between diversification and core competence. Chapter5 constructs a dynamic model of diversification and core competence.