Diversification Of Chinese Tobacco Industry

Diversification is an advancing pattern which is often the choice of developed firms. It means the developing strategy that an enterprise sales two or more basically different-used product or service. Much attention has been drawn on issues of diversification by researchers of various fields. But the results attained seem to be divided. Corporate diversification first emerged in large scale in China in1990’s. However, the benefit of diversification didn’t appear, what happened to Chinese corporation is, on the contrary, a tragedy. Why is that? How to decide the ideal pattern of diversification in contemporary China? How can corporate carry out the diversification effectively and moderately?Our research first review the theoretical researches and practices of Chinese and foreign enterprises, including the definition, the classification and the inner motive. Then we review the practice of the world’s tobacco industry, taking that of Shanghai as an example, and conclude the experience and lessons of the diversification of this industry. After this the focus comes to the diversification practice of Yunnan tobacco industry, first the characteristics of the industry, and then the successful experience of the major industry of tobacco, followed by the conditions, competency, and constraints of the industry’s diversification practice. Combining the lessons of other tobacco industry, we present the future direction for the diversification of Yunnan tobacco industry. Finally comes the managerial suggestions and the ideas for constructing the managerial system for the diversification practice. In sum, this research summarize the regular patterns of the national industries, especially the tobacco industry, and suggests the future direction for diversification strategy, and makes a contribution for the exploration of the diversification of the tobacco industry.