Is diversification suitable for China's business groups?

摘要

The rapid development of diversification strategy in China has attracted much attention. There are so many companies succeeded but more failed through diversification. Diversification is the main strategy of Chinese business groups and has much influence on the performance of enterprises. Based on the existing literature of this theme, this paper has synthesized some conclusions from domestics and overseas to find out the relationship between diversified strategy and performance. After the review on these articles, we can find that related diversification outperforms unrelated diversification and single business strategy. So it is very urgent for Chinese business groups to return to the core competency and to gain international competitiveness.