What Is Trade Diversification?
Market diversification strategy refers to the expansion strategy of an enterprise operating two or more industries at the same time. It can also be called "multi-industry operation". There are three main modes: concentric diversification, horizontal diversification, and comprehensive diversification. Concentric diversification is a diversified operation that uses existing technologies and advantageous resources to increase new business in the face of new markets and new customers. Horizontal diversification is a diversified operation that uses new technologies to increase new business for existing markets and customers ; Comprehensive diversification is a diversified operation realized by directly using new technologies to enter new markets.
Market diversification strategy
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- Chinese name
- Market diversification strategy
- Alias
- Multi-industry operation
- mode:
- Concentric diversity, horizontal diversity
- Make use of
- Legacy technology and superior resources
- Market diversification strategy refers to the expansion strategy of an enterprise operating two or more industries at the same time. It can also be called "multi-industry operation". There are three main modes: concentric diversification, horizontal diversification, and comprehensive diversification. Concentric diversification is a diversified operation that uses existing technologies and advantageous resources to increase new business in the face of new markets and new customers. Horizontal diversification is a diversified operation that uses new technologies to increase new business for existing markets and customers ; Comprehensive diversification is a diversified operation realized by directly using new technologies to enter new markets.
- The basic requirement of the market diversification strategy is to continue to consolidate and develop our country.
- The deep background of the market diversification strategy is the objective requirement of the globalization of the world economy and the all-round development of China's opening to the outside world. With the development of the trend of economic globalization, more and more countries in the world have become more and more deeply integrated into the global economy through open participation in the international flow of various resources. This makes the world economy today not the capitalist world economy when it was formed more than 100 years ago, but the world economy including developed capitalist countries, developing nationalist countries, socialist countries and other types of countries. ; Making today's world market not the capitalist world market when it was formed more than 100 years ago, but the world market that includes all types of countries. Correspondingly, China's opening up to the outside world is an all-round opening to all types of countries in the world, participating in and utilizing foreign markets in all directions. Especially the developing countries, which account for more than three-quarters of the world's population, although their current market share in the world is not very large, their market potential is huge, and since the 1980s they have generally adopted more openness than in the past Much more foreign economic and trade policies, and thus the market potential is becoming a real expansion of market share. According to the forecast of the World Bank report, the share of exports to developing countries during the period 1992-2000 will increase from 25% to 40%. Therefore, China's opening up to developing countries does have many articles to do.
- The practical relevance of the market diversification strategy is the existence of international trade protectionism and the original over-concentration of China's foreign trade market. In recent years, international trade has further developed towards liberalization. At the same time, international trade protectionism has also risen. The existence and increase of discriminatory trade barriers have exacerbated international trade conflicts, eroded the multilateral trading system, and impeded free and healthy trade. However, due to historical and objective reasons, China's foreign trade market has been over-concentrated, and its exports to developing countries, the CIS, and Eastern European countries account for a small proportion. The market is too concentrated, and the risks will be very large. In addition, anti-dumping cases and non-tariff barriers against China's export products will continue to increase. This is especially true. In order to alleviate the negative effects of protectionism and regional grouping, avoid market risks caused by excessive dependence on a market, and strive for a favorable position in international market competition, it is necessary to implement a market diversification strategy.
- Of course, diversity does not preclude focus. China's opening up to the outside world is comprehensive and focused; China's foreign trade market is diversified and focused. Developed countries should always be the focus of China's opening up and foreign trade. This is because the imbalance in world development is objective, and the developed countries have the largest share in the world economy and world market, and their economic scale and market size are huge. With them, the opportunities to expand the scale of China's foreign trade will increase. Moreover, advanced economies and technologies in developed countries can help China's economic and technological level and international competitiveness to increase more rapidly. We implement the market diversification strategy to improve or avoid the situation of excessive imbalance and over-concentration in the external market. It does not mean that we can ignore the key points, exclude the key points, and the key points should be the meaning of diversification. Therefore, while consolidating and developing the hard-won major original markets (Japanese, American, European, and Hong Kong markets), we will make great efforts to open up new markets and strive to improve the market for Latin America, Africa, the Middle East, the CIS, Eastern Europe, Southeast Asia, and The proportion of trade in China's neighboring countries has increased.