Basic characteristics of core business

2. The product has strong profitability and a good profit model, which is not easy to copy;

3. Strong anti-competitive ability and high consumer loyalty to products;

4. It can improve the comprehensive ability of enterprises and stabilize the expansion strategy of core business of financial foundation. Ways to expand core business. None of the world's top 100 enterprises developed by accumulating profits, but by organizing and coordinating social resources to expand their strength. As george stigler, a famous American economist who won the Nobel Prize in Economics, pointed out: No big American company grew up without some degree or some way of merger, and almost no big company grew up mainly by internal expansion. In fact, the M&A behavior of large enterprises in the world is indeed increasing. First, "strong alliance" to form a larger company and create a monopoly position; The second is to "extend the tentacles" and occupy a larger market share as much as possible.

Successful M&A should consider whether it can strengthen a company's overall strategic advantage and core competence, and put the company in an advantageous position that it can't achieve in its own operation. Enterprises should have outstanding leading or relatively leading achievements in product management and technological innovation before using capital operation to expand their scale rapidly. Without product management and technological innovation, blindly expanding the scale and even relying on administrative means to piece together enterprise groups will eventually be eliminated by the market. Strategic alliance refers to the joint action of two enterprises to take risks and enjoy benefits in any equity or non-equity investment in order to achieve specific goals. There are three specific forms of strategic alliance: one is loose relationship, including network organization and opportunistic alliance; Second, contractual relationship, including subcontracting, licensing and franchising; Third, all formal relationships, including joint ventures, joint ventures and cooperative enterprises.

Using strategic alliance to expand core business can make up for the lack of resources when enterprises enter new industries, and through cooperation, multiplier effect and sustainable competitive advantage can be obtained. However, there are also many problems in strategic alliances, mainly due to different motives of all parties, inconsistent pursuit of interests and, more importantly, sometimes lack of trust. In addition, the alliance may sometimes cultivate stronger opponents than itself.