In the highly competitive and constantly evolving modern business environment

enterprise diversification has become a crucial strategic consideration. This paper comprehensively examines the strategic choices and risk prevention measures of enterprise diversification based on core competence. It begins by analyzing the concept and significance of core competence and its profound relationship with enterprise diversification. Subsequently

it meticulously explores different strategic models of enterprise diversification

including related diversification and unrelated diversification

along with their respective advantages and disadvantages. Moreover

it deeply delves into the various risks that enterprises face during the diversification process

such as market risk

management risk

and financial risk. Finally

corresponding risk prevention strategies and measures are proposed

including strengthening market research and prediction

improving corporate governance structure

and optimizing financial management. Through a combination of theoretical analysis and case studies

this paper aims to provide theoretical support and practical guidance for enterprises to make scientific and rational diversification strategic decisions and effectively prevent risks

thereby enhancing their competitiveness and sustainable development ability in the complex market environment.