Companies Fuse; I Confuse

Businesses seem to follow a very cyclical trend. From what I have read, in the 1980s companies were asked by consultants to concentrate on their core competence and shed the non-core divisions of work. Most companies took this suggestion and ended-up being specialists in some segment. With the other part of the cycle coming up now, companies seem to be diversifying again. No IT company wants to be limited to one vertical and every other company wants to diversify atleast within its own vertical. Look at the mergers and acquisitions happening around us these days - Oracle acquiring i-flex, Adidas taking over Reebok and plans of Cisco buying Nokia
All of these make me confused. How does concentration on core-competence pay in one decade and diversification pay in another? Are businesses really cyclical, or is it just the need for some sort of change?
Why does MBT want to diversify with less dependence on Telecom and why does Sasken want to restrict itself only to Telecom?

As I try understanding
About banding, branding
and things that are demandingly confusing;

Business, to me, still remains cryptic
If nothing, its being cyclic
Only makes my head’s orbit elliptic