Monday, August 08, 2005

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

8 Comments:

Blogger ioiio said...

U an MBA grad rite..

If this is the situation for a MBA guy.. Imagine the poor Engineers confusion :))

But someyimes it helps.. We know lil to get confused :))

08 August, 2005 04:48  
Blogger Jammy said...

@ioiio
More than how much you know, it is about how much you are expected to know. When one is expected to a lot, (s)he is bound to get confused with the superfluous info.
(Or it could only be a temporary phenomenon owing to my sudden state of confusion)

08 August, 2005 05:57  
Anonymous Anonymous said...

Hey ram,

This is Hari, ur earswhile colleague...

best wishes,
Hari

09 August, 2005 03:32  
Blogger Jammy said...

@Hari
Thanks for stopping by. Hope u r doing fine.

09 August, 2005 04:03  
Blogger Thrivikraman said...

Dei.. ur becoming a better kinda buisness analyst... :D

09 August, 2005 12:24  
Blogger Jammy said...

@Thiruvikraman
Thanks :)

09 August, 2005 23:26  
Blogger Vetty Max said...

Jammy I have always been of the opinion, which has been reinforced in the one year at IIMB, that strategy is a whole pile of nonsense.

Companies are analysed usually after their strategy is put into practice. Never seen any case suggesting that this is what the company should do and then showing that the strategy worked.

There was the Honda story about which BCG prepared some case, but then Honda just said that we just kept trying stuff and some of them clicked and we never had any strategy.

10 August, 2005 03:39  
Blogger Jammy said...

@Vetty
Yep, I too am not sure of the credibility of strategies. But I guess research helps in eliminating some amount of ambiguity in deciding the future road map.

10 August, 2005 04:55  

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