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Buy Me Spank Me Call Me A Fool
Disney announced the other day that they're forming a strategy group to look at possible acquisitions. Must be a popular thing to do, as Microsoft was rumored to be writing a check for $500 million for a company the makes adware that annoys computer users. I guess it must be tough, sitting on about $60 Billion in cash. As many have pointed out time and time again, when you're a little company its not impossible to grow at 5-10 percent a year. But when you're huge monstrosity like Microsoft or Disney, growing at 5-10 percent means coming up with new businesses the size of Home Depot every year. And that's impossible -- unless you simply buy them outright. Therein lies the problem.
It's easy to get short-term gains out of deals like this, but in the long run you end up with a mismatch of organizations and missions, spread out all over the place. That's why it's critical to have a corporate strategy and critical success factors in place, and not some mealy-mouthed mission statement that says something like "provide value to our customers" Yikes! Is there any company in the world that this doesn't apply to? Perhaps some companies in the former Soviet Republic have mottos like "Steal from Customers. Bribe Officials and Put Money In Foreign Bank Accounts", but I doubt it.
I just got through reading an technical journal article called "Corporate diversification: identifying new businesses
systematically in the diversified firm". What's the risk? It becomes impossible to provide consistent messages across a wide variety of firms. Microsoft buys a company that makes popups appear, and also buys another company that keeps popups from appearing? It doesn't make any sense.
Trying to figure out who you are and what you stand for shouldn't be a tough thing to do, but it's getting harder and harder for some companies.
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