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This certainly seems to indicate that great product diversity is not necessary for strong financial performance in the short to mid term. I think the question h
by obviator 16y ago
This certainly seems to indicate that great product diversity is not necessary for strong financial performance in the short to mid term. I think the question here is more one of longetivity - how long will this "one trick" remain relevant, and retain a large enough market to keep increasing the profits?
All those oil companies would run into a lot of trouble if, say, the oil ran out. On the other hand, Microsoft could keep generating substantial revenue even if people stopped buying the XBox for example. Their other (major) products such as Windows and Office provide enough diversity to keep them relevant, despite the loss of one or two major markets.
- hugh3 16y agoActually I think the bigger problem with what I said is that the huge one-trick companies I mentioned (all in mining/oil) are insensitive to competition. The market can easily support a large number of mining/oil companies, all plugging away steadily on their own bits of dirt. Google, on the other hand, is the dominant search engine mostly because it's the best, and if anyone ever develops one that's significantly better then Google can have its lunch eaten quite quickly.