4 ms·

The following is my 2 cents based on opinion from what I've learned in business school. The American way is about focusing on your core competencies and what y

The following is my 2 cents based on opinion from what I've learned in business school. The American way is about focusing on your core competencies and what you're good at. Banks outsource their IT services, real estate and etc to free up capital to focus on their banking services. This is what they've taught at my particular business school and this is how business "should" be done. It's just not efficient to spread yourself into other markets. Asian businesses sometimes form large conglomerates because of the lack of infrastructure in place in emerging economies. There aren't many smaller companies that can make rice cookers. There aren't many entrepreneurs that will want to make innovative rice cookers. Access to capital and VC money, I would assume, is really tough in Asia. Samsung makes chips but there's no buyer for those electronic chips so they start to make products that use those chips and handle every aspect of the supply chain all the way to the end-consumer. You'll see that in North America, many companies are broken up to focus on just 1 part of the chain. Other parts of the chain may be less profitable and often gets divested or spun off. Shareholder pressure sometimes dictate that.

wozniacki 12y ago
Hmm. Interesting. Historically, was there ever a period when American companies - tech or not - ever dabbled in this sort of thing, I describe? Or they simply haven't experimented in conglomerates, even prior to the WWs. I am trying to see if this was a measure, reactive to some historic event or if American makers from day one, have always preferred specialization in vertically siloed businesses. Increasingly, software companies like Amazon (with Kindle, Fire phone, Fire TV, Echo etc) are finding that they are having to foray into things like hardware which they are ill-suited for, even if ideally they'd very much like to remain software companies. These new developments are interesting to watch.

wozniacki 12y ago

Hmm. Interesting. Historically, was there ever a period when American companies - tech or not - ever dabbled in this sort of thing, I describe? Or they simply haven't experimented in conglomerates, even prior to the WWs. I am trying to see if this was a measure, reactive to some historic event or if American makers from day one, have always preferred specialization in vertically siloed businesses. Increasingly, software companies like Amazon (with Kindle, Fire phone, Fire TV, Echo etc) are finding that they are having to foray into things like hardware which they are ill-suited for, even if ideally they'd very much like to remain software companies. These new developments are interesting to watch.