[rollei_list] OT Public Companies (was Re: OT Kodak out of Digital?)
- From: Eric Goldstein <egoldste@xxxxxxxxx>
- To: rollei_list@xxxxxxxxxxxxx
- Date: Wed, 02 Aug 2006 18:20:09 -0400
Richard Knoppow wrote:
I think we mean different things by core business. My point was that
GE is very diversified. Probably the largest share of its income comes
from GE Capital which is pretty far removed from GE's original business.
However, they still make generators and lightbulbs.
I know your response is meant to be ironic but you've basically
encapsuled the difference between running a Fortune 100 company 50
years ago and running one today. The concept of a core business is
more important today than is was then. The world has turned much
flatter, markets are much broader, and the internal and external
customer's requirements have changed substantially. So viable business
tactics and production/distribution/marketing strategies must
substantially shange as well...
BTW GE is a well-diversified company with several discrete core
businesses that include internal manufacturing. By most traditional
measures it is the most successful stock in the history of the S&P
I don't know about running a Fortune 100 company 50 years ago but I
think the whole concept of what a business is has changed. Companies
like GE have become sort of branded investment services. Their
orientation is toward managing their investor's money rather than making
a product. This is a very critical difference because it changes the
emphasis from the market for products and services to the financial market.
GE is unusual in that is does have several discrete non-integrated core
businesses and is for the most part successful at running each of them.
Westinghouse, Xerox and any number of other corporations tried the same
thing and failed enormously. Yes the capital business was/is very
lucrative, ask General Motors (it kept them afloat for a decade).
These days a Fortune 100s sole responsibility to it's shareholders is to
show above average quarterly growth (for the most part profit, but not
always). That is where it begins and ends; shareholders are for the most
part disinterested in the 10 year or even 5 year plan for the
corporation. The classic case study for what we are talking about is
Berkshire Hathoway, which when I was a boy was a shirt maker...
BTW I think this is a terrible turn for the worse. When I entered the
work force, there was still room for ideas that had social utility as
well as profit potential. I was a corporate "do-gooder," developing
syndicated broadcast projects that delivered worthwhile (seemingly)
content which was corporately sponsored under the guise of
cause-marketing. We made hundreds of millions of dollars for both the
corporation and the sponsors. But such projects would not be bought into
today because they are labor intensive and broadcasters for the most
part have downsized to the point where such product could not be
produced internally, would not be accepted from a studio/syndication
partner unless it came presold, and would not be produced/presold by
them because the same manpower could be applied to producing reality
programming and with higher margins and lower costs.
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