Thursday, August 25, 2011

Isn't generalization special?

Individual businesses, and industries, often bounce between two extremes. On the one hand, you have businesses that offer a lot of different products. On the other hand, you have businesses that specialize in one thing.

Anyone remember Mita? This was a Japanese firm that consistently talked about how they only produced copiers. Here is an Australian Mita commercial from the 1980s.

Although I can't find any documented evidence of this, I seem to recall that Mita eventually had to tweak their message a little bit. They got into some other business - perhaps it was fax machines - and they were then forced to say that fax machines were just specialized versions of copiers, so Mita was good at those also.

Well, Mita no longer exists as an independent company - Kyocera Corp bought them out in the late 1990s. And today, Kyocera Mita is all about making great...printers and multifunction devices. And the parent company is all over the map - over 20% of its sales comes from ceramic products and components.

Mita isn't the only "one product company" to go away. Jake Kuramoto cites a number of tech companies that have a variety of offerings, including Apple, Google, Facebook, Amazon, and Microsoft. One of these companies, Google, acquired a chunk of my former employer - back when I worked for Motorola, the company offered everything from AFIS to police radios to cell phones to set-top boxes. Motorola then consolidated (selling off the AFIS, dividing the radios and phones into two companies), which gave Google what it needed to expand.

The "soup to nuts" approach isn't limited to the consumer sector. Kuramoto's employer Oracle continues to expand, creating a "stack" that now goes from hardware all the way to business-specific applications.

Perhaps this is all a reflection of the economy - some companies are selling out because they can't make it alone, and other companies are buying them up as a defensive move. Of course, Motorola chose to break up rather than expand because of the economy, so the argument doesn't always hold.

So, where will we be five years from now? Will we have a number of companies providing everything to everyone, or will we have a myriad of specialty firms?
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