Choosing Scope Over Focus
Advances in manufacturing technology are about to change the rules of competition and unleash a sleek new version of the old-school conglomerate. Call it the “pan-industrial.”
Since the 1980s, Western business strategists have preached focus. To capture economies of scale, move quickly down the learning curve, and develop core competencies, it’s best to operate in only one industry, or perhaps a few adjacent industries. Diversifying into unrelated industries is dangerous, the thinking goes, because it leads to complexity and unmanageable size without yielding economies of scope and other operational synergies. Indeed, Wall Street has frequently penalized multi-industry companies with ...
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