Growth Strategies: Product Acquisitions
In the theater business there are people who specialize in finding off-Broadway productions with potential. They then tweak them for the big time by reworking the script, recruiting better actors, improving overall production values, providing better promotions, and then relaunching them on Broadway where they will rake in the money.
Back in 2002, Inc. magazine had a brief yet memorable article about a man with a very interesting system for doing basically the same with natural food brands. He finds small regional brands with potential for broader success, acquires them, makes a few production and branding improvements, and then turns them into national brands by running them through his distribution system.
Growth Strategies: Marketing or Acquisitions?
Under some circumstances it makes far more sense to build a company through the acquisition of competitors than it does by attempting to grow organically with more marketing. Take, for example, most businesses which have a subscriber revenue model. Think of ISPs, cable system operators, cell-phone service providers. If an ISP, for example, wishes to start growing at a more aggressive rate it has two basic choices. It can ramp up its marketing efforts and budgets or it can explore a growth through acquisitions strategy.
Robert Greene talks about the lessons from his latest book Mastery.
You are probably familiar with his other titles The 48 Laws of Power and The 33 Strategies of War.
7 Wonders of the Industrial World
This BBC series is one of my all-time favorites. The frustrated engineer in me has always enjoyed these types of programs which show how huge engineering problems have been solved. I mention the series because I just watched the episode on the transcontinental railroad for the 5th or 6th time. Not all of the stories take place in the USA but they are all worth watching if you have an interest in this kind of thing.
History Channel’s The Men Who Built America
With more episodes being planned, I am keeping my fingers crossed that the series will cover the building of the first transnational railroad. This particular story is full of outrageous behavior by characters rightfully called Robber Barons.
Leland Stanford, railroad tycoon.
One of the most entertaining stories is about the financing of the western half of the railroad. This consortium began from the central California laying track eastwards while the other started simultaneously in the Midwest building eastwards. The plan was for the two to meet in the middle and connect their tracks. Both groups relied heavily on government support to make the enormous projects viable. This support came in the form of both land grants for right-of-ways and money. In some cases the right-of-ways were 20 to 30 miles in width. The cash component was paid out every time the line achieved a mileage milestone and not before. This created some cash flow problems for the consortiums. The western group headed by Leland Stanford and Collis Huntington received incentives from the federal government consisting of $24 million in financing and over nine million acres of land for railway rights of way.
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