Over the years the one thing that has puzzled me about business is the quest for unending growth. It is not just a matter of needing to be further in the black than last quarter, but pushing the volumes and revenue side ever further. Problem is that every market is finite — there is a classic saturation curve that described the limited capacity of the market to consume product. There was a Futurama episode, I seem to recall, that described the destruction that came from Ma’s apple pies going from a local bake shop with small unit volumes and very high quality to a megacorp producing millions of cardboard imitations. The branding became all-important while the quality vanished. But they had their volumes…
When business saturates their available markets then they look for acquisitions of related businesses and others — their journey from a successful producer to the dark side continues. Eventually, I am sure, they will dump the founding company and go off into other directions — showing that the only real product they were interested in was making money. Laudable in some circles, perhaps.
In the natural world the only thing that behaves like the ideal business is a disease called cancer. Uncontrolled growth is clearly recognized for its destructive qualities. And the arrival of cancer in ones corpus is not greeted with enthusiasm. Strange that something so feared that we work hard to ‘cure’ is the model for business conduct.
Imagine my dismay, having written this the night before, to find a Reuters article this morning that Canada’s telecoms are investing in sports teams, banking and healthcare to maintain growth and profitability. With their traditional markets saturated and cash cows like cable TV gradually losing out to other services (probably Netflix and YouTube….) they are moving into completely unrelated areas. http://ca.reuters.com/article/technologyNews/idCAKBN0G134X20140801?sp=true