Adapt or die

Recent news is that BT is buying a mobile phone company – it looks like they will chose EE over O2

Those of us with enough grey hairs will remember that BT used to have a mobile phone business, and unless I am mistaken it was the business that formed the basis of what is now O2.

Elsewhere, there have been stories of BHP Billiton, the mining giant, splitting off those assets that are now not considered “core” to the remainder of the business. It so happens that BHP Billiton was created from the merger of BHP and Billiton, and the demerged companies will look very like the originals.

None of these changes or reversals necessarily means that the original strategy was wrong. When BT sold off its mobile phone business, the core business of providing telecom services was in a mess. They had pension fund problems, labour relation problems and were still struggling with the transition from a publicly owned business to a private company.

Merging BHP and Billiton created a mining giant that was able to dominate the markets and created great value.

The Times said
“BHP merged with Billiton in 2001 in a $58 billion deal. At the time, the rationale of adding Billiton’s assets was to create a fully diversified mining group with roughly equal earnings from aluminium, base metals, coal and iron ore. However, Billiton’s assets barely contribute to the group’s profits today, having been overshadowed by a decade of soaring growth in its iron ore, copper and coal businesses driven by China’s rapid economic expansion.”

The market has changed, so these businesses have changed their strategy. Your market has changed – have you changed your strategy?

If you don’t adapt, you may be following the dinosaurs to extinction

 

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