The Torygraph’s economics and business commentators (Ben Marlow being the other culprit) do seem to be good at missing the point:
We used to have a name for quoted companies that collected together lots of different businesses under a single corporate umbrella – they were called conglomerates. They rampaged their way through the 1970s and 1980s turning whole industries upside down. But they disappeared because they ended up destroying more value than they ever created. We certainly don’t need them to make a return in the 2020s.
It’s entirely true that the strategy ran out of steam. But that’s not the same as value destruction.
The conglomerates burned brightly for a couple of decades, and, in fairness, shook up some stagnant companies at a time when they needed a blast of fresh energy.
As with evolution itself, there’s no one strategy that works all the time. It is strategy for the surrounding environment that matters, if being the environment that selects for success.
So, asset stripping conglomerates. If the strategy succeeds in making money for shareholders then that means there are underused assets that require shaking up out of their stagnancy.
If there are pots of money looking for such and not finding them then we don’t need to give a damn about that, do we?
That is, the activity itself, the existence or not of it, shows that it works or doesn’t. And if it does then we want it, if it doesn’t then who gives a shit? The test is the environment and success in it.
And with a number of large companies pissing the cash away on varied wokeisms, who is absolutely sure that there aren’t assets out there to be shaken up?