AT LARGE

It's just not fair. Right when the Sydney Film Festival is finally over, Wimbledon starts. Am I not to be allowed a single night's sleep? Is this some kind of conspiracy between the organisers of the Festival and the All-England Lawn Tennis Club to ensure that I'm red-eyed and grumpy for a solid month?Speaking of conspiracies, if I told you that one of Europe's biggest manufacturers of water processing and filtration equipment is about to purchase one of Canada's biggest beverage manufacturers, you'd probably say, "so what?".

You'd probably think that the water company wants to expand into more complicated refreshers and it has nothing to do with technology. That's certainly how it appears on the surface.

Being regular readers of this column, however, you must know there's more to it. What if I told you that the beverage company, some years ago, purchased an American organisation that owns theatres and theme parks, which are good outlets for the sale of drinkies? It still doesn't make sense that the water company wants in on the act, does it? I suppose there's some vague connection between water pipelines and, for instance, water slides, which one might find at a theme park. I'm reaching.

What if I told you the water company has also expanded beyond its original raison d'etre, exploiting its access to underground pipes to become a major provider of high-bandwidth cable for pay TV and Internet? Almost makes sense, but doesn't quite. Pay TV at theme parks, perhaps?Add to this the fact that the drink maker, in purchasing its theme parks and theatres, had to acquire the movie studio that owned them. Now it all becomes clear. All the pieces fit. It's part of the trend I mentioned a few columns ago, with movie studios conspiring with networking companies to deliver films to theatres and homes digitally and thereby undermine the very fabric of society. Within a few days of that previous column, 20th Century Fox and Cisco completed just such an experiment, apparently successfully. Way of the future.

Diversification is an odd thing. What on first glance appears to be a nonsensical purchase by a French water processor (Vivendi) of a Canadian beverage maker (Seagram) turns out to be a cable provider (Vivendi) buying a few truckloads of content (Universal Pictures). As it happens, Vivendi doesn't want the beverage business - that's just a sweetener. Seagram tried to sell off Universal years ago, but the studio wasn't saleable thanks to box-office disasters such as Babe 2 (did you see it? Me neither). Vivendi is buying Seagram outright, and plans to sell the drinks business to offset Universal's debts.

It reminds me of the odd pedigree of Nintendo, the Japanese video game company that started off as a calligraphy outfit, making greeting cards in the 19th century. During the American occupation after World War II, it expanded its business into making playing cards for soldiers stationed in Japan. After the occupation, it expanded its playing-card business to other amusements and games, until by the 1970s it was an easy leap into video games.

This is a company that has, at every stage, been able to recognise its core strengths and adapt to a changing marketplace. It has not fallen into the trap that catches so many companies, of confusing "core products" with "core strengths". If times change, your core products, that have been the basis of your business up until now, may in fact be a liability.

I understand that a rough translation of Nintendo is "leave luck to heaven".

This should be a mantra for anyone hoping to still be in business five to 10 years from now. Things change too fast for you to think that what's a good product now will still be a good thing to base your business on then.

My favourite story of a company adapting vastly outside its original brief involves a US-based software developer which I believe has ceased to exist, unfortunately. Its original business was outlawed in the US, so it adapted into a research company. As a research company, its business slowly dried up (not a core strength), so it started selling its research tools. From there, it began developing research tools to sell to specific customers and then started selling a range of "off-the-shelf" statistical utilities. From there, it was a small step to being a general software developer. But through all this it maintained its original name: Monterey Bay Whaling Company.

Enough ramble. Back to Wimbledon.

Matthew JC. Powell is hoping Martina Navratilova will win the ladies' doubles, and doesn't much care who else wins anything. Share your opinions on mjcpowell@ozemail.com

Join the newsletter!

Error: Please check your email address.

More about Nintendo AustraliaOzEmailVivendi

Show Comments

Market Place