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by Alan Hargreaves

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Entries in strategy (37)


An environmental checkup for business

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How’s your economic eco-system?

Business is often asked to consider two popular notions: sustainability and the environment. At times – and probably too often – they are simply buzzwords; at other times, they focus on the need for everyone – business included – to take responsibility for the sustainability of the planet.

That’s all well and good but it need not stop at the natural environment. We can learn a lot more from environmental science across the entire spectrum of management practice.

Your business does not operate in a vacuum. It depends on all sorts of stakeholders. Just think of the six basic ones: shareholders, managers, employees, suppliers, customers and the community. Together they make up the ecology of your business. Call them species if you like.

They all depend on each other and have needs which have to be served. Often we focus only on serving the customers. Yet you can’t expect your business eco-system to function optimally if you ignore the others.

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Retail therapy and management

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Window shopping for business strategies

The business landscape is littered with disasters based on “expansion by acquisition”. What seemed like a great idea to combine two small firms to make a much bigger one often leads to a smaller one, or to none at all.

Sometimes it’s spectacular. America Online and Time Warner merged at the turn of the millennium. In 2003, they wrote down the value of their combined entity by US$99 billion. Small businesses don’t get it right either. When the “” boom ended, literally thousands of small firms went bust after basing their strategy on rolling up small enterprises with rough synergies.

Yet you only have to look around to notice that many survivors are combined entities. Virtually every major bank has grown through acquisition. Most law firms or accounting practices I knew in my youth now go under the name of some merged entity. What are the drivers behind this growth model? There are three:

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