Strategy trumps size

THIS WEEK'S TOPIC: Is the business model of a huge, diversified conglomerate on its way out?

Lawrence Loh Director, Centre for Governance and Sustainability NUS Business School

Corporate strategy has been fixated on focus. The business mantra is to stick to the knitting. Do more of the same and you get economy of scale. Yet there are merits of variety in the product offerings - there is also economy of scope. We are all too distracted by failure stories of conglomerates such as General Electric (GE) and Toshiba. Yet there are success stories in Amazon and Microsoft. In the new digital era, we are seeing formidable aggregate approaches in mega-platforms such as China's WeChat and even super-apps such as Singapore's Grab and Indonesia's GoTo. Actually, the problem is not about the conglomerate model. It is about having good strategy.