Growing Up

Every major business enterprise started out as a small acorn, once upon a time. *sighs* It hit upon a successful way of doing things, and multiplied rapidly. In Canada, Tim Hortons started as a hockey player’s dream for his retirement, and in the city of Hamilton, Ontario, that dream was born. I’ve stood in the original store of Tim Hortons, on Ottawa Street. It has some mementos of that time still there, and the store is still minting money for TDL corporation.

McDonald’s is another fast-food outlet that did remarkably well. *Greg nods* The burger field is choked full of entrants, and McDonald’s remains the #1 choice for the world by far. Distant #2 Burger King and even more distant #3 Wendy’s have their work cut out for them if they want to remain in business. Ronald McDonald takes no prisoners; he wields two machetes, one for each hand, and chops competitors down to size. Don’t let the friendly clown outfit fool ya.

Walmart succeeded wildly because it had Sam Walton at the helm. Early on, Sam had a store in a good location and the lease was canceled on him. He had to recover from that blow — a lesser man would have folded — but recover he did. Years later he came back to the same site with his Walmart chain and drove the usurper store out of business. Sam had a vindictive streak, and a streak of justice, perhaps.

Jeff Bezos’s Amazon.com beat Walmart in the online merchandising business, even though Walmart had years to see what was coming. Amazon “fulfillment centers” dot North America now, and stock enough goods to last a reduced population after a nuclear war 10 years. Bezos started out in books, and released the Kindle in homage to that beginning, but books don’t pay the bills. Power tools and iPhones do. So, Amazon went where the money was… everywhere but books. The lesson? Don’t count on the literacy of the buying public. You can get a credit card to pay for Amazon’s things without having the intellectual heft to go through a single book.

Although it’s a rough world, there is room to wiggle. Sometimes a whole lot of room. Like a worm in a crevice, the company that’s found its niche operates in a world of its own. There is sunlight, and nutrients, and water — information, and human resources, and cash flow, in other words. The world opens up to those with the right key.

How do you know if you have the right key? You’re expanding without opposition, that’s how. Things come almost magically easy for you. Once you’re the dominant player, you can buy out any opposition (that’s what Amazon.com did) or just steamroll over your rivals (like Harlequin Books, purveyors of romance works, does). The marketplace can be a forgiving place for a dominant player. When Tylenol headache medicine was poisoned, the P.R. backwash was terrible, but Tylenol, being a dominant player, was able to recover handily. Dominance is what every corporation seeks — it corresponds to Warren Buffett’s concept of a “moat” around the product, protecting it from the commoditization of goods that happens all too frequently. Dominance is why mergers are so common. You seek power to generate money, and money creates its own power in a vacuum, a virtuous circle. The successful company posts lobbyists in the national capital to make sure its voice is heard among policymakers.

The last takeaway from today’s article is that business can be smooth sailing, if you’ve tamed the waves of competition. You don’t have to struggle and experience strife. The businesses listed in this article have growing pains to discomfit them, and no other kinds of pain. They are pain-free.

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