Ingar, I have found that it helps quite a bit to focus on being good at just a few things, and to ignore many other opportunities that are presented because it blurs the vision of the organization. Assuming that strategy, do you have any guidelines on how to determine when it is time to add other business practices?
Rolf, one of my favorite movie lines is from "Sweet Home Alabama." At the end of the movie, when Reese Witherspoon's character learns that she is still married to her formerly estranged husband, she looks to her father for guidance. He answers: "Honey, you can't ride two horses with one [backside]." This goes along well with your observation that it helps to focus on being good at just a few things. However, as I'm sure you have found, sometimes it makes sense to vertically integrate (maybe for quality control reasons), and sometimes it makes sense to horizontally integrate (when there are complementary products and services that you feel you can provide profitably). Although both can be appealing because of the revenue increase you can generate, the problem is -- as we both noted -- you can lose sight of your vision.
I found the following resources that are pretty helpful at listing the pros and cons:
Vertical Integration. My big disagreement with the authors is that they assert that you can expand your core competencies. I disagree. I think any integration would likely erode your core competency.
Horizontal Integration. Although this explanation leans toward acquisition, the pros/cons are still valid for organic horizontal integration.
Bottom line: integration can be very tempting, but we are well advised to tread carefully. If it erodes our core competency, we'll be at a competitive disadvantage.
Grow Strong!
Coach Grev
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