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Break It Up!

Cendant Corporation will become four companies this summer. As the article states on the bottom, this is part of a recent trend of large corporations splitting up into smaller parts. With a possible AOL Time Warner break up to come, the trend is only getting started.

I believe this trend points to companies’ need to truly perform and reach consumers, something that seems only possible when a company is focused on a specific product line or market. It seems as this trend continues synergistic and diversification strategies will be forced to the fringes. Of course, some would say many of the fragmenting companies shouldn’t have come together in the first place–AOL Time Warner never succeeded like common sense dictated, Time Warner’s content reaching AOL’s huge membership.

In our reality of information at our finger tips and an infinite number of products and services vying for our attention online, a company’s output really has to truly shine and connect with the public. Perhaps that which is the product of small teams in specialized companies will be the only ones do succeed in doing that. Then again, Google keeps expanding.

Which do you think is better: diversification or specialization?

KO