March 14, 2018

Bundling and Unbundling

The story published here is a story of bundling.

"Qurate" bundles mature companies. If indivdiual brands die, new mature brands are acquired. The third paragraph is a buzzword salad of the highest order ... masking what the holding company is truly responsible for.

A company like Google/Alphabet bundles together companies on the way up, playing for long-term value.

A company like Amazon bundles together companies through a Marketplace, collecting cheddar on each transaction. It doesn't care (in theory) whether individual brands succeed or not as long as the marketplace continues to grow - it would be great fun to play a simulation where companies stop participating in the marketplace (i.e. unbundling begins).

General Growth Properties or Simon bundle retail brands via their malls, collecting cheddar via rent. Some of their brands are dying ... their method for bundling is failing, resulting in the unbundling of their business model.

Wal-Mart bundles via product categories and in-store brands and via e-commerce brands that have hit the customer acquisition wall.

Nordstrom bundles via brands (Coach, Dolce&Gabbana, now Anthropologie (click here)), and are then bundled within mall developers ... bundling and being bundled ... while selling via e-commerce (thereby unbundling with mall developers). Coach bundles with brands, with developers, and then facilitates unbundling via e-commerce. Oh, and then Nordstrom bundles with startups (click here).

VCs bundle startups, placing enough bets to thrive in the long-term even though most of the startups bundled will fail.

Private Equity bundles failing companies, looking for a exit in the short-mid term. Private Equity happily bundles and unbundles as appropriate.

If you are asked what your "Amazon Strategy" is, rest assured that the person asking the question is not asking a more important question ... s/he should be asking "What is your strategy for bundling or unbundling your business?"


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