Quite interesting development: Paul Volcker is recommending that we break banks up into smaller, more secure pieces to reform the financial sector.
Very reasonable analysis, but it’s pretty rare in these days when the media praises every merger and acquisition as a way to improve customer reach, innovation, fresh breath, and more.
Longtime reader JM remarks the following:
Think about how much influence this current situation may have on the future definition for anti-trust suits brought on by mergers and acquisitions. What will be the maximum threshold for total market share that will be allowed? We keep hearing how these companies are “too big to fail.”
Will the government put in measures and procedures to keep this growth from occurring? Which industries will be affected? Will this make smaller companies more or less competitive knowing they will not or can not be absorbed by larger players?
Insofar as government will not want to keep pumping trillions into bad business decisions, a likely future is that anti-trust departments will be put on steroids.
Then again, Merck and Schering-Plough think that mergers are the way of the future. Their reasoning? Efficiencies and combined product pipelines.
Hasn’t that always been the rationale behind mergers in pharmaceuticals? And is it working?
Is it working in banks? Healthcare? Automobiles?
This is the official trend blog of Competitive Futures, a management consultancy that provides trend research and analysis for business and government around the world. Here, we update you on interesting trends we see as part of our work for our clients.
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