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Comment by toast0 | Hacker News Reader

> American firms, for example, tend to prioritize focus above all else: it would be bizarre for an American paper mill to also operate a concert hall and an airport catering business

I don't think Kimberly-Clark ever opetated a concert hall, but they did run an airline (Midwest Express) and K-C Aviation was an airplane servicing firm.

It's not that American companies don't operate in diverse businesses. Maybe they're less likely to, but it happens when the need arises... if there's no reasonable supplier for an important input, then you start one, or you ask an existing supplier if they can start a new line of business that's somewhat related.

The headline example is that Toto, known as a maker of ceramic toliets, is making a lot of money making specialty ceramics used in semiconductor manufacturing. Which yeah, ceramic manufacturer makes ceramics.

The US business market does like to spin-off divisions when they are successful and can be independent.

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Yeah, we actually had our own era of “conglomerates” - they were very big from the 1960s through 1980s. Companies like ITT, Cendant, Gulf+Western, GE — formed from tons of acquisitions, sprawling across completely unrelated industries.

At one point in the 1990s, you could buy a toaster from the same company that makes airplane engines, MRI machines, and produces “Saturday Night Live.” And you may have financed that toaster through their financial arm (GE Capital). Eventually the many lines of business were spun off from companies like this.

What came next was a very different type of consolidation - companies like Comcast, Chevron, and the current “AT&T” who went from being regional players to buying as many other companies just like themselves in order to maximize economies of scale - they’re huge but really just do one or two very closely-related things.

I am not an expert, but my impression is that the era of US conglomerates was more a product of the financial superstructure: Post-WW2, demographic, economic, and technological growth created many large opportunities for business ventures. But capital markets were much less sophisticated, much smaller than today.

Existing large businesses were the primary source of major investments in new businesses, or in remaking old businesses for a rapidly modernizing world.

A great example is the bowling lane people AMF, who have over the years made things like pinsetters, jet-skis, motorcycles, scuba gear, shovels, and nuclear reactors. All spun in and out of the company over its life

There have been conglomerate fads from time to time in American business. Interestingly ITT

https://en.wikipedia.org/wiki/ITT_Inc.

used to have a big position in hotels and just about everything else and it trained quality movement advocate Phil Crosby

https://en.wikipedia.org/wiki/Philip_B._Crosby

The article mentions that American toilet manufacturers do not make non-bathroom related ceramics.

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