According to the New York Times reported, “In an unusual strategic disposal, Wal-Mart Stores Inc. said that it would sell its McLane Company division to Berkshire Hathaway Inc. in a $1.45 billion deal that puts Berkshire Hathaway in position to become THE DOMINANT PLAYER in the food-distribution industry.” Warrant E. Buffett, the chairman and principal stakeholder in Berkshire Hathaway Inc, also the most famous investor around the world, was the decision maker of this acquisition.
McLane, which is already the largest distributor to corner stores in the country, had sales of $22 billion last year in cigarettes, tobacco, candy and other items delivered to Wal-Mart and Sam's Club stores as well as to 7-Eleven, Exxon Mobil convenience stores and fast food restaurants like Kentucky Fried Chicken.
People who read Buffett’s books know that he quite likes “simple businesses.” "He likes companies that make things that people are going to continue to need," Mr. Hagstrom, the author of several books on Mr. Buffett said. "They are going to continue to need groceries."
This news refers to an important business-operating concept--- simple. Mr. Buffett chose to involve in an “everybody-related business”--- grocery delivery industry. What he considered was “what people need everyday.” For Wal-Mart, king of retail, the world’s biggest channel of “almost-everything in life,” this deal shows a desire of concentrating on the company's food and general-merchandise operations--- also eager for simple. I think there are two strengths of simple that benefit for business operation--- focus and efficiency. The bigger the company is, the more important they need to emphasize that. The “focus-on” strategy can help build long-term competitive strength, as the resources can be used fully in something. And efficiency can avoid big enterprise becoming a business dinosaur.
“Simple for bigger, bigger for profitable.” I think it’s the 21st century’s business rule. Warren E. Buffett believes in that way, how about you?
(reference:
http://www.nytimes.com/2003/05/03/business/03SHOP.html?th)
