Re: "Perhaps they should look at getting their own strategy more forward thinking."
And having a solid MNA strategy is part of this effort.
Large companies may enter new markets through MNAs, which could originate from an earlier investment, reference sale, OEM deal, 3rd party project, or joint venture. Sometimes the seed stage activity is better suited for smaller startups which are more nimble because their creativity is not restricted by processes. Sometimes it doesn't make sense for a large company to initiate a new technology or new market until it becomes critical mass.
On the other hand, it's interesting to see how large companies (e.g. Barnes & Noble) need to spin a division off in order to accelerate their development (in order to remain competitive.) They'll have more cash (to accelerate RND) from an IPO than from existing profits (of which RND only gets a small %.)
In this market, for some low margin/income companies, it appears to be wiser to accelerate new development by spinning a division off, raising a large amount of capital through an IPO, in order to fuel extremely fast development, rather than leaving its new development restricted to the limits of some tiny % of profit. But if you're a big company with healthy margins and a lot of cash, why not let the startups do the work and absorb the risk, then sit back and buy out the winners.
Amy J |
