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Watching the wheel go round and round
Last week I received an invitation to the auction of the assets of a well known, London-based, large format printer that I've been dealing with for many years. Naturally, my thoughts go out to the staff and suppliers who often pay a disproportionately high price when a business slips into administration.
This news also highlights some interesting issues. Regardless of industry sector, in a rising market I'm often presented with the concept that big is best. With cash in their pockets, big businesses vacuum-up market share via the acquisition of smaller competitors and price wars. The idea is that economy of scale will sustain growth. The logical conclusion is that all the business will be managed by a handful of massive operators.
I could understand this argument if I hadn't been listening to the same record for 20-years. One problem is that large businesses can become hungry animals in a declining market. They reduce their costs and raise cash by shedding staff and assets, only to discover these same ex-employees returning as new competitors.
I guess the auction will liberate sufficient equipment to fuel some new printing businesses. Like any new enterprise, they will be fired with an enthusiasm to innovate and add value, all to the benefit of future customers.
On this line, as a proud owner of a TVR, I was naturally sad to see the original manufacturer close. However, the company's demise has spawned a fantastic community of small businesses supplying components and services. As for the TVR brand, new designs are already on the drawing board.
So the free market rotates and long may it do so.
Jon Barrett
Editor
