Asian Business Diversification

Sam Parr and Shaan Puri discuss how Asian businesses, particularly Chinese and Japanese companies, have a distinct approach to business diversification that differs from Western companies. They highlight how these companies rapidly expand into seemingly unrelated sectors, creating vast conglomerates.

• Asian Business Diversification Strategy:

  • Chinese companies from the 90s and 2000s are notably aggressive about rapid diversification
  • Can go from one core business to owning completely unrelated ventures like apartment buildings in just a few years
  • Japanese companies follow a similar model (referred to by a term starting with "Kazu")

• Notable Examples:

  • Yamaha demonstrates this philosophy by producing:
    • Motorcycles
    • Pianos
    • Chainsaws
    • Power tools
  • SoftBank is mentioned as another example of this approach

• Key Characteristics:

  • Much faster diversification compared to Western companies
  • Willing to enter completely unrelated industries
  • Common practice among Asian conglomerates

• Historical Context:

  • Shaan suggests this isn't necessarily less common now, but operates on a 50-100 year timeline
  • Sam argues Chinese companies specifically do this more rapidly, even in recent decades

• Business Philosophy:

  • Represents a different mindset about business growth
  • Shows willingness to expand beyond core competencies
  • Demonstrates high risk tolerance and adaptability

This approach contrasts with Western businesses that typically stay more focused on related industries or take longer to diversify.