Root cause of Bloomberg

“Bloomberg by Bloomberg” is an autobiography of a visionary leader Michael R. Bloomberg who is a Businessman, Politician and Philanthropist. Dismissed from Salomon Brothers in 1981 as a general partner, Mike immediately took his money and started Bloomberg L.P.

In the era of globalization, almost all the MNCs are following the grand strategy “Mergers and Acquisitions” to compete heavily in the competitive environment and taking this as a strand to go globally. But, Mike believes in organic growth rather than inorganic growth. His operating principle has always been “build, don’t buy”. The reason why he shows interest in green field project is that “If companies go in for M&A, probably they will take over a weak organization which might have strategically failed somewhere. It would take enough time to identify the problem and solve it. It’s a waste of time and money.”

So he avoided going for M&A and followed Porter’s generic strategies like differentiation and focus strategies. As I believe, the life blood of his organization is innovation. He has come up with different services like Bloomberg L.P., Bloomberg Magazine, Bloomberg Business News, Bloomberg Information Television, and Bloomberg Terminal only through his constant innovation and differentiated his services from his competitors.

The core idea of his organization is to deliver information to their target customers through as many mediums (Magazines, Newspapers, Internet, Television, and Radio) as possible and focused on even smaller group of target audiences who are not served by his competitors. The development of his service through a very old medium “Radio” depicts his focus strategy. All these great peaks were attainable only through the adoption of organic growth method. Culture of the organization will also predict its success. He could be able to maintain only if he built his new ventures rather than buying it.

Because of avoiding inorganic growth, it took time for his entry into some countries where governmental and industrial regulations disallow foreigners to serve their local customers with information. They didn’t even take the partners to enter in such countries and took pains to satisfy the officials and finally entered there. One such country is Japan where he took nearly two years to start his venture. I think, Bloomberg has gone in for concentric diversification and didn’t make use of other opportunities that are prevailing in the market.

I feel that one reason why he was not able to be a conglomerate is may be because of his avoidance of buying. Building all the ventures is not possible when organizations don’t go in for partnership or M&As and their growth potential is found to be riskier.