PDSnet Glossary

Term

Categories

Introductory Technical Fundamental Economics Opinion Sectors International Regulatory Other Markets

Versions

Name	synonyms = 1, variations = 2, abbreviations = 3

Publish: (0 = no, 1 = yes)

Definition

The degree to which a company can concentrate it's energy on its core business. Philip Kotler, the world-renowned management consultant said that the most important question a business can ask itself is, "What business are we in?". The answer to this question will inform every strategic decision taken by the board and senior management. On the JSE you will often come across companies that are selling or shutting down parts of their business which they no longer consider to be "core". Those companies which lack focus inevitably perform badly over time. Perhaps the best current example is Edcon's subsidiary CNA which had no synergies with its parent beyond the fact that were both in retail. Divisions or subsidiaries which are not part of a company's core business distract management's attention away from the core businesses.

Edit Glossary Term