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Combining the neo-classical model of imperfect competition approximating to

the markets in which the three rms competed with the resource-oriented and

agency concepts of Edith Penrose, this essay describes, analyses and compares

the evolution of the product development policies of three leading British

consumer goods companies between the world wars !istorical proles of the

si"e, structural, and organisational features, and of the managerial resources

within each rm are compared, as is the process by which searches were

instituted through committees charged with the task of product diversication

and development #n assessment of the progress, outcomes, and relative

success of such policies reveals the contingent nature of the process $he

conclusion that serendipity as well as rational purposive strategy contributed to

the patterns of product diversication o%ers a novel interpretation of one vital

but neglected dimension of the B&'()E'' P*+CE''

+verview Point

ain argument 'erendipity as well as rational purposive strategy contributed to

the patterns of product diversication o%ers a novel interpretation of one vital

but neglected dimension of the business process

$he starting point product diversication and its continuing

theoritical under-development

.iversication means how best to dene a market or industry

conceptually

Present theory said anything can happen because of product

diversication /imited progress is being made to dene what may

happen in markets and rm 'utton he acknowledge the importance of historical dimension in

product diversication

Cynthia ontgomery complexity of the process more empirical

work to evaluate purposive diversication in the context of resource

base and agency

Edith Penrose : the importance of inherited resources and

managerial capabilities and strategies. The absence of

empirical research that might add esh to her bundle of

concepts by which she sought to map alternative

possibilities from perspectives within individual rmsconduction business within specic product markets.

$he approach of the research combine the theoritical framework

o%ered by the model of imperfect competition, with resource-

oriented concepts

Produce similar goods technology reach maturity imperfectly

competitive market generali"ed approximation

Product diversication and new product development imperative for

corporate survival success

arket infancy information is not perfect increase risk

increase uncertainty

challenge on business routine and andcustome behavior

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'pecic analysis dene the nature of adaptive process the

outcome of purposive rational action and evolutionary logicor at

least to serendipity

$rading in consumer goods market become competitive since 01th

century

Each rm need to become a corporate predator to achieve and

maintain market dominance

#fter post-war boom increasing international competition

intensied the e%ects of stagnating or declining product markets for

which other factors peculiar to the companies2 product mixes were

responsible

3irst mover strategy defence of market shares4prot

#dvertising and promoting tended to be employed to support rather

than initiate diversication

$he ma5or strategies the ac6uisition of other rms2 proprietary

technologies or of their products which were close substitutes forthose manufactured by the predator, or investment in new product

development

*esource and agency oriented concepts are applied to analy"e the

directions nd managerial dynamics of the process of product

diversication

$he connection between resources and agency in the process and

considers how far the pattern of diversication can be interpreted

as the outcome of purposive strategies and the re7ection of

di%erences and developments in corporate structures and

organi"ation $wo factors of diversication inherited resources, the capacities

and skills of existing managerial personnel

.iversication also in7uenced by area of speciali"ation developed

by an organi"ation *esearch is rational but there is speculative

character act of faith

8# reducing competition or establishing monopolistic dominance

Early 01th century trade in the saame product classes product

lines with rewuired limited chnges in resources

/imits to diversication based on the capacities and skills of

owners and managers 'cience contributed more to control and modication than to the

development of entirely new products

$o search for new product customer survey

Perception of the mature market s the based of research of the new

products, and doing product development $hey look at the market

too reduce risk in launching new product $his is happen also

because unintended ac6uisition of extended product ranges as the

pressures to diversify intensied were internally developed *ational

urposive strtegy and serendipity are necessary to explain the

contingent directions that diversication took

&nilever !istory

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$he formation of &nilever in 0191 marked the emergence of the rst and

largest -3orm corporate structure in Britain

/ever wholly owned and controlled by the founder

$he organi"ation was reform due a nancial crisis resulted in the

intervention of the company2s bankers and auditing accountants

$he sheer si"e and geographical dispersion of the /ever business empire

o%ered greater scope for the emergence of senior managers from outside

the /ever family

.uring the 01:;s the structure and management of &nilever has been

described as a professional, largely non-family-managed hierarchy

0191 /ever and European argarine &nion form &nilever, and they

comprising

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vertical integration and thus established a sound foundation for our

understanding of the modern rm

*#$*( (# P*#$(>(4'9?:==9

Purposive Strategy or Serendipity? Developmentand Diversifcation in Three Consumer Product

Companies

(n this Purposive 'trategy or 'erendipityD .evelopment and .iversication in

$hree Consumer Product Companies article, * Church and C Clark stated that

serendipity and rational purposive strategy contributed to the patterns of

product diversication $he starting idea of this article is about the product

diversication and the theory that is related about it &sing Edith Penrose2s

concept as the basis of the research and trying to combine the theoretical

framework from imperfect competition, this article compares three consumer

product companies which are 8 Colman, *eckitt 8 'ons, and &nilever (n thisparticular case, our focus is on &nilever and how they form themselves to

become the largest -3orm company in Britain

$he meaning of the purposive strategy itself actually is all forms of change that

is done for a purpose and referred to planned change +n the other hand, the

concept of Edith Penrose basically is about the importance of internal resources

and managerial capabilities and strategies $his is also similar to Chandler2s

perspective that those aspects will enable him to deal with hori"ontal and

vertical integration and establish a foundation to understand the modern rm

$he theoretical framework of imperfect competition explained about the e%ect of

when rm produce similar goods and the production technology maturity to

imperfect competitive market that resulted in generali"ation #lso, based on

Business !istory Complexity and Comparison book by 3#matori and #Colli, they

explain about how -3orm company is established because of &-3orm cannot

handle the diversication caused by the internal growth and mergers in rms

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/ooking back to the history of &nilever, it is true that their transformation is not

only serendipity, but there is also a purposive strategy $his purposive strategy

showed by the merger and ac6uistion that &nilever did /ord /everhulme did a

lot of ac6uisition to achieve product diversication and it is called as economic

madness $his is done since /ord /everhulme has perspective that research for a

new product development is wasting capital resources +ne of the example is the

ac6uisition of acsheries to handle islands2 sheries product, and >all2s that is

speciali"ed in ice cream >hen product diversication increases, the

management of the rms will also need to ad5ust &nilever2s management was

reformed and becoming a professional, largely non-family-managed hierarchy

#fter they merge with European argarine &nion, they also do the reorgani"ation

and rationali"ation (n 01:;, &nilever divided their product into three categories,

which are soap, margarine, and oil +n the other hand their other products are

being take care by the company that they ac6uired (n order to avoid competition

between the ac6uired company, &nilever maintain their marketing strategies

#fter those kind of process, &nilever nally transform themselves into -3orm or

multidivisional company

$o summari"e, &nilever has purposive strategy in ac6uiring another companies

to achieve product diversication >hen product diversication increases, themanagement also needs to adapt $herefore the company is based on

management and division, and that is the moment when &nilever transformed to

-3orm company +nce again, we can imply that serendipity and purposive

strategy are contributed to product diversication >hich for &nilever case it is

more towards the purposive strategy one

*eferences

#matori, 3, 8 Colli, # F9;00G +rgani"ational Change (n /arge #merican 3irms 3rom $he &-3orm $o $he -3orm .alam Business History : Complexities

and ComparisonsFhal 0;0-0;:G /ondon *outledge

uller, , Be"uidenhout, , 8 ooste, F9;;G Classication +f a5or Change

Paradigms4odel .alam Health Care Service ManagementFhal 09;-090G

Cape $own Paarl Print