I enjoy studying the mega-cap companies like ExxonMobil, Johnson & Johnson, and Nestle that have delivered excellent results for shareholders over a multi-decade stretch. Unlike many other companies that are constantly flipping brands, taking on debt here, laying off employees and slashing jobs there, these businesses actually undertake the task of making a business work.
I’m not saying they’ve never done any of the above-mentioned activities, but rather, if you look at a business line like Tylenol under the Johnson & Johnson umbrella, the company had to answer what I call the “then what?” question. Say you load up the company with debt, lay off workers, and engage in other cost-cutting measures, what do you do then to grow the business? The answer is (1) make sure the product is in the best shape it can be delivered in; (2) arrange for its distribution accordingly; and (3) market the product … Read the rest of this article!