Change is a business survival tactic. Companies can resuscitate their balance sheets by switching gears, moving in a new direction and entering an all new industry. Sometimes bankruptcy prompts the need to adapt; other times, a visionary leader drives the pursuit of profit-potential opportunities. Along the way, the new venture may bring with it a new name and silence critics.
Nokia, the Finnish cell phone manufacturer, sees a connection between its first industry—paper production—and the one in which it competes today: communication. Nokia tested other industrial waters such as rubber products, electricity generation and consumer electronics. It entered the telecommunications industry by launching the first international cellular network. In 1992, Nokia opted to focus on phones and telecommunications. By 2005, the former paper mill reached a major milestone: 1 billion phones sold.
The only remnant of RadioShack’s unusual beginning would lie among its selection of cell phone covers, and then, only those made of leather. Originally a leather supplier for shoe repair shops, the Hinckley-Tandy Leather Company became RadioShack when its founders added a ham radio mail-order operation to its leather business. Under Charles Tandy, who took over in 1947, RadioShack switched to an all electronics retail operation. It called itself Tandy Corporation for a few years, but permanently adopted the name RadioShack Corp. in 2000.
3 Hudson’s Bay Company
Not all industry switches are dramatic, and not every business encounters success when it switches. Canada’s Hudson’s Bay Company, owner of the Lord & Taylor store chain, began in fur trading and slid smoothly into retail before hitting a bumpy road with forays in real estate development and shipping.It sold all non-retail operations in the 1980s in order to focus on its core retail business. HBC has kept the same name its founders gave it in 1670.
Global marketing services giant WWP began as a UK wire basket manufacturer called Wire & Plastic Products Plc. Unlike our other Top 5 industry switchers, Wire & Plastic Products was bought purposely in 1985 to give advertising executive Martin Sorrell an acquisition platform into a then under-served communications services industry. Sorrell changed the company name to WPP in 1985 and began buying up firms, including U.S. advertising agencies J. Walter Thompson, Young & Rubicam and the Oglivy Group. In 2013, this holding company oversaw more than 340 companies operating in 110 countries.
1 Berkshire Hathaway
Two textile firms—Berkshire Fine Spinning Associates and Hathaway Manufacturing Company—merged in 1955 to create today’s Berkshire Hathaway, Inc. Diversification spawned by a weak textile market saw the company take over insurance, furniture and media firms as it evolved into a conglomerate in the 1980s under CEO Warren Buffet. Buffet and his team added more businesses the 1990s and early 2000s. With holdings in several industries, among them utilities, transportation, retail and financial services, Berkshire Hathaway belongs to a unique fraternity of companies whose stock price has soared above the $100,000 mark.