Drug stores are not the same the world over. Here in the good old U.S. of A. we have drug stores and we have pharmacies. I use the typical American drug store as an example of how technology companies differ from the average manufacturing company.
A drug store sells pharmaceuticals, right? Not so fast. Walk into any major drug store in the U.S. and you’ll have to keep walking to find the pharmacy. Usually it’s in the back and far removed from what the drug store really sells.
Based on the number of neighborhood drug stores an alien who just arrived on earthy might think that earthlings are a sickly species. In the U.S. Walgreens and CVS compete neck and neck with a similar number of stores, but the former has more pharmacists than the latter so maybe it’s more serious about health (or pushing drugs).
How are major drug stores like Apple, Google, Microsoft, Samsung, and Amazon?
Like a drug store, those technology behemoths sell a little of everything and, like drug stores in general, are moving further away from their core businesses.
Apple Computer was once synonymous with the Mac, but thanks to iPhone, iPad, and various Services that sell apps, music, movies, and TV shows, the company is more like a drug store. You can still find the Mac, but there’s a lot more of everything else being sold these days.
Google is no different except it hasn’t figured out how to make money by selling anything but it’s advertising drugs. Google has a self driving car, sells music, movies, and TV shows, dabbles in smartphones and tablets, but is more of a discount drug store than Apple.
Microsoft? The company made its fortune on MS-DOS, then the DOS replacement, Windows, and coupled closely to that is the enormous Office business, and like Google, Microsoft struggles to diversify its revenue and profit streams, but thanks to hardware and cloud services, has moved far from the Windows operating system and Office suite as core revenue.
Samsung? To be fair, Samsung is more like Walmart than a typical Walgreens or CVS drug store. Walmart’s have a pharmacy, too, but sell a gazillion other cheaply made products. Just like Samsung.
The best example of the drug store phenomenon is Amazon, which is little more than an online retailer that struggles to make a profit, while re-investing what little it makes to work on its CEO’s dream for the company to become a true technology company (Amazon Fire tablets, Kindle tablets, Amazon Echo and Alexa).
Why do all these companies venture so far beyond their core businesses (pharmacy) to become drug store-like mini-conglomerates?
It would be as if General Motors or Toyota decided to build houses because houses have garages and garages need cars. Or, as if McDonald’s decided to get into the health care business because a steady diet of McDonald’s food causes health problems and those whose health is deteriorating need home health care.
Greed? Or, perhaps a lack of imagination about what their riches can build vs. buy? Whatever it is, these technology companies are little more than digital gadget drug stores.