Jam today, no jam tomorrow?

Strategic thinkers say there are only two roads if you want to grow, the O or the A road. O stands for organic growth, where you compete to win additional business from existing customers, or you compete to attract new customers. A new branch that builds sales from scratch by competing with established suppliers counts as organic growth. New products offered to existing customers or, more risky, new products offered to new customers, it all counts as organic. A stands for acquisition, where you buy someone else's business and bolt their growth on to yours.

Growing organically is like trench warfare. It's hard. You fight face-to-face with your rivals for every customer and every inch of territory. Most find it difficult to grow faster than the market for any length of time.

Neither is easy, although acquisition is often portrayed as quicker and easier, a more certain way of leapfrogging your rivals. Doing either well requires considerable, but different, skills.

It takes skill to acquire and integrate companies without loss, and gain the benefits of scale. To do so, time after time, demands enormous focus from the organisation. In companies that take the A road that's what senior management do, it's what they spend their time and thoughts on.

In the race to build critical mass, and be number one, some major builders' merchant chains have grown largely by acquisition. It has paid off to date, but it is an inward looking focus. There are fewer companies left to buy, and while they have been competing with each other to mop up the independents, others have been honing their organic growth skills to perfection. Unless they start to acquire each other - hard to justify given the cost and redundancy in their networks - large builders' merchants will run out of road.

And they will find it hard to switch to the O road. It requires a different set of skills, not often found in the same individuals or the same teams. The mindset is different.

The DIY sheds, now in the BMF, and a growing number of specialists who do have those skills are hungry for their core trade business. Do those builders' merchant chains have it in them to learn new skills and compete effectively? Jam yesterday, and jam today, but will there be jam tomorrow?

Do you agree? Disagree? Want more information? Email Mike Rigby at mike@521621.com