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Last Update: Sunday June 25, 2017

Key Idea: Buy Your Competition

You might notice that as you get stronger some competitors get weaker.  The Calise brothers saw this happening and worked to buy out the competition.

Key Question:

A: 

One way to grow is to buy your competitor.

Q:  What did the Calise brothers buy?

A:  Brilliantly, the only bought customers.  They did not take on the overhead of the business they bought.

Q:  Why were they able to do this?

A:  They put  their ducks in a row and ended up with excess manufacturing capacity.  They had the process and the people in place to serve more customers while the competitor was stumbling.

The Souto family owns Cafe Pilon and they have acquired their competitors three times as of this writing. This strategy has made them the largest Cuban coffee roasters in the US.   They have in place technology, million dollar roasters and leadership to roast, package, deliver and serve the customers they won with the buy-outs. Just getting more customers will not guarantee that you will see long-term growth. If you are not able to do the work and make customers happy, they will find another source.

Think about it

Do you want to grow?  What steps do you need to take to position yourself to buy a competitor?  Do you have excess capacity now?  What company out there might be in trouble that you could take over or buy?

Clip from: Calise & Sons Bakery, Providence

Providence, Rhode Island:  Visit an old New England family business. With roots back to 1908,  the Calise & Sons Bakery has been through the good times and the bad.  The founder gave the reins to his four sons and they just about ran that business into the ground. Three grandchildren came to the rescue. They bought the business, and then went to work to retire the debt. They did it, then they built the business beyond anyone's wildest expectation.

Calise & Sons Bakery now serve most of New England, New York and Pennsylvania and increasingly they'll be serving the world. Big chains and grocery stores -- The Olive Garden, Shaws and Albertsons -- depend on them. But, you know, even with such success, it is just not easy. 

The Calise brothers make bread from the same recipes their grandfather brought from Italy.  Yet, it took them nearly 30 years to bring this company back from the brink. The brothers learned on the job. Though there are no MBAs here, their management practices are now case studies in major business textbooks.

The adoption of technology and the acquisition of competitors have fueled growth and prosperity. These owners quickly learned a key big business secret -- grow by acquiring your competition.

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Calise & Sons Bakery

Michael Calise, VP, Sales

Visit our web site: http://calisebakery.com

Business Classification:
Food - Bakery - Bread

Year Founded:

Buy Your Competition

HATTIE: (The Lightbulb in the Studio) Even though the Calises had to dig themselves out of a hole when they took over the company, at least they had a good product. People liked to eat their bread. By taking their mother's advice and working together, one for all and all for one, they have been unstoppable. They knew they had antiquated business practices which they had to fix first. And then, they invested in modern equipment and technology. At the same time, they invested in people. With a solid manufacturing operation, they decided their best strategy for growth was acquisition. How do you go about buying your competition? There are many ways. In this case, they did not want to buy plants, equipment, bricks and mortar. They only wanted to buy the customers, the delivery routes. If you have the system in place to produce more product, go buy your competition.

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