Wednesday, December 5, 2012

Winning beyond Endurance, PPG to IBM

While IBM may have turned 100 last year[1], PPG is now 129.

Originally known as Pittsburgh Plate Glass Co and established in 1883, it changed its name to PPG Industries in the 1960s[2]. While they started in glass, in the 1990s they began to divest themselves of those holdings and focus primarily on coatings and paint through acquisitions  When the shift started 50% of their holdings were in coatings and in it is now closer to 75%. After their planned merger with Georgia Gulf Corp, coatings will be 90% of their portfolio. Glass consists of only 7% and they are looking to divest it fully in the future.

IBM managed to weather the 90s by also moving past their success in mainframe manufacturing. They built on their past and focused more on the how rather than the what. They focused on their core values.[1]

PPG has a similar story. "Patience has underscored the entire strategic transition. Bunch said the company only divests businesses at a time when such a move will result in a fair price for shareholders. At the same time, the company strives to make acquisitions that fit within PPGs financial metrics." Charles Bunch, the CEO and president of PPG Industries is described as a disciplined and pragmatic leader not afraid to make a slow and deliberate move to a more consistent business model.[3]

By focusing on the shareholder and their values, PPG is comfortable looking in the mirror to see a future that might not involve its past in glass.

[1] Lohr, Steve. "Lessons in Longevity, From I.B.M." The New York Times. Jun 18 2011.
[2]"Company History" PPG Industries. Web. Dec 5 2012
[3] Spencer, Malia. "PPG Evolution Part of Long Range Plan." Pittsburgh Business Times. Nov 9-15, 2012.  web. Dec 5. 2012.

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