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#Written by David Tam, 1996. #
#davidkftam@netscape.net Copyright 1999#
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David Tam
Tuesday, September 24, 1996.
Business Press Review
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Church, Elizabeth. "Family funeral home won't sell out". The Globe and Mail.
Friday, September 20, 1996. B6. ------------------
Corporate buy-outs are happening everywhere, even in the funeral home
industry. This article is about a family run funeral home business, Paul
O'Connor Funeral Home Ltd, that refuses to sell out to the larger corporations
even though it could potentially be worth $12 million. Traditionally, most
businesses in this industry were family owned. The concepts of mass marketing,
volume buying, consolidation, and chain ownership are being applied in full
force. In 1976, under 2% of the industry was held by large multinational
corporations. Now, that share has grown to over 20%. The most recent
corporate buy-out attempt occurred last week when North America's largest
funeral chain, Service Corp International, offered $2.5 billion US for its
rival, Loewen Group Inc. of B.C.
The O'Connors have been approached six times to sell out to large
corporations but have refused. Sadly though, their family owned business is
one of the last few of its kind. The corporate presence in this industry is
likely to increase, though independent funeral homes will probably have a niche
in the market. As Mr. O'Connor puts it, "People know that we're a family
business, a lot of people like that." Sincerity is a quality that is high in
the priority list when people must make such decisions. Mr. O'Connor has
always considered his work as a sacred profession, which is one of the main
reasons he refuses to be bought out.
As the industry changes, so do consumer habits and demands. Customers as
much more demanding and they are likely to do comparison shopping. Some even
haggle over prices. Mr. O'Connor is not worried about the big chains
undercutting is prices. Greater buying power usually allows for this to occur.
However, he will be concerned if these chains decide to buy out the suppliers
as well as the cemeteries. If this occurs, his business will be indirectly
controlled by the big chains. They may force him out of business. U.S.
anti-competition laws may prevent this from occurring.
For those families who are struggling in this industry, I believe they will
see this as a lucrative way out. To others like the O'Connors, who have
different priorities in life, they may see the situation as a threat or an
opportunity. Opportunity is present because these family owned businesses can
succeed where the large corporations fail, in the areas of sincerity and
service. It is sad to see businesses making a lot of profit from other
people's misfortunes. It seems as if the ideas of capitalism, profit, greed
can be applied to everything at all costs.
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