Seeing Debt as an Instrument of Strategy

In "More Debt or None?," Bruce Henderson expands on his 1968 Perspective "Strategic Use of Debt" with this powerful introduction: Use more debt than your competition or get out of the business. Any other policy is either self-limiting, no-win, or a bet that the competition will go bankrupt before they displace you.

His Perspective "Cash Traps" opens with an equally forceful challenge to management thinking: The majority of the products in most companies are cash traps. They will absorb more money forever than they will generate. This is true even though they may show a profit according to the books of account.

BCG Insights & Highlights

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World News

  • The United States returns Okinawa to Japan
  • The arrest of five men inside the Democratic National Headquarters in Washington sets in motion what becomes known as the Watergate scandal
  • Palestinian terrorists kill 11 Israeli athletes at the Summer Olympic Games in Munich
  • The Federal Republic of Germany and the German Democratic Republic sign the Grundlagenvertrag treaty normalizing their relationship
  • A 47-day coal strike cripples Great Britain
  • The word processor is invented
  • The first video game comes on the market
  • Ireland, Great Britain, and Denmark vote to accept full membership in the European Common Market
  • Australia's Labour Party unseats the National Party, ending 12 years of National Party rule
  • A U.S. petroleum products shortage first becomes apparent