Most companies are founded with one or two employees. If they offer a good product or service at a competitive price, they expand, and grow their client numbers. As a result of more clients, businesses invest more money in hiring, training and developing new employees, and small businesses become medium sized enterprises of 50 – 500 people.

If the product or service has wide reach and customers, a small minority of firms have the option of growing beyond this medium-size to become large corporations. But once businesses become large corporations, their ability to grow naturally by selling more of the same product or service becomes limited. This natural growth is known as “organic growth”. Where organic growth stalls, shareholders, and options trading companies look to management to provide new avenues of growth. One of the major ways companies can accomplish this is through acquiring other companies and adding their products and services to their own.

Avago Technologies Ltd (NASDAQ:AVGO) has recently taken exactly this approach. Early indications are that the market likes the move, which has seen the stock price rise from below $70 late last year to recent highs above $140. So can Avago’s share price continue its upward march?

Understanding the Business

Avago Technologies is in the business of supplying the world with optoelectrics components to integrate into electronic devices. These components are often also known as semiconductors, and have the ability to transport information, light and data within devices and from one device to another. It helps to think of AVGO as the company that provides the raw material that helps built the “roads” that digital information travels on.

Avago began life as a spin off from its parent company, Hewlett Packard at the height of the dot com boom in 1999. The company’s largest transformative acquisition to date was the $6 billion plus purchase of LSI Corporation, which helped broaden the appeal of the company to other businesses that needed mass market solutions for their own devices.

Avago now earns the majority of its earnings from storage chips and interconnecting technology. A prime example of the kind of customer that has needs for large amounts of high quality material like this is the data centre industry, which is

growing exponentially as we create more and more data that needs to be securely stored.

A stampede of new mobile systems is thundering on the horizon. Two words of advice for system makers who want to survive it — think different. Apple Inc.'s old motto may be grammatically incorrect but it is strategically right on target for this era of innovation by imitation. The good news is there is no shortage of novel technologies and ideas to leverage a company out of the parade of me-too lemmings

Motherboard components such as MLCCs, solid capacitors and LAN connectors are reportedly suffering from tight supply due to the recent labor shortages, according to sources from motherboard makers.

First-tier motherboard makers Asustek Computer, Gigabyte Technology, Micro-Star International (MSI) and Elitegroup Computer Systems (ECS) are all aggressively placing orders to avoid the shortages causing any impact on their motherboard shipments.