This growth impressed the capital markets, and few asked fundamental questions
about the company’s business strategy. Could Enron’s expertise in owning
and managing energy assets, and then developing a trading model to help buyers
and sellers of energy manage risks, be extended to such a broad array of new
businesses? Moreover, was Enron’s performance sustainable given the limited
barriers to entry by other firms that wished to mimic its success? To have a sense of
how Enron’s business model evolved, it is useful to consider in more detail how its
operations expanded.