Notes on Business Growth Strategy

These notes are purposefully vague, as I can’t share the full content publicly. But perhaps you too will find them a helpful reference….

A brand starts when the invention of new product or service finds a customer audience. But after establishing a basic, small audience base, how does the company grow? There have been two key ways developed in the 20th Century to build a brand and grow a business:

1) Horizontal integration.
If you begin in one category (eg: beverages), you start to build out as many products in that category to the point that you dominate that category.
Example:  COKE. Adding more and more brands to the product portfolio.

* Problem with this process: proliferation brings problems with consumer choice/competition.
* Commoditization — consumers don’t see there’s any one great difference between any brand.
* Globalization — bringing a product to a new area keeps the engine going.

A) Line Extensions.
Another Old Formula for Growth — For Coke this meant create new flavors and formulations of products, and using mass media to drive growth.

2) Vertical Integration.
Own as many parts of the supply chain as possible.
Examples — Oil Industry. They extract, refine, ship, and retail/sell.

New Model For Growth — Ecosystem Of Value
Functional Integration.
Single product, leads to second product or service, third, forth… a 360 degree of products and services.
* Example — Apple, Inc. — Macintosh computers, iTunes software, iPod players, Music Store… and now iPhone/iPad … a variety of products and services that connect together to create more value for the consumers.
* Other Examples — Google, Amazon, BMW (they now over digital service to create an ecosystem of value)

In the era of networked media, you’re either going to be integrated, or become a commodity.
*** Most successful brands in the future are going to be defined by their mission, not a single product. ***