Coffee, Energy & Waste: 3 Growth Strategies
We're back from PIMA and happy to share another Growth Strategy Analysis post this week. Brexit and the US trade war with China are constantly in the headlines, so it is only fitting that this week's featured stories take us to the UK and China. We'll look at three different growth strategies in three very different industries. While different, once again, growth through acquisition still seems to be one of the most viable strategies in play this month. But, we'll also look a fascinating and opportunistic variation on an acquisition -- the business takeover.
Let's start in China but with an iconic American company, Starbucks. Under the strategic guidance from Starbucks China CEO Belinda Wong, Starbucks served up double revenue growth and opened 560 new cafes in 2018 according to a report by WARC. Yes, that's right, 560 new cafes. This strategic play is straight up, old fashioned growth by expansion. If there's demand and you've got the capital, why not?
Our second growth story takes us over to the UK in the waste management industry. Last week, Resource Magazine reported that Reconomy acquired the compliance and environmental consulting firm, Valpak. So, its growth by acquisition but is an interesting play in that this move also expands Reconomy's suite of services. From our standpoint, this doesn't necessarily signal consolidation in the market. It's not entirely clear if Valpak will continue to operate under its own brand. If you're exploring growth by acquisition for your business, will you acquire a business with duplicate services and merge their operations into yours to create some economy of scale? Or, is the acquisition meant to expand your customer base by cross selling complimentary products and services?
Finally, we'll stay in the UK but pivot over to the consolidating energy industry 8 energy companies shorted out in 2018 leaving millions of customers up for grabs. In a big move, OVO has taken over the customer accounts and taken 4.9% share of the market. See Adama Vaughan’s article in The Guardian. The business takeover is a shrewd and opportunistic strategic play, Sure, it may put a strain on your capacity to on board and serve a large number of new customers in a short period of time. However, if played successfully, you not only grow but edge out your competitors.
Hope you found some inspiration from these growth strategies. Check back next week for more.