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Dare to Be Different

Growth may seem to come easily to the “usual suspects” — companies like Apple, Google, and Procter & Gamble, for example. Less well known are the growth strategies of companies like Rolls Royce and DeWalt. You might not expect these old-line companies to be home to remarkable growth strategies, but by looking beyond the status quo these businesses have discovered ways to boost returns.

Growth may seem to come easily to the “usual suspects” — companies like Apple, Google, and Procter & Gamble, for example. Less well known are the growth strategies of companies like Rolls Royce and DeWalt. You might not expect these old-line companies to be home to remarkable growth strategies, but by looking beyond the status quo these businesses have discovered ways to boost returns.

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And they’ve done it at a time when too many marketers seem to be in a state of arrested development in terms of growth. As Mike Shinall, CEO of Meridian Consulting Group, recently wrote in the HUB magazine: “Despite more ads, new products, aggressive pricing, and other efforts that have traditionally brought results, many brand-marketing organizations are struggling.”

Mike’s comments prefaced an analysis of a study Meridian conducted in partnership with the GMDC Educational Foundation, a retail trade group. Perhaps not surprisingly, overwhelming numbers of the study’s respondents said that an “understanding of consumers” is the key business insight required to drive growth. An “understanding of business reinvention” also scored high.

Mike goes on to set forth a sophisticated roadmap to reinvention that involves a tight integration of strategy, process, organizational structure, and of course, execution.

But Mike’s overarching point is this: Because companies tend to focus on the familiar and the near term, ‘business myopia’ is the key factor impeding extensive reinvention. “To make progress, brand marketers must be prepared to understand business models broader than the immediate industry and competitive frame of reference.”

In other words, look for growth in places you might not normally consider. Examples of companies choosing to look for growth in new and different places actually are plentiful once you start to search for them. Each of the following growth stories — all of which I discovered during my daily search for marketing insights to write about in my newsletter, Cool News of the Day — offer different and compelling insights into how to create growth where stagnation might otherwise prevail.

Rolls Royce. We’re not talking about Rolls Royce motorcars but rather the aircraft engine business — Rolls Royce Group — which has been run by the British government since the 1970s. It’s actually only relatively recently, under the leadership of CEO John Rose, that Rolls Royce has grown from just about a dead stop to become the second largest manufacturer of aircraft engines, behind General Electric.

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Rolls got there in part by creating what BusinessWeek called “one of the world’s most sophisticated help desks,” which “continuously monitors the health of some 3,000 engines for 45 airline customers.” In addition, because its service guarantee is so comprehensive, Rolls is now more focused than ever on making sure the engines don’t fail in the first place.

As a result, Rolls Royce has won 86% of orders for the Boeing 787 and has split Airbus A380 orders with GE. According to analyst Sandy Morris of ABN Amro, Rolls Royce Group is poised to enjoy a 65% year-on-year increase in operating profits in 2005 and investors have bid up the stock 46% since the beginning of last year.

DeWalt. According to an article in Fortune magazine, DeWalt, the power tools marketer, has grown to become “one of Black & Decker’s most profitable divisions.” That’s quite something for a brand that was pretty much dead — until the marketing team at DeWalt uncovered that the brand still had plenty of juice left among professional builders.

The growth driver for DeWalt actually was a very specific consumer insight. Dan Gregory, DeWalt’s VP of marketing comments: “The contractor doesn’t want a tool that has the same name as his wife’s toaster.” That kind of insight is critical because professionals account for 69% of all tool sales in the U.S. DeWalt played up its reputation as “more rugged and reliable” and parlayed its reinvigorated image into $1 billion in annual sales and a 35% share of the professional-tool market.

Mariuchi Bagels. Miho Inagi, a former computer programmer, is riding a bagel boom–in Japan. She’s doing it by adhering to a simple concept: authenticity. Where Miho’s competitors tailor their bagels to local tastes by serving them with sweet beans or other Japanese favorites, Mariuchi Bagels is winning by serving up real, authentic bagels — which she learned to make in New York City.

Inagi’s business is small and it is not making her rich (yet). But unlike other bagel mavens in Japan, her customers get in line and wait for them, up to 20 minutes at times. What Miho saw was that bagels are hot, and that there was an opening for the real deal.

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Crack Team USA. No discussion about unconventional approaches to growth would be complete without mentioning the incredible success of a St. Louis-based company whose business is basement repair. It’s hard to imagine a more mundane, commodity business than fixing cracks in concrete. Realizing this, the company’s president, Bob Kodner, got the idea that maybe a little comic relief would help sell his ostensibly dull product.

As reported by Gwendolyn Bounds in The Wall Street Journal, Bob “imagined a logo featuring a cartoonish, smiling gray piece of cement with feet and hands and a crack running down his head.” He had his cousin design the logo, which he dubbed “Mr. Happy Crack,” and proceeded to plaster it on 34 St. Louis buses. Suddenly, the phones started ringing with people wanting to know if they could get a T-Shirt or a hat with “Mr. Happy Crack” on it.

Today, Bob’s company has ten offices in eight states and is tracking to have 25 by the end of 2005 and projects 150 in North American by the end of 2007. He credits his logo with winning over potential franchisees, and his franchisees credit the logo with winning over customers. Revenues from the sales of T-shirts and other paraphernalia alone accounts for about 5 percent of the company’s revenues, which now totals $10 million.

The common denominator among all these companies is that they thought about, and then re-ignited, on what it is their consumers truly want. Just like the GMDC study said. They also share one more thing, which is so often overlooked but is inevitably the most important thing. That is, the courage to transcend what used to work and cut a new path. Just like Mike Shinall said.

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