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Nike Is Proud Of Its Capital: Formulating Its Formula Repeatedly.

2011/5/24 11:28:00 70

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In May 24th, in order to gain an in-depth understanding of how enterprises can maintain profitable growth, the author conducted a 5 year enterprise growth study involving 1850 companies. Two main conclusions were drawn: first, most of the sustained profitable growth was achieved in enterprises breaking through the core business boundaries and expanding to the adjacent areas; second, when the new expansion was carried out, the success rate of the ordinary enterprises was only 25%, while those of the replicable enterprises were doubled, and some even reached 80% or higher.

Nike

The reason why companies can be proud of their heroes is that they have formulated a successful formula that can be applied repeatedly.

The formula is as follows: first, Nike is aiming at

market

Establish the leading position of sports shoes.

Next, Nike launched the clothing series endorsed by top athletes in the market.

Then, Nike began to launch more profitable sports equipment in the target market.

In the last step, Nike stepped out of the US market and distributed globally.

In the past 10 years, with the same expansion mode, Nike has entered one after another sporting goods market and has taken the lead of sporting goods market leader from Reebok (Reebok).

By contrast, Reebok is seeking different ways of growth every year, and the result is fluctuating.

You have to be very careful if you want to expand successfully.

"When selecting new neighboring markets, the most important thing is to limit the new variables that need to be managed to at least one," a company executive described his principles.

Olam's case also illustrates the importance of strict selection of projects before expansion measures are taken.

Olam is a Nigeria company. When it first started, it only sold one product in one country. However, in a short span of 13 years, it developed into a multinational company with a revenue of 1 billion 900 million US dollars through a series of expansion to the neighboring market.

The company's CEO claims that the successful mode of expansion to nearby markets is "very clear about where the next $1 billion comes from."

How can the replication mode be so effective? This is because enterprise growth is usually a complex, experimental, and somewhat chaotic process. When applying a certain model for the first time, the process is usually just a preliminary guess and assumption, and reproducible can enable enterprises to repeat this process continuously, so that enterprises can improve themselves and improve efficiency from the actual experience.

The systematic growth of enterprises not only makes rational use of the learning curve effect, reduces complexity, but also enables investors and employees to make clear the development strategy of enterprises.

Then, how to make a replicable expansion model? The study found that nearly 80% of the successful formula for the expansion of neighboring markets is based on the insight into customer behavior.

enterprise

The more you know about customer preferences and their economic background, the more undiscovered business opportunities will be.

From the case of DELL, American Express and Italy semiconductor, we can sum up three ways to explore business opportunities: first, to segment customers; second, to increase the share of purses, that is, to sell products to familiar customers; and third, to track the expansion plans of customers and predict the needs of customers to excavate business opportunities.

The experience of successful enterprises illustrates two main principles of replicable mode: first, the expansion to the neighboring areas, only the strong core business is possible.

Second, the best way to find opportunities for expansion in neighboring areas is to start with heavyweight customers.

In other words, the trick to expanding success should be to understand the behavior of customers and to follow familiar ways to develop new businesses.