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Hacking The Case Interview

Hacking the Case Interview

Growth strategy case interviews

A growth strategy or revenue growth case interview is a common type of case you’ll see in your first round and final round consulting interviews. This type of case interview may look something like the following:

Your client, Coca-Cola, is looking for new opportunities to grow after years of flat growth. They have hired you to determine the best way to grow.

In this article, we’ll cover a comprehensive framework that you can use to structure the different ways a company can grow. We’ll also show you the five steps you should take to solve any growth strategy or revenue growth case.

If you’re looking for a step-by-step shortcut to learn case interviews quickly, enroll in our case interview course . These insider strategies from a former Bain interviewer helped 30,000+ land consulting offers while saving hundreds of hours of prep time.

Growth Strategy Case Interview Framework

You can think about growth through two major categories, organic growth and inorganic growth.

The most common type of growth that companies pursue is organic growth, which is growth driven by expanding output or engaging in internal activities. In other words, the company is growing through its own capabilities and efforts.

Inorganic growth, on the other hand, is growth driven by acquisitions, joint ventures, or partnerships.

These two categories form the foundation of our growth strategy case framework.

Growth Strategy and Revenue Growth Case Interview Framework

Organic growth

Organic growth can be segmented into growth through existing revenue sources and growth through new revenue sources.

Growth through existing revenue sources

Growth through existing revenue sources is either driven by an increase in quantity of units sold or by an increase in average price per unit sold. 

To increase the quantity of units sold, a company can:

  • Improve their product
  • Decrease prices
  • Sell through new distribution channels
  • Target new customer segments
  • Expand into new geographies
  • Invest more in marketing and sales

To increase the average price per unit sold, the company can:

  • Increase prices for their products
  • Focus on selling higher priced products

Remember that changing prices will impact quantity of units sold, so it is important to look at the net effect price changes have on revenue.

Growth through new revenue sources

To drive growth through new revenue sources, a company can:

  • Launch new products
  • Launch new services

Inorganic growth

Inorganic growth can be segmented into three categories:  

Acquisitions

  • Joint ventures
  • Partnerships

The first way that a company can grow inorganically is by acquiring another company. This gives the acquiring company all of the revenue that the acquisition target generates. In addition, there may be revenue synergies that the acquiring company can realize.

Acquiring a company gives the acquiring company access to the acquisition target’s distribution channels, customers, and products. The acquiring company may be able to increase revenues by cross-selling products, up-selling products, or bundling products together.

The advantages of making an acquisition are that the company increases its revenues immediately. They also have full control over how they want to manage and operate the acquired company. 

The main disadvantages are that acquisitions are expensive and there could be difficulties fully integrating the acquired company.  

Joint venture

In a joint venture, two or more companies enter a business arrangement in which they pool together resources and share risk in accomplishing a particular task. Each company in the joint venture is responsible for profits, losses, and costs associated with the project.

Joint ventures are beneficial to companies because they can share resources, expertise, and can decrease costs due to scale. Additionally, joint ventures are much cheaper than acquisitions. 

A disadvantage of a joint venture is that it will take time to generate revenue. Also, the company does not have full control over the operations of its partners.

Partnership

A partnership is an association between two or more companies that provides some kind of benefit to each partner. This is slightly different from a joint venture because in a partnership, companies do not necessarily have to combine resources or efforts. They just need to be associated with each other.

One advantage of a partnership is that it is most often cheaper than a joint venture since resources don’t necessarily need to be contributed. Also, all partners get the benefit from the brand names and customer access of their partners.

Similar to joint ventures, one disadvantage of a partnership is that it takes time to generate revenue. Also, companies do not have full control over their partners’ operations.

5 Steps to Solving a Growth Strategy Case Interview

Follow these five steps and you’ll be able to solve any growth strategy or revenue growth case that you get.

1. Understand what the company is trying to grow

The first step to solve any growth strategy case is to identify what the company is trying to grow. Are they trying to grow revenues, profits, number of customers, or something else? 

Growing revenues versus growing profits can lead to very different strategies. Understanding what the company is trying to grow will help you determine what growth strategies will be most effective.

Interviewer: Your client, Coca-Cola, is looking for new opportunities to grow after years of flat growth. They have hired you to determine the best way to grow.

You: Is Coca-Cola looking to grow revenues, profits, or something else?

Interviewer: They are looking to grow revenues.

2. Quantify the specific target or goal

Next, you want to quantify the goal or target that the company is aiming for. For example, if the company wants to grow revenue, how much of a revenue increase are they hoping for? In what time period are they trying to accomplish this by?

You: How much is Coca-Cola looking to grow revenue by? And in what time period are they looking to achieve this level of growth?

Interviewer: They are looking to grow revenues by $1B over the next three years.

3. Look at potential organic growth opportunities

Once you have quantified the company’s target or goal, you can walk the interviewer through your growth strategy framework. You’ll most likely want to start by looking at organic growth opportunities first because this type of growth is more sustainable than inorganic growth.

You: To determine the best opportunities to achieve a $1B increase in revenues over the next three years, I’d like to use the following framework.

First, I’d like to consider potential organic growth opportunities. This includes growth through existing revenue sources and growth through new revenue sources.

Next, I’d like to look into potential inorganic growth opportunities. Is there a particular acquisition, joint venture, or partnership that would make sense for Coca-Cola to pursue? 

Interviewer: That sounds like a great plan. How should we proceed?

You: Let’s look at organic growth opportunities first. Since Coca-Cola is a mature company that has seen flat growth, I am guessing that there won’t be significant opportunities to increase revenues from existing revenue sources.

Interviewer: That seems like a reasonable assumption.

You: Okay, so let’s look at potential new revenue sources. Are there particular drink beverage markets that Coca-Cola has no presence in that they could expand into?

Interviewer: Let me share with you these exhibits on potential drink beverage markets Coca-Cola could enter…

4. Look at potential inorganic growth opportunities

After you have thoroughly investigated the organic growth opportunities, move onto looking into inorganic growth opportunities.

Consider whether an acquisition, joint venture, or partnership would be most appropriate given your company’s situation. Each of these methods of inorganic growth have their advantages and disadvantages.

You: After looking at organic growth opportunities, we determined that Coca-Cola could increase revenues by $600M by entering three niche drink beverage markets. However, we are still $400M in revenue short of our goal. I’d like to look into inorganic growth opportunities next. 

Interviewer: That makes sense. There are a few acquisition targets Coca-Cola is considering. Let me share with you some further information…

5. Prioritize and recommend the best opportunities for growth

Once you have investigated all of the potential opportunities for growth, it is time to prioritize and recommend the ones that are best for the company.

You’ll likely need to develop some kind of rubric to evaluate each growth opportunity. You can score each growth opportunity on the basis of:

  • Ease of implementation

In step two, you quantified the specific target or goal that the company is trying to achieve. Make sure that your recommendation meets these goals.

You: To achieve its revenue growth targets, I recommend that Coca-Cola enter three emerging drink beverage markets and that they acquire Company X. There are two reasons that support this.

One, Coca-Cola can leverage its existing production and distribution capabilities to gain meaningful market share in these emerging drink beverage markets quickly. They could increase revenues by $600M over three years fairly easily.

Two, the acquisition of Company X would increase revenues by $500M, helping Coca-Cola achieve its revenue growth target. Additionally, there are many revenue synergies that Coca-Cola can take advantage of to grow revenues even more over the next few years.

For next steps, I’d like to look into Coca-Cola’s market entry strategy for entering these emerging markets. I’d also like to look into whether the acquisition price for Company X is fair and reasonable.

Interviewer: Great. Thank you for your recommendation.

Final Thoughts on Growth Strategy Cases

The most important part of solving growth strategy cases is to be structured and methodical in considering all of the different growth opportunities. If you lay out a comprehensive and organized framework, the rest of the case should be a simple process of elimination.

You should pay special attention to the context of the case and the company’s circumstances. The stage of the company, how much free cash it has on hand, and the level of urgency the company is facing will help you narrow down your options.

After practicing a few growth strategy cases, you’ll notice that these cases follow a predictable pattern and you’ll be able to solve any growth strategy case that comes your way.

In addition to growth strategy case interviews, we also have additional step-by-step guides to: profitability case interviews , market entry case interviews , M&A case interviews , pricing case interviews , operations case interviews , marketing case interviews , and private equity case interviews .

Recommended Growth Strategy Case Interview Resources

Here are the resources we recommend to learn the most robust, effective case interview strategies in the least time-consuming way:

  • Comprehensive Case Interview Course (our #1 recommendation): The only resource you need. Whether you have no business background, rusty math skills, or are short on time, this step-by-step course will transform you into a top 1% caser that lands multiple consulting offers.
  • Hacking the Case Interview Book   (available on Amazon): Perfect for beginners that are short on time. Transform yourself from a stressed-out case interview newbie to a confident intermediate in under a week. Some readers finish this book in a day and can already tackle tough cases.
  • The Ultimate Case Interview Workbook (available on Amazon): Perfect for intermediates struggling with frameworks, case math, or generating business insights. No need to find a case partner – these drills, practice problems, and full-length cases can all be done by yourself.
  • Case Interview Coaching : Personalized, one-on-one coaching with former consulting interviewers
  • Behavioral & Fit Interview Course : Be prepared for 98% of behavioral and fit questions in just a few hours. We'll teach you exactly how to draft answers that will impress your interviewer
  • Resume Review & Editing : Transform your resume into one that will get you multiple interviews

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Use Our Resources and Tools to Get Started With Your Preparation!

Growth strategy, revenue growth is one of the most popular strategy cases in a case interview.

Usually, growth strategy cases are introduced by open-ended questions such as “A firm XYZ wants to increase their revenue. How should they go about it?”

Gather the necessary information about volume and price to determine the best growth lever

Case interviews  with revenue growth cases can be tackled by influencing two major parameters that determine growth figures. These are volume and unit price. In order to make suggestions, once again, you need to understand the client’s business and the industry. Growth strategies can focus on a product, a division, or the company as a whole. Areas you could investigate based on your hypothesis are:

  • What is the client’s product mix? What is the lifecycle of each product ?
  • What is the state of the respective industries? Are they growing?
  • Which product segments have the biggest potential?
  • What drives customer satisfaction?
  • How does the client’s sales growth rate compare to that of the competitors in the market ( Benchmarking )?
  • How are the client’s prices compared to that of competitors? For instance, if the product is a commodity, then prices should be similar.
  • What is the customers’ price sensitivity? If the product is a commodity, then customers are likely to be  very   price sensitive .
  • What are the client’s marketing and sales channel activities? Evaluate their effectiveness.
  • What are competitors’ marketing and sales channel activities? Evaluate the effectiveness if they are better than the clients’ sales.
  • What are the client’s available funds for growth (you can find it via balance sheet or cash flow statements )?
  • What do the shareholders' demand/expect?

Choose a growth strategy and the growth vector you want to pursue

After having gathered this set of information, you will have got a feeling for the type of growth that is demanded. Based on this information, you can then decide which growth strategy to implement. Roughly, you can subdivide strategies into (1) organic growth and (2) inorganic growth. The categories can further be organized using an Ansoff matrix .

Find new customers by (Ansoff Matrix):

  • Increase/switch distribution channels.
  • Expand the product lines.
  • Enter new markets .
  • Perform a major marketing campaign.
  • Increase your share of the wallet with your existing customers, e.g. by selling them add-on/bundled products.
  • Lower customer churn rate by preventing unwanted customer attrition.
  • Acquire other companies.

If you have thoroughly completed this BootCamp, you will notice that many case types overlap with each other. You will rarely find a case that fits only one type. Most of the strategic decisions intersect. After completing the BootCamp, you should get a feeling for those connections and be able to see the big picture. 

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EY-Parthenon Case: Virtual Marketplace

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Simon-Kucher Case: GST Cruise Company

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FTI-Andersch AG Case: Krise im Ferkelstall

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CTcon Case: Das beste Eis der Stadt!

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Finding new sources of profitable growth in a difficult media environment

A global media organization was struggling financially in the face of tough industry headwinds. On the plus side, they were armed with a strong brand, a diversified portfolio of holdings, and access to capital.  The questions were how and where to grow in order to re-assert profitability in the short term, while at the same time positioning itself for the future, with the increasing dominance of digital channels.

The business was currently losing tens of millions of dollars per year. 

Root causes: difficult media headwinds with declining advertising revenue and huge levels of complexity in the business. 

It was operating in multiple channels (TV, print, radio, digital, and conferences) across more than 100 countries—from Europe and the US to Russia and South Africa. Each had its own idiosyncrasies and consumer preferences for media consumption. Many times, this expansion happened via opportunistic partnerships. 

It was the classic ‘Greener Pasture’ siren that had led the business to chase short-term revenue at the expense of profitability.  Given that context, a key role for WP&C was injecting a disciplined, analytical view of growth adjacencies, where the theoretical adjacency-expansion opportunities were almost unlimited.

1: Build a new fact base

WP&C assessed and quantified the media landscape, advertising revenues, trends, competitors, and growth rates. We drilled down into individual end-markets & channels.

2: Identify strategic options

Based on the analysis, and the current position of the business, we developed a series of strategic alternatives, with a range of potential outcomes and differing capital requirements.

3: Operationalize the plan

We assessed how well the current operating model supported the strategic options. Once aligned on the growth plan, we highlighted specific changes required to execute on the plan.

Operationalize the plan

  • Use region-specific strategies.   Each region needs to be treated differently based on how media is consumed, and the level of return expected.
  • Heavily focus on Western EU,   where brand best positioned & financial returns highest. Hold off investment in Eastern Europe.
  • Generally, reduce cost to serve . Leverage existing TV assets to broaden reach and access. In Africa, achieve better scale economies by moving to a regional hub model.
  • Integrate the operating model.   Historically, business was siloed by media platform: inefficient, expensive and out of step with how people consume media. Move to new operating model oriented around markets and audience, as opposed to platforms.

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  • In 2 years, since the strategy was launched, the business has reversed its fortunes to be once again profitable
  • Revenues are up in TV, Radio, and Events —s ince launching the strategy, digital ad revenues grew more than 50%
  • The business has also successfully moved to a new operating model—a multiplatform ad proposition with content at the core, which is driving sales and focusing the business on customers

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How to Answer Growth Strategy Case Questions in Management Consulting Interviews?

Learn how to ace growth strategy case questions in management consulting interviews with our comprehensive guide.

Posted May 11, 2023

case study strategy growth

Table of Contents

If you are pursuing a career in management consulting, then it is important to be familiar with case interviews. Case interviews are a common part of the recruitment process and are used to evaluate a candidate's problem-solving skills and ability to think critically. Growth strategy cases are one type of case interview that you may encounter. In this article, we will provide you with a comprehensive guide on how to answer growth strategy case questions in management consulting interviews.

Understanding the Basics of Growth Strategy Case Questions

Growth strategy case questions require you to analyze a company's current situation and identify opportunities for growth. The case may involve a company that is looking to expand into new markets, launch new products, or increase revenue. Your job as a consultant is to help the company develop a growth strategy that is based on sound analysis and effective decision making.

When analyzing a company's current situation, it is important to consider both internal and external factors. Internal factors may include the company's financial health, organizational structure, and current product offerings. External factors may include market trends, competition, and regulatory changes. By taking a holistic approach to analysis, you can identify the most promising opportunities for growth and develop a strategy that is tailored to the company's unique situation.

Tips for Analyzing Growth Strategy Case Questions

One of the key skills required for growth strategy case questions is the ability to analyze complex business problems. You need to be able to break down the case into its component parts, identify the key drivers and barriers to growth, and develop a structured approach to solving the problem. Some tips for analyzing growth strategy case questions include:

  • Understanding the company's business model, including its products, customers, and competitors
  • Identifying trends in the industry, such as changes in consumer behavior or emerging technologies
  • Assessing the company's internal capabilities, including its financial position, operations, and talent

Another important aspect of analyzing growth strategy case questions is to consider the external factors that may impact the company's growth potential. This includes factors such as government regulations, economic conditions, and market saturation. It is important to understand how these external factors may affect the company's ability to grow and develop a strategy that takes them into account.

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Identifying Key Growth Drivers and Barriers in Case Questions

Once you have analyzed the case, you need to identify the key drivers and barriers to growth. These may include factors such as market size, the competitive landscape, regulatory environment, and customer preferences. It is important to prioritize these factors based on their impact on the company's growth potential.

Additionally, it is important to consider external factors that may impact the company's growth potential, such as economic trends, technological advancements, and political instability. These factors can have a significant impact on the company's ability to grow and succeed in the long term. By taking a holistic approach to analyzing the case, you can identify both internal and external factors that may impact the company's growth potential and develop a comprehensive strategy to address them.

Breaking Down Complex Business Problems to Develop Growth Strategies

Developing a growth strategy requires you to develop a deep understanding of the company's current position and future potential. You need to be able to break down complex business problems into manageable parts and develop focused solutions based on analysis. Some frameworks that you may find helpful for developing growth strategies include Porter's Five Forces, SWOT analysis, and the Boston Consulting Group (BCG) matrix.

One important aspect of developing growth strategies is to identify the key drivers of growth for the company. This involves analyzing the market trends, customer needs, and competitive landscape to determine where the company can differentiate itself and create value for its customers. By focusing on these key drivers, you can develop targeted growth strategies that align with the company's strengths and opportunities.

Another important consideration when developing growth strategies is to ensure that they are sustainable over the long term. This requires taking into account factors such as the company's financial resources, organizational capabilities, and risk tolerance. By developing growth strategies that are aligned with the company's overall vision and mission, and that take into account these key factors, you can create a roadmap for sustainable growth that will help the company achieve its goals over the long term.

Applying Frameworks to Solve Growth Strategy Case Questions

Frameworks such as Porter's Five Forces can help you evaluate the competitive dynamics of an industry, while the BCG matrix can help you analyze a company's product portfolio and make strategic decisions about investment. Applying these frameworks to the case will help you develop a structured approach to solving the problem and ensure that your recommendations are based on sound analysis.

Another useful framework to consider when solving growth strategy case questions is the Ansoff Matrix. This matrix helps you evaluate different growth strategies for a company, including market penetration, market development, product development, and diversification. By using the Ansoff Matrix, you can identify the best growth strategy for the company based on its current market position and growth objectives.

Using Data and Analytics to Support Your Growth Strategy Recommendations

An important part of developing a growth strategy is the use of data and analytics to support your recommendations. You need to be able to gather and analyze data on the market, customers, and competitors, and develop insights that support your strategy. Using analytics tools such as regression analysis and forecasting can help you make data-driven decisions and enhance the credibility of your recommendations.

Another important aspect of using data and analytics in your growth strategy is the ability to track and measure the success of your recommendations. By setting clear metrics and KPIs, you can monitor the impact of your strategy and make adjustments as needed. This allows you to continuously improve and optimize your growth strategy over time.

It's also important to consider the ethical implications of using data and analytics in your growth strategy. You need to ensure that you are collecting and using data in a responsible and transparent manner, and that you are respecting the privacy and rights of your customers. By prioritizing ethical considerations, you can build trust with your customers and stakeholders, and create a sustainable foundation for long-term growth.

Developing a Structured Approach to Answering Growth Strategy Case Questions

When answering growth strategy case questions, it is important to have a structured approach that helps you stay focused and organized. One effective approach is the MECE (Mutually Exclusive Collectively Exhaustive) framework, which involves breaking down a problem into mutually exclusive and collectively exhaustive parts. This approach can help you ensure that you are addressing all aspects of the case and not missing any critical insights.

Another important aspect of developing a structured approach to answering growth strategy case questions is to prioritize your analysis based on the most critical factors. This can be achieved by using a hypothesis-driven approach, where you start with a hypothesis about the most important factors driving growth and then test it through your analysis. By focusing on the most critical factors, you can avoid getting bogged down in irrelevant details and ensure that your analysis is focused and impactful.

Common Mistakes to Avoid When Answering Growth Strategy Case Questions

Some common mistakes that candidates make when answering growth strategy case questions include:

  • Ignoring key data or insights that are relevant to the case
  • Rushing through the analysis phase and not taking the time to fully understand the problem
  • Jumping to conclusions without considering the bigger picture
  • Not engaging the interviewer or asking questions to clarify the problem
  • Focusing too much on one aspect of the case to the exclusion of others

Another common mistake that candidates make when answering growth strategy case questions is failing to consider the potential risks and challenges associated with their proposed solution. It's important to not only identify opportunities for growth, but also to assess the feasibility and potential drawbacks of each option. Additionally, candidates may overlook the importance of effective communication and presentation skills when presenting their findings and recommendations to the interviewer. Clear and concise communication is key to effectively conveying your ideas and demonstrating your problem-solving abilities.

Practicing with Sample Case Questions to Improve Your Skills in Answering Growth Strategy Case Questions

The best way to improve your skills in answering growth strategy case questions is to practice with sample case questions. There are many resources online that provide free sample case questions, as well as books and courses that offer more in-depth practice. Remember to focus on developing your analytical and problem-solving skills, and to take a structured approach to answering the questions.

The Importance of Communication and Presentation Skills in Answering Growth Strategy Case Questions

Finally, it is important to remember that communication and presentation skills are also critical when answering growth strategy case questions. You need to be able to clearly articulate your ideas and recommendations, and to present your analysis in a way that is easy for others to understand. Some tips for improving your communication and presentation skills include:

  • Practicing your presentation skills, including voice projection, eye contact, and body language
  • Preparing visual aids, such as slides or diagrams, to help illustrate your point
  • Developing a clear and concise message that summarizes your analysis and recommendations
  • Engaging the audience by asking questions or soliciting feedback
  • Maintaining a positive and confident attitude throughout the presentation

How to Prepare for Growth Strategy Case Questions Before an Interview

If you are preparing for a management consulting interview that includes growth strategy case questions, there are several things you can do to get ready:

  • Research the company and its industry to gain a better understanding of the context that the case questions may relate to
  • Practice with sample case questions to develop your analytical and problem-solving skills
  • Review frameworks such as Porter's Five Forces and the BCG matrix to become familiar with the tools that are commonly used in growth strategy analysis
  • Seek feedback from others, such as colleagues or mentors, on your problem-solving and communication skills

Differences Between Answering Growth Strategy Cases in First-Round vs Final-Round Interviews

Finally, it is important to note that there may be differences in the complexity and depth of growth strategy case questions between first-round and final-round interviews. In first-round interviews, the focus is typically on evaluating your problem-solving skills and ability to think critically, while in final-round interviews, the focus may shift to evaluating your communication and presentation skills, as well as your fit with the company culture.

In conclusion, answering growth strategy case questions in management consulting interviews requires a combination of analytical, problem-solving, and communication skills. By developing a structured approach, practicing with sample case questions, and seeking feedback from others, you can improve your chances of success in these types of interviews.

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Home » Management Case Studies » Case Study: Nestle’s Growth Strategy

Case Study: Nestle’s Growth Strategy

Nestle is one of the oldest of all multinational businesses. The company was founded in Switzerland in 1866 by Heinrich Nestle, who established Nestle to distribute “milk food,” a type of infant food he had invented that was made from powdered milk, baked food, and sugar. From its very early days, the company looked to other countries for growth opportunities, establishing its first foreign offices in London in 1868. In 1905, the company merged with the Anglo-Swiss Condensed Milk, thereby broadening the company’s product line to include both condensed milk and infant formulas. Forced by Switzer ­land’s small size to look outside’ its borders for growth opportunities, Nestle established condensed milk and infant food processing plants in the United States and Britain in the late 19th century and in Australia, South America, Africa, and Asia in the first three decades of the 20th century. In 1929, Nestle moved into the chocolate business when it acquired a Swiss chocolate maker. This was fol ­lowed in 1938 by the development of Nestle’s most rev ­olutionary product, Nescafe, the world’s first soluble coffee drink. After World War 11, Nestle continued to expand into other areas of the food business, primarily through a series of acquisitions that included Maggi (1947), Cross & Blackwell (1960), Findus (1962), Libby’s (1970), Stouffer’s (1973), Carnation (1985), Rowntree (1988), and Perrier (1992). By the late 1990s, Nestle had 500 factories in 76 countries and sold its products in a staggering 193 nations-almost every country in the world. In 1998, the company generated sales of close to SWF 72 billion ($51 billion), only 1 percent of which occurred in its home country. Similarly, only 3 percent of its- 210,000 employees were located in Switzerland. Nestle was the world’s biggest maker of infant formula, powdered milk, chocolates, instant coffee, soups, and mineral waters. It was number two in ice cream, breakfast cereals, and pet food. Roughly 38 percent of its food sales were made in Europe, 32 percent in the Americas, and 20 percent in Africa and Asia.

Nestle's Growth Strategy

Management Structure

Nestle is a decentralized organization . Responsibility for operating decisions is pushed down to local units, which typically enjoy a high degree of autonomy with regard to decisions involving pricing, distribution, marketing, human resources, and so on. At the same time, the company is organized into seven worldwide strategic business units (SBUs) that have responsibility for high-level strategic decisions and business development. For example, a strategic business unit focuses on coffee and beverages. Another one focuses on confectionery and ice cream. These SBUs engage in overall strategy development, including acquisitions and market entry strategy. In recent years, two-thirds of Nestle’s growth has come from acquisitions, so this is a critical function. Running in parallel to this structure is a regional organization that divides the world into five major geographical zones, such as Europe, North America and Asia. The regional organizations assist in the overall strategy development process and are responsible for developing regional strategies (an example would be Nestle’s strategy in the Middle East, which was discussed earlier). Neither the SBU nor regional managers, however, get involved in local operating or strategic decisions on anything other than an exceptional basis.

Although Nestle makes intensive use of local managers to knit its diverse worldwide operations together, the company relies on its “expatriate army.” This consists of about 700 managers who spend the bulk of their careers on foreign assignments , moving from one country to the next. Selected primarily on the basis of their ability, drive and willingness to live a quasi-nomadic lifestyle, these individuals often work in half-a-dozen nations during their careers. Nestle also uses management development programs as a strategic tool for creating an esprit de corps among managers. At Rive-Reine, the company’s international training center in Switzerland, the company brings together, managers from around the world, at different stages in their careers, for specially targetted development programs of two to three weeks’ duration. The objective of these programs is to give the managers a better understanding of Nestle’s culture and strategy, and to give them access to the company’s top management.

The research and development operation has a special place within Nestle, which is not surprising for a company that was established to commercialize innovative food stuffs. The R&D function comprises 18 different groups that operate in 11 countries throughout the world. Nestle spends approximately 1 percent of its annual sales revenue on R&D and has 3,100 employees dedicated to the function. Around 70 percent of the R&D budget is spent on development initiatives. These initiatives focus on developing products and processes that fulfill market needs, as identified by the SBUs, in concert with regional and local managers. For example, Nestle instant noodle products were originally developed by the R&D group in response to the perceived needs of local operating companies through the Asian region. The company also has longer-term development projects that focus on developing new technological platforms, such as non-animal protein sources or agricultural biotechnology products.

A Growth Strategy for the 21 st Century

Despite its undisputed success, Nestle realized by the early 1990s, that it faced significant challenges in maintaining its growth rate. The large Western European and North American markets were mature. In several countries, population growth had stagnated and in some, there had been a small decline in food consumption. The retail environment in many Western nations had become increasingly challenging and the balance of power was shifting away from the large-scale manufacturers of branded foods and beverages, and toward nationwide supermarket and discount chains. Increasingly, retailers found themselves in the unfamiliar position of playing off against each other – manufacturers of branded foods, thus bargaining down prices. Particularly in Europe, this trend was enhanced by the successful introduction of private-label brands by several of Europe’s leading supermarket chains. The results included increased price competition in several key segments of the food and beverage market, such as cereals, coffee and soft drinks.

At Nestle, one response has been to look toward emerging markets in Eastern Europe, Asia and Latin America for growth possibilities. The logic is simple and obvious – a combination of economic and population growth, when coupled with the widespread adoption of market-oriented economic policies by the governments of many developing nations, makes for attractive business opportunities. Many of these countries are still relatively poor, but their economies are growing rapidly. For example, if current economic growth forecasts occur, by 2010, there will be 700 million people in China and India that have income levels approaching those of Spain in the mid-1990s. As income levels rise, it is increasingly likely that consumers in these nations will start to substitute branded food products for basic foodstuffs, creating a large market opportunity for companies such as Nestle.

In general, Nestle’s growth strategy had been to enter emerging markets early – before competitors – and build a substantial position by selling basic food items that appeal to the local population base, such as infant formula, condensed milk, noodles and tofu. By narrowing its initial market focus to just a handful of strategic brands, Nestle claims it can simplify life, reduce risk, and concentrate its marketing resources and managerial effort on a limited number of key niches. The goal is to build a commanding market position in each of these niches. By pursuing such a strategy, Nestle has taken as much as 85 percent of the market for instant coffee in Mexico, 66 percent of the market for powdered milk in the Philippines, and 70 percent of the markets for soups in Chile. As income levels rise, the company progressively moves out from these niches, introducing more upscale items, such as mineral water, chocolate, cookies, and prepared foodstuffs.

Although the company is known worldwide for several key brands, such as Nescafe, it uses local brands in many markets. The company owns 8,500 brands, but only 750 of them are registered in more than one country, and only 80 are registered in more than 10 countries. While the company will use the same “global brands” in multiple developed markets, in the developing world it focuses on trying to optimize ingredients and processing technology to local conditions and then using a brand name that resonates locally. Customization rather than globalization is the key to the Nestle’s growth strategy in emerging markets.

Executing the Strategy

Successful execution of the strategy for developing markets requires a degree of flexibility, an ability to adapt in often unforeseen ways to local conditions, and a long-term perspective that puts building a sustainable business before short-term profitability. In Nigeria, for example, a crumbling road system, aging trucks, and the danger of violence forced the company to re-think its traditional distribution methods. Instead of operating a central warehouse, as is its preference in most nations, the country. For safety reasons, trucks carrying Nestle goods are allowed to travel only during the day and frequently under-armed guard. Marketing also poses challenges in Nigeria. With little opportunity for typical Western-style advertising on television of billboards, the company hired local singers to go to towns and villages offering a mix of entertainment and product demonstrations.

China provides another interesting example of local adaptation and long-term focus. After 13 years of talks, Nestle was formally invited into China in 1987, by the Government of Heilongjiang province. Nestle opened a plant to produce powdered milk and infant formula there in 1990, but quickly realized that the local rail and road infrastructure was inadequate and inhibited the collection of milk and delivery of finished products. Rather than make do with the local infrastructure, Nestle embarked on an ambitious plan to establish its own distribution network, known as milk roads, between 27 villages in the region and factory collection points, called chilling centres. Farmers brought their milk – often on bicycles or carts – to the centres where it was weighed and analysed. Unlike the government, Nestle paid the farmers promptly. Suddenly the farmers had an incentive to produce milk and many bought a second cow, increasing the cow population in the district by 3,000 to 9,000 in 18 months. Area managers then organized a delivery system that used dedicated vans to deliver the milk to Nestle’s factory.

Although at first glance this might seem to be a very costly solution, Nestle calculated that the long-term benefits would be substantial. Nestle’s strategy is similar to that undertaken by many European and American companies during the first waves of industrialization in those countries. Companies often had to invest in infrastructure that we now take for granted to get production off the ground. Once the infrastructure was in place, in China, Nestle’s production took off. In 1990, 316 tons of powdered milk and infant formula were produced. By 1994, output exceeded 10,000 tons and the company decided to triple capacity. Based on this experience, Nestle decided to build another two powdered milk factories in China and was aiming to generate sales of $700 million by 2000.

Nestle is pursuing a similar long-term bet in the Middle East, an area in which most multinational food companies have little presence. Collectively, the Middle East accounts for only about 2 percent of Nestle’s worldwide sales and the individual markets are very small. However, Nestle’s long-term strategy is based on the assumption that regional conflicts will subside and intra-regional trade will expand as trade barriers between countries in the region come down. Once that happens, Nestle’s factories in the Middle East should be able to sell throughout the region, thereby realizing scale economies. In anticipation of this development, Nestle has established a network of factories in five countries, in the hope that each will, someday, supply the entire region with different products. The company, currently makes ice-cream in Dubai, soups and cereals in Saudi Arabia, yogurt and bouillon in Egypt, chocolate in Turkey, and ketchup and instant noodles in Syria. For the present, Nestle can survive in these markets by using local materials and focusing on local demand. The Syrian factory, for example, relies on products that use tomatoes, a major local agricultural product. Syria also produces wheat, which is the main ingredient in instant noodles. Even if trade barriers don’t come down soon, Nestle has indicated it will remain committed to the region. By using local inputs and focussing on local consumer needs, it has earned a good rate of return in the region, even though the individual markets are small.

Despite its successes in places such as China and parts of the Middle East, not all of Nestle’s moves have worked out so well. Like several other Western companies, Nestle has had its problems in Japan, where a failure to adapt its coffee brand to local conditions meant the loss of a significant market opportunity to another Western company, Coca Cola. For years, Nestle’s instant coffee brand was the dominant coffee product in Japan. In the 1960s, cold canned coffee (which can be purchased from soda vending machines) started to gain a following in Japan. Nestle dismissed the product as just a coffee-flavoured drink rather than the real thing and declined to enter the market. Nestle’s local partner at the time, Kirin Beer, was so incensed at Nestle’s refusal to enter the canned coffee market that it broke off its relationship with the company. In contrast, Coca Cola entered the market with Georgia, a product developed specifically for this segment of the Japanese market. By leveraging its existing distribution channel, Coca Cola captured a 40 percent share of the $4 billion a year, market for canned coffee in Japan. Nestle, which failed to enter the market until the 1980s, has only a 4 percent share.

While Nestle has built businesses from the ground up, in many emerging markets, such as Nigeria and China, in others it will purchase local companies if suitable candidates can be found. The company pursued such a strategy in Poland, which it entered in 1994, by purchasing Goplana, the country’s second largest chocolate manufacturer. With the collapse of communism and the opening of the Polish market, income levels in Poland have started to rise and so has chocolate consumption. Once a scarce item, the market grew by 8 percent a year, throughout the 1990s. To take advantage of this opportunity, Nestle has pursued a strategy of evolution, rather than revolution. It has kept the top management of the company staffed with locals – as it does in most of its operations around the world – and carefully adjusted Goplana’s product line to better match local opportunities. At the same time, it has pumped money into Goplana’s marketing, which has enabled the unit to gain share from several other chocolate makers in the country. Still, competition in the market is intense. Eight companies, including several foreign-owned enterprises, such as the market leader, Wedel, which is owned by PepsiCo , are vying for market share, and this has depressed prices and profit margins, despite the healthy volume growth.

Discussions:

  • Does it make sense for Nestle to focus its growth efforts on emerging markets? Why?
  • What is the company’s strategy with regard to business development in emerging markets? Does this strategy make sense? From an organizational perspective, what is required for this strategy to work effectively?
  • Through your own research on NESTLE, identify appropriate performance indicators. Once you have gathered relevant data on these, undertake a performance analysis of the company over the last five years. What does the analysis tell you about the success or otherwise of the strategy adopted by the company?
  • How would you describe Nestle’s strategic posture at the corporate level; is it pursuing a global strategy, a multidomestic strategy an international strategy or a transnational strategy?
  • Does this overall strategic posture make sense given the markets and countries that Nestle participates in? Why?
  • Is Nestle’s management structure and philosophy aligned with its overall strategic posture?

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  • Case Study: Lenovo’s “PC Plus” Strategy
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  • Case Study on Marketing Strategy: Starbucks Entry to China
  • Business Strategy Case Study: Relaunch of Fiat 500
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29 Growth Marketing Case Studies

by Samuel J. Woods

More than anything else, I regularly come across people asking for growth marketing case studies .

It’s one thing to have a list of “growth hacks” and a general sense of growth marketing methodology and process.

But quite another to learn how other companies went from zero to traction, then scale and growth.

Everyone wants to discover what other companies have done successfully. And see what’s possible, across channels, growth processes , “growth hacking”, and growth teams .

But uncovering hidden growth opportunities takes time, effort, analysis, and constant testing.

So, I analyzed and studied how a number of companies did it.

What you’ll see in this article are a wide range of companies—SaaS, apps, marketplaces, e-commerce, platforms.

Many went from small to big, fast.

Here are 29 growth marketing case studies.

Growth Marketing Case Studies Reveal a Variety of Growth Paths

Given the spread in types of companies, you can expect to learn about various growth strategies, tactics, and the path they took toward exponential growth.

Some took years, others took months. But one way or another, they tapped into a market, a need, with a product or service that solved their problems.

case study strategy growth

Growth Marketing Case Study #1: Etsy

From June 2005 to 2022, craft super seller Etsy went from a concept to nearly 14 billion in sales (in 2021), including more than 4 million sellers and almost 40 million active buyers.

Now, Etsy is a publicly-traded Nasdaq company (ETSY) with a $13 billion market cap.

How did they do it? Here’s the snapshot.

A Needed Change: Craft sellers were aggravated that eBay was so cumbersome, stingy, and seemed to lack care for sellers. These factors created an environment that was supercharged for a platform like Etsy.

They Weren’t Lazy: A marketplace is unique because it requires both buyers and sellers to be successful.

Without awesome products, there would be no need for buyers.

The founders went to every artisan flea market and craft fair to introduce them to the craft-specific selling platform.

Finding Buyers: Etsy was able to tap into a rise in the craft industry fueled by a renaissance of handmade crafters.

Some of these early product creators had built an audience but hadn’t interconnected or listed their items through an eCommerce platform.

Growing Organically: Typically, Etsy only pays for around 2-7% of their traffic (which is insane). This “grassroots” growth comes from getting out of the way of their sellers.

With 150 third-party apps and sellers who are empowered to grow their own business as they see fit, getting out of the way has led to the exponential growth of both sellers and buyers.

Continued Growth: Since its IPO, Etsy has continued to grow rapidly. Now, growth comes primarily through experimentation and a growth marketing strategy handled by teams of people.

Split testing, coming up with experiments, breaking down features, and changing small elements to gauge usefulness and user response has fueled growth.

Key Takeaways from Etsy:

  • Having a keen sense of market needs can lead to initial traction and validation.
  • One of the best ways to see growth in a new online business is to promote it through physical events to the public.
  • Provide the right tool(s) and network with key players (that have an audience that needs your stuff).
  • Figuring out ways to empower users to become brand ambassadors is a key to long-term and sustainable growth.
  • Large amounts of growth are possible at every level. Strategies may change, and teams may grow, but organized experimentation, failing fast, and setting up processes will help you succeed.

case study strategy growth

Growth Marketing Case Study #2: Nasty Gal

From 2006 until 2008, Nasty Gal was an eBay business that bought and sold vintage goods for its founder (Sophia Amoruso) to try and make a living.

In 2008, she opened a stand-alone e-Commerce site, and by 2011, it hit $28 million in sales.

The following year, Nasty Gal reported $100 million in revenue and began experimenting with physical locations.

Here’s the brief on how.

Consistent Persistence: Amoruso started an eBay store (called Nasty Gal Vintage) back in 2006 to pay rent. She realized a heavy desire among millennials to dress in vintage clothes due to the unique styles of previous eras.

When she hit what would be a detrimental blow to most (her eBay store was shut down), it didn’t stop her.

That persistence led to an independent site with $28 million in revenue by 2011 (all from vintage clothing arbitrage).

Leveraging Platforms: Using share-worthy style, high margin vintage finds, and a few local models, Nasty Gal built a large following using eBay and social platforms like Myspace (well before Facebook ads).

Her strategy was simple in the early days. She made her models not only look but feel awesome and set out to “…sell things for more than you bought them.”

Perceived Value: Without even knowing what it was, Sophia knew that if she positioned clothing a certain way, it would drive up the price of the early eBay auctions.

Taking decades-old clothing and styling it on the right college-aged model with thoughtful positioning and accessories meant large profits early on and continues today. The way you present can alter the way products are perceived.

Initial Testing: Early eBay was a split-testing ground for Nasty Gal. Testing everything, including the headlines on auctions, the images available, product styles, and putting one article of clothing on several different models to try what hit and missed.

This experimentation led to gains week after week and a store that constantly performed better.

Raising the Stakes: Once the eBay store was shut down, the site came to life with a hefty social following and loyal fans. Selling out of merchandise led to Amoruso seeking a Nasty Gal line.

Through continued experimentation, social presence, and sticking to its core audience, the company has seen incredible growth.

With $100 million in revenue (2015), $65 million in VC funds last year, and two physical locations, the growth is set to continue.

case study strategy growth

Growth Marketing Case Study #3: Growth Hackers

This look at Growth Hackers will speak strongly to the frustrated founder who has hit a growth plateau.

The company seemingly stalled at 90,000 users. Then, after a little focus and only 11 weeks, that number reached over 150,000.

Get ready for a straight dose of data as we look at how they did it.

High Tempo Time: Testing different growth strategies had slowed, and goals weren’t being met. These two factors led to a stagnant user growth chart and a company not living up to its name. Recognizing this was a huge first step to setting a goal of three experiments per week.

Defining Experiments: The types of things Growth Hackers identify as experiments aren’t just a simple split test (even though those are included). New initiatives, new/revamped product releases, and other things were included to test.

It Takes a Village: A team of people was gathered from around the company to be involved with generating the ideas for experimentation.

The Hackers cited that if one person is in charge of the idea process, the number of experiments to be tested will run out without seeing the type of growth that is desired.

Their efforts resulted in hundreds of ideas that had to be prioritized by potential benefit and ease/speed of implementation.

Pace Yourself (and Meet Often): Some of the experiments took more effort than others (which is normal). However, when these larger tests were run, it caused the crew not to hit their three-a-week goal.

This problem required that they set weekly meetings to identify problems and methodically sort through their experiment list.

The Process Works: Growth Hackers was able to grow the number of users (62,000) within 11 weeks. That same number of users took 32 weeks for the company to attain during launch.

case study strategy growth

Growth Marketing Case Study #4: Slack

If you love growth stories, you’ve heard of slack. This would-be game company that turned its focus to team communication has received an incredible amount of attention.

From 15,000 users at launch (February 2014) to over 10 million daily active users now, their story is nothing short of amazing.

Here are the highlights of their early traction.

Defining a New Tool: For slack, defining itself was an issue at first. It was when they defined an entire software category that existed(but really didn’t) that they found their focus.

Offices around the world were using dozens of different tools to communicate with other team members and colleagues which made slack a no-brainer to create.

Selling the Dream: Slack is a useful tool, but offices had to be convinced they really needed it (borderline couldn’t live without it).

Since they were able to identify a whole new market, they also had to deal with educating their ideal customers and convincing them it was a need.

Once they were able to get this across, traction came like a flood.

Focus is Key: Early on, the slack founders were influenced to pick out the software’s key features and just do those as well as they possibly could.

Winning big where they won instead of even focusing across the board.

Features weren’t wholeheartedly denied, but an incredible level of care was spent perfecting file sharing and search synchronization (incredibly important to highly connected teams).

Once offices saw the results, word of mouth caused growth to catch fire again.

Give it Away: Slack followed suit of some of the most popular organization apps and offered a free service that was incredibly useful. Teams who saw that value would get the better options to a tune of a 30% conversion rate (free to paid).

A freemium model was a huge factor in the early growth that brought all of the media and VC attention, but the app itself kept paying customers.

Smooth Onboarding: Since it is a useful tool, slack had to be careful not to create a cumbersome learning curve for users.

The development of a simple and intuitive interface that allows teams to be created seamlessly and communicate immediately helped more people hit the ground running.

case study strategy growth

Growth Marketing Case Study #5: New Relic

New Relic is an analytics company that reveals the deepest secrets of cloud software and apps.

From their start in 2008 until now, they’ve managed to gain 15,400 clients (as of 2020) and monitor over 1 million websites and 1 billion (with a b) apps.

Their customers range from startups to Fortune 500s and government agencies. Their growth is incredible.

So how’d they do it? Here’s how.

Solve a Problem: The basic rule of entrepreneurship is to solve a need, and New Relic knew that they would have to create something great for a market as picky as a development community.

Early traction can almost all be traced by the quality of their product and its usefulness, making their focus on providing an excellent tool worthwhile.

Create Salespeople: Early marketing efforts were heavily focused on not only selling to large development firms but specifically Ruby on Rails programmers.

This approach was different in the sense that New Relic went after people instead of agencies, leading to popularity among those who would actually use their product.

Things like t-shirts for users and meetups led to a sense of community all built around their excellent product.

Give It Away: A freemium model would give skittish developers a chance to view their program’s analytics, enticing them to upgrade to paid.

New Relic’s marketing was simple, convince prospects to sign up and deploy to get a t-shirt and let the product do the rest.

Spending Money: In addition to shirts, the company is spending money on social ads and traffic at a high rate to gain relevant traffic. The brand is also employing multiple tools and SaaS products to gather the data they need to grow even faster.

Addictive Personality: With the product just being so dang valuable, their customers actually get dependent on the insights gained from it.

This need for the data has led to an almost unheard of negative churn rate (meaning their customers spend more year over year).

This rare occurrence happens due to the amount of data created and the space taken up on servers. Talk about growth.

case study strategy growth

Growth Marketing Case Study #6: Tinder

Shrouded in scandal and misinformation, tinder has a truly fascinating story.

Their growth has come from a mix of newsworthy attention as well as innovation in a stale and competitive market.

From the start in late 2012 until now, they’ve garnered 75 million monthly active users.

All those people use the iconic “swipe” feature over 1 billion times per day.

How much they’re worth and how much trouble they’ve seen maybe cloudy, but the best story is in their growth.

Here’s the snapshot.

Ground Game: Online dating is a notoriously tough niche, but tinder knew what it needed to succeed.

A large number of females using the app would then entice guys to join, but the supply of potential dates had to be there first.

They met this problem from sorority houses, getting girls to sign up one dorm at a time. Next, you just had to tell the college guys there were girls.

Make It Fun: The need for loads of users in each town led to the gamification of the tinder app itself.

By creating the ability to keep “swiping,” you create a sense of wonder and hope that you’ll hit the jackpot with another flick or two. This feature has been a huge factor in the overall success.

Make It Better: Tinder was able to not only create an app in a crowded market, they were able to highlight some common issues with the giants and make them better. Ladies are less likely to get heckled by countless heathens with features built into the app, making more women use (and even enjoy) the app.

Keep Going: To keep people’s profiles fresh and used, tinder continues to add features and tweak them into a more social experience (without losing its core value).

Add-ons like ‘matchmaker’, which allows someone to introduce two friends through the app, or ‘moments’, which allows a user to share edited visuals with matches.

case study strategy growth

Growth Marketing Case Study #7: Stripe

If you want to create a company that attracts investors like a bug zapper on a front porch, listen to stripe’s story.

A couple of guys (with previous success) managed to create an online payment processor that attracted the attention of the guys who made one of the first (PayPal).

With a current market cap of more than $94 billion, Stripe processes billions more every year.

How’d it happen? Let’s see.

Addressing Elephants: While payment processors existed, they were incredibly cumbersome.

Connectivity and customers were growing at a far greater rate than the ability to take payments. This obvious problem led the three founders to have a simple goal, make it easy for ecommerce businesses to take payments.

Being Different: Figuring out the frustration of other popular processors (PayPal, Google), Stripe was able to develop a platform that was business friendly.

Features that set them apart included the ability for customers to stay on the seller’s site for the entire transaction, and reducing backend features that were confusing and difficult to navigate.

Close Customer Base: Stripe used its surroundings to find it’s first loyal customers. Since the company was part of a community of companies from an incubator, they were able to use that as leverage (most of them needed a payment processor).

Organic Growth: The product spoke well to online business owners and received incredible word of mouth exposure during it’s early days.

To accelerate this advocacy, stripe sent care packages, including shirts and stickers, to developers who used the product. There were also meetups and community events that fostered loyalty.

Constant Improvement: Stripe knows who their customers are and have continuously created new solutions for developers to keep them happy and talking.

From offering specialized support for all popular programming languages, to adding new features, there is always a better stripe in development. They’ve even begun to tackle mobile payments which almost ensures more growth in the coming months.

case study strategy growth

Growth Marketing Case Study #8: Spotify

Spotify. You’ve probably heard the name. You’re likely one of the 406 million users.

The company was valued at $10 billion in just six years on the market.

Now, it’s publicly traded with a more than $20 billion market cap.

This story is incredible. We’ll take a quick look at the key ingredients to this explosive growth.

Be Different: Music is a giant industry, and the competition couldn’t be tougher.

However, there was a gaping hole in the market. Spotify launched in the U.S. with the simple, yet powerful difference of all the music you want for a low monthly fee.

From a per album and track pricing method to unlimited is almost the definition of disruption. Growth was immediate.

Deliver the Goods: There were other services, but with no options. These early versions were more like radio and lacked to ability to create a soundtrack to your life.

Spotify allowed people to be in control of their music, a feature that many would pay for instead of being fed music.

Free Growth: The freemium model is one often used to help disrupt industries. Spotify does this by delicately placing ads and limiting features as not to upset users or be classified as pirating (70% of ad income goes to song rights holders).

Multiple Launches: Before launching in the U.S. in 2011 (partnering with Facebook which was another huge proponent to early growth), the company beta launched and then officially launched in multiple European countries. These tiered released allowed them to hone their message and buyer personas.

U.S. and Facebook: Launching in the U.S. (after finding their voice) caused Spotify to explode, increasing web traffic well over a million visitors a month within four months time.

Their partnership with Facebook and integrating with the social network garnered another exponential growth session gaining 1 million new users within one month.

case study strategy growth

Growth Marketing Case Study #9: Airbnb

Necessity may be the mother of all invention, but AirBnB almost didn’t succeed.

Sometimes it takes real tenacity to see growth and it worked out well for the lodging giant.

Now worth $100 billion and responsible for more stays than anyone else in the hospitality industry, this company has seen itself through tough times to sit on the top of an industry in record time.

We’ll give you the highlights.

Hustle Fund: Well before their 450 million in funding, the founders of AirBnB had to raise their own capital. Creating a couple of politically geared cereals (Obama-O’s and Cap’n MCcain’s) the team was able to raise 30k of crucial funds.

Using Your Skills: One of the most questionable factors to Airbnb’s growth is their pillaging of Craigslist.

These gifted developers engineered a solution that was able to pirate both visitors and rental listers from the popular community site.

This tactic isn’t easy and is borderline taboo, but was used to create the largest vacation property site on the internet.

Do What You Gotta: Early on, too many properties were struggling with revenue.

The problem was traced to bad pictures which created less interest. The solution was very hands on; renting an expensive camera and taking high quality photos of every property in New York.

The income doubled and eventually became an expensive (yet effective) program. AirBnB now employees 2000 freelance photographers and revenue has hit exponential growth since the program’s introduction.

Removing Fear: There are obvious concerns when renting your home to strangers (and vice versa).

The company realized that removing fears of those who were interested in using AirBnB (yet hadn’t rented or listed) was a crucial element of growth.

Introducing social integration allowed visitors to see connections and social proof of those who had stayed in a particular location.

Going WorldWide: With so many beautiful locations around the world, AirBnB has started to see another round of huge growth from international stays. This outlet will also be a focus for continued increase in the coming years.

case study strategy growth

Growth Marketing Case Study #10: WhatsApp

WhatsApp started as a company that stuck to its guns to do one thing (allowing people to message inexpensively) and do it without ads.

This initial goal helped them attract users for the messaging app quickly, but had them second guessing any funding.

After some tenacious VC’s the app now boasts over two billion users and 1 million more daily!

Here’s the brief story of how it happened.

Pivot Power: Most companies don’t reach success offering their service they way it started. WhatsApp started as an app to let others know you weren’t available by phone. This idea failed to catch fire, until push notifications were invented.

This new feature allowed WhatsApp users to alert friends of their status instantly across the world, giving life to the idea for a messaging app.

Principle Power: The app’s founder has a note taped to his desk professing “no ads” among other things. Their product doesn’t use ads and is free for the first year($0.99 cents/year thereafter).

These core principles are still alive and set WhatsApp apart from dozens of competitors aiming for ad revenue and other gimmicks.

Pricing Power: WhatsApp is such a low-cost alternative to many other carriers and services in other countries that international growth is faster than most other famous startups combined (Facebook included). Pricing to scale is a popular feature among startups.

Timing Power: WhatsApp had expenses for the free service that required a paid option. This problem led to the $1 price point it has today, but the timing of the paid option came with an ability to share pictures which meant growth stayed steady.

Facebook Power: The app has been purchased by Facebook, which has more than added to the growth (to the tune of 25 million users a month). However, the change does come with skepticism due to Facebook’s privacy concerns.

case study strategy growth

Growth Marketing Case Study #11: LinkedIn

Executives, middle class job seekers, and networking connectors love LinkedIn.

Within a year of going live (2003) the networking social platform had half a million users, and the growth didn’t slow down there.

It’s now a publicly traded company (LNKD) that boasts well over 810 million users and thousands of employees worldwide.

Here’s the quick look at their growth story.

Start With a Need: The need for quality prospects on both the employer and employee sides of the job coin warranted a solution.

While there were other options in the early 2000’s, none offered a place for executives and decision makers to find the connections they needed. The opportunity that LinkedIn capitalized on.

Niching Down: While the startup did find resistance in the beginning (tech bubble trouble), they were able to focus on Silicon Valley and find executives eager to fill their sparse staffs with qualified talent and connect with others.

This choice would eventually garner the acceptance of the professional community.

Not So Free: While LinkedIn did remain free, they weren’t making significant revenue from ads. When they added paid features like job listings, subscriptions, and more recently and ad platform, their revenue began to take shape.

Focus on Strength: Monitoring analytics allowed LinkedIn to notice that they were very good at engaging the initial traffic reaching their site, but not as good connecting with a cold email audience. This fact led them to focus on their homepage conversions rather than email, a difficult but effective solution that led to exponential growth.

Testing to Virality: Before the company would concentrate on revenue it had to secure its growth. To do this there was a heavy period of good old growth hacking experiments, tests, and analytics until they reached a planned viral loop.

Audience Before Business: Building a large and engaged community of users before concentrating on revenue gave LinkedIn the opportunity to build a business model around an audience they already knew (and had in their pocket).

This knowledge has led to acquisitions (Slideshare) and content platforms (Pulse) that are driving continued growth.

case study strategy growth

Growth Marketing Case Study #12: Yelp

If you love a good not-so-underdog story, then Yelp’s story is probably one you’ll enjoy.

In a world of social review sites, yelp managed to rise above some big branded names and boasts over 95 million reviews.

The site received an average of 85 million views in the fourth quarter of 2015 on mobile devices alone.

It started from humble San Fran beginnings and has gone on to become a publicly traded company worth around $5 billion.

Openly Different: Yelp decided early on that reviews wouldn’t be anonymous (like the other review sites). Instead, users have profiles and are empowered to share more reviews becoming a valued member of a community.

Fostering Quality: Other review sites are often full of overly negative and one time reviewers. Yelp has created a system to reward regular reviewers with titles, ranks and other goodies to encourage a constant and accurate stream of reliable reviewers.

Start Small: Starting in the local San Francisco scene, the Yelp team was able to fix issues and gather a tight knit community. Afterwards, it was easier to take on city after city which made growth naturally exponential.

Genuinely User Friendly: So many review sites have to cater to advertisers. The problem with this model is that most ads are for the companies being reviewed (an obvious conflict of interest). However, Yelp has managed to keep the focus on a democratic review system and is seemingly unbiased.

Natural Growth: When you can create a user generated environment that allows visitors to genuinely find the best place to spend their money, you will have the type of growth that Yelp has seen. This growth has in turn spread to the businesses that deserve it. Local places that have the reviews see a jump in revenue.

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Growth Marketing Case Study #13: GitHub

Programmers and developers love the idea of open source, but had a cumbersome process to add value and create.

Seeing this need has led GitHub to an incredible amount of success.

From initial traction of 100,000 users in a year, to now having over 73 million active users with thousands more every day.

Here’s how it took shape.

Make Something Easier: The problem with using open source software was the process of downloading, making changes, and then actually seeing them used.

Essentially, it was the entire process that was broken. Creating a hub for git repositories that could easily be worked on and shared was the answer (namely GitHub).

Let It Ride: With developers loving the now easier (but not perfect) way to develop open source, it became a place that offered many new programs.

This supply led to those seeking (demand) and you had a rapid growth process that would eventually be a full audience of people developing solutions and others who needed them.

Making Money: Startups that offer a freemium model often times run into trouble getting users to pay for premium memberships. GitHub had a natural solution come to them. Businesses and other developers wanted a private repository and were willing to pay for it.

This structure created an entirely different membership that the company could charge to use.

Open Popularity: Since open source software is a huge deal, GitHub was in the perfect place to become the poster child of a movement. This position was in some ways deliberate, but in all ways has led to crazy user gains.

Fast Delivery: GitHub doesn’t linger on new features. The developers find a way to deliver things quickly and then work to improve it after feedback. This quality has led to continued growth and loyalty from existing users.

case study strategy growth

Growth Marketing Case Study #14: Upworthy

While Upworthy may not be a SaaS app, or other type of software tool, its story is just as grandiose.

Scrolling through your Facebook feed you’ve seen posts from this popular viral site (or others who are emulating their success).

Endearing stories, funny videos, or multitudes of other entertaining posts are created to influence social users to visit the site.

Shortly after their launch (in 2012), Upworthy was seeing traffic to the tune of almost 90 million visitors a month (by November 2013).

Here’s how they did it.

Fast Changes: Originally, Upworthy wanted to capitalize on an election year and cover mainly political topics.

The team quickly realized that this material wasn’t getting them the traction that they needed, and switched to other topics that were already popular.

Strictly Wants: Instead of providing a need, Upworthy provides the types of content that people seem to naturally gravitate toward. Instead of text based articles, they concentrate on visual content that speaks to human emotions and behaviors.

Solid Formula: While they can’t bottle virality, they sure are good at it. Their success has come from a solid formula of curating content from around the web as well as a proprietary system of editing and evaluating it.

It essentially comes down to using data to find the content, tweaking (again by using the data), and analyzing it after it’s published (creating more data to use).

Conversions: Without a steady base of social traffic, the site wouldn’t have nearly as many visitors. To gain a steady increase of likes and followers, the team has had to A/B test various methods. These experiments have led the site’s facebook page to nearly 5 million likes since launch.

Emotions Driven: Since the click is performed by a human and the content isn’t a need, emotions play a major role in getting a visitor to the site.

The need to compel leads to tests of material, but more importantly headlines.

The click is the most important aspect so those few words that are shown are the most vital aspect (along with the image).

Future Growth: With mobile being the future, the brand has made changes to make mobile users just as click happy. In addition to mobile, the international market is ripe, but needs different forms of content and more testing is needed to see the growth already achieved in the states.

case study strategy growth

Growth Marketing Case Study #15: HubSpot

Unless you’ve been under a rock over the past few years, you’ve heard the term “inbound marketing”.

You can thank HubSpot for that. On top of crafting a new term, they’ve become a billion dollar company.

Their story is great for those who have high dollar products, but still want to see rapid growth.

With each client bringing in an average of over $6000, they’ve managed to see incredible gains in a short time.

Here’s how.

Inbound Marketing: It’s no surprise that HubSpot practices what it preaches and uses inbound as an incredible source of growth.

Having multiple blogs (that provide intense levels of value) and a great overall compelling online presence, has given them a ton of success (and continues to do so).

Free Stuff: There are few other sources online (at least for marketing) where you can find so much value completely for free.

Guides, courses, templates, you name it and it’s there. One of their most successful drivers is the free website grader (it search 4 million sites in five years).

Tailored CTA: HubSpot offers multiple types of content (as mentioned), but if you read a blog post, your offer is going to be catered to that topic. Most B2B companies have one guide, whitepaper or resource for their ideal clients.

HubSpot continues their content marketing with content specific calls to action which increases conversions (and growth).

Webinars: Early adopters in the webinar game, HubSpot was able to tap into internet savvy companies and give them free tips in an online presentation.

Webinars are a key proponent of their social growth as well as the overall success of their brand.

case study strategy growth

Growth Marketing Case Study #16: Evernote

If your company is fledging or even on the brink of shutting down, maybe you can derive a little inspiration from Evernote.

After almost closing their virtual doors, they’ve went on to gain 75 million users and a lot of VC attention (now 225 million).

They had to start somewhere and so do you, so let’s see what factors led to their success.

Surviving Trouble: Evernote was born in the midst of a world of social and new websites (not apps). This early trouble led them to only have a few weeks worth of funds in their accounts at any one time.

Fortunately, a lone user loved the product and at the last available minute wired enough funds to keep them going.

Good and Bad Timing: Evernote launched in the modern app era (2008). There were millions of users ready to download, and not a whole lot of other apps which helped early growth.

The team would also work hard to be in the new app stores on the first day opened. The funding factor wasn’t as good with the economic situation being so awful.

Useful and Impressive: Evernote desired to create an app that could act as your memory, storing anything of any size from anywhere.

On top of that, they wanted an interface that was easy to use, functional and enjoyable. Making something useful and easy are always key metrics for growth.

Freemium: One of the early adopters of the freemium model, Evernote used a basic free version of the app to entice new users.

The genuine usefulness of the product has led to a financial success to the tune of a billion dollar valuation. The value of the product increases with use, and so can the revenue.

Brand Ambassadors: Many companies hope to create advocates for their brand, but Evernote does it. Naming a select few from prominent industries as ambassadors for the app has led to incredible word of mouth and user success.

Meetups are held where the ambassador answers questions and shares the usefulness of the product in that particular field.

Continuous Improvement: In an effort to keep growth levels, Evernote has continuously put out new features and entire apps that make their initial success more useful. Every new product or acquisition has the same goal: to be useful, and beautifully functional which in the end can sell itself (with a little testing).

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Growth Marketing Case Study #17: SnapChat

Sometimes your products aren’t used the way you intended and it can lead to problems.

The Snapchat founders understand that, but it didn’t lead to their growth stalling.

In fact, the popular picture/video sharing app has went from starting in 2011 to now having about 300 million users.

Provide Freedom: So often many young people feel the need for expression that can’t be obtained on most social channels. SnapChat offers users the ability to post a very expressive product that is live in real time with no lasting ramifications.

The freedom that comes from the ability to just hop on and share a moment (that won’t last) is a compelling feature that drives both engagement and growth.

Controversial Growth: Meant for colleges, the app found its start in high schools. It seems teenagers were attracted to the idea of messages that could be shared with friends and not be seen by anyone else (and no evidence).

However, the app received negative (potentially unwarranted) early press centered around the new “sexting” phenomenon. Growth continued.

Competitive Help: Facebook saw the popularity of Snapchat as a threat and created their own similar app (called Poke). The attention only gave more fuel to SnapChat’s popularity sending their growth even higher while Poke declined.

Natural Engagement: Due to the nature of the app, messages sent between users are rarely unopened. The wonder of what could be inside makes most open the messages they receive and compels them to send their own. This engagement also creates an excellent word of mouth.

Social Acceptance: More recently, heavy hitters in the online community (namely Gary Vaynerchuck among others) have begun to adopt the platform. This popularity has online audiences running to the platform and sure to equal growth.

case study strategy growth

Growth Marketing Case Study #18: Uber

Continued growth on an exponential level is a rare thing when it comes to billion dollar brands.

Uber continues to amaze, more than doubling growth year after year even after they boast a $63 billion market cap.

Not to mention they’ve done all of this since 2009 starting out as a small local service.

Let’s take a brief look at how they accomplished so much.

Monopoly Buster: Cabs are terrible. Uber fixes that problem. While it’s not perfect, this new transportation method has become the very face of modern business disruption.

The added bonus of shaking an industry is not only the joy of being useful, but the media attention (negative and positive) that further fuels growth.

Strategic Launch: If you’re going to provide a service, it’s best to give it to those with platforms. Choosing San Francisco to be the first Uber city was a strategic choice.

A place of notoriously bad taxis and people who loved new technology and had blogs and audiences of their own (people like Tim Ferris).

Driver Love: Obviously, the travel brings the revenue. However, Uber understands that they are a liaison service between two parties (one being the driver). With better pay and putting laid off drivers back to work they created instants advocates in each new city.

Focused Launches: Each city isn’t just an expansion for Uber, it’s a new place to dominate. Taking each new location seriously has led to continued growth.

This tactic doesn’t mean slow growth, they have expanded rapidly as well as meticulously across the globe.

Testimonials: Word of mouth is still one of the biggest growth drivers in the world, but Uber gets it from those who have used their service. By someone sharing their experience with someone else (a testimonial) it becomes even more compelling.

Uber also gives free rides to have more and more people telling their story.

Creating Wow: Uber loves testing different experiences for their customers. Trying to ever improve the ride has led to some great experiments and an almost guaranteed good time across town (which creates more testimonial situations).

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Growth Marketing Case Study #19: Belly

Everyone hates it when customers leave. The average churn rate of a company can destroy growth.

Belly Card started out to help small and medium sized businesses increase the retention rate of clients.

A unique business model that isn’t well known, but has over 1 million users and 5000 business clients.

The neatest part about them, is that it all happened in about 15 months!

Market Research: A key driver to growth is starting with something valuable. A lot of times it’s a hunch from a founder, but not in the case of Belly. The team hit the pavement and talked with hundreds of merchants to figure out how to improve customer loyalty for local businesses.

Getting It In: After creating the product to help, they got to work. Selling in person, on the phone, and other “traditional” methods helped get them their early traction and user base. Belly worked Chicago until people and merchants were talking about their service.

City by City: With a few successful city launches under their belt, the Belly team was able to roll out that strategy in new cities with the same success. Soon after, the word of mouth took off as users and merchants loved the engaging elements (gamification) that the product provided.

Selling by Data: While national chains of independent owners are a lucrative market, selling the owners equals a slowed rate of growth and selling to the chain may not be as effective either.

However, Belly was able to take the data of the independent owners that were already using the programs (places like Subways and Chic-Fil-A’s) to entice the chains to use the service.

This process would increase sales for Belly and (in most cases) chains/franchisors as well as garner loyalty for the owners themselves (win-win-win).

case study strategy growth

Growth Marketing Case Study #20: Square

Software companies can be one of the most attractive-looking ventures, but Square was able to do something different.

The company applied a payment processing company behind an attractive and conversation-starting trend centered around their hardware.

The growth is amazing, from starting in 2009 to being one of the most popular small business payment processors with more than 8000 employees.

Here’s a quick look at how they gained traction.

Needed Change: Square makes it possible for anyone to take credit payments. With the hardware (see next point), it had never been easier for small businesses to take multiple forms of payments and sell more stuff.

Whether it would be at flea markets, or in their home office everyone could take credit. Something that was needed and wanted and that created an environment for growth.

Physical Hardware: One of the most revolutionary things about Square is the invention of it’s iconic credit card processing hardware. It’s simple, easy and opens up credit payments to a world of entrepreneurs and business owners.

The company is still doing this with iPad integrations and register POS systems today. The wow factor and talking points definitely helped them with early traction.

Happy Customers: In addition to small business owners getting an easy way to take multiple forms of payments, they like it for other reasons too. Not only is the product useful, but incredibly attractive and hip.

Business owners often know others like them, fueling the number of people who are using the new device (and the processor of course).

Founder Foundation: Jack Dorsey (also cofounded Twitter) was an obvious piece to the early growth of the platform. It wasn’t just his name, but his approach. He wrote a list of those who may be interested in funding the startup.

The list laid out 140 reasons why the company may fail as well as their counterpoints. The gimmick worked and it has garnered significant investment and popularity.

case study strategy growth

Growth Marketing Case Study #21: Canva

Back in the day, if you needed to come up with a flyer, a banner, or any design and you weren’t a designer, you had two options.

You could hire a designer or you could go through the painful process of doing it yourself on PowerPoint, or worse, use Word art.

Today you have Canva, which completely revolutionized basic graphic design for the average person.

Here’s how they’re growing.

Making it easy for everyone: There have always been other options for creating quick designs. But they had several shortcomings either in the way of UI, price, or ease of use. And these were the main things that Canva focused on since it launched.

The user interface was intuitive and had usable templates. It was web-based, so there was no need to download and install the software.

And most importantly, the free version was useful. So it was no surprise that Canva quickly became the de facto tool for anyone looking to do some quick design tasks.

Simple Pricing combined with a clear value proposition: An important aspect of Canva is that it made it easy for its users to choose to upgrade to the paid version.

The free version served the purpose of letting first-time users familiarize themselves with the platform until it became a part of their workflow. When that happened, it was a simple choice for users to upgrade to the paid version for additional features.

Also worth mentioning is that compared to their competition at the time, their pricing was in a goldilocks area for their key users.

From 0 to 15 million users: Canva’s first two years saw an impressive amount of growth. They went from 0 to 2 million monthly users.

And after seven years, they reached 15 million users, 300 thousand pro users, and are now a 3.2 billion-dollar company. To reach this massive amount of growth, they went about it with the tried and true formula of having a great product match for their audience and consistently investing in paid ads across the usual social media channels.

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Growth Marketing Case Study #22: Airbnb

The word disruption is used fairly loosely nowadays. But in reality, very few businesses disrupt an industry.

Airbnb is one of the few which have. And in doing so, they grew from a three-person operation making a couple of hundred bucks a week to now reporting over 1 billion in quarterly revenue.

Today, Airbnb is a 35 billion dollar behemoth with hundreds of employees and a global presence.

Here are 6 takeaways on how Airbnb grew its business.

  • Test your idea and iterate. Initially, the founders tried to make extra money by renting a spare air mattress. They took the same concept and iterated until they found the winning formula.
  • They focused on finding what the bottleneck to their growth was. At first, it was about the images of the properties; later on, it became payment processing. As they kept on growing, new growth problems were solved.
  • They bootstrapped and started small. Many new businesses want to immediately get funding to accelerate their growth. This is not necessarily wrong. However, AirBnb already was bringing in profits and had a working product by the time they took on venture capital. This made it significantly easier for them to raise capital and acquire investors.
  • They took over the industry by being themselves. Airbnb didn’t set out to compete with hotels directly. In the beginning, they offered a more affordable option for travelers, but what really set them apart was the fact that they were selling the experience of living in the place you were visiting instead of being a tourist as you would be with a traditional hotel.
  • They take care of their customers. One of the critical aspects of Airbnb is how the platform takes care of all its users. Airbnb offers a big insurance policy to their hosts so that they can have the confidence to rent out their properties.
  • Upsells and cross-sells have become a major source of revenue. Instead of limiting themselves, they decided to listen to their customers and incentivize their hosts to offer additional services that would help them increase their income. A win, win, win type of deal.

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Growth Marketing Case Study #23: Koala

In 2015, Koala made waves as one of the most successful businesses to launch in the recently created direct-to-consumer mattress space.

It quickly grew up to $13 million in sales in its first 12 months of operating.

During their first year, the team behind Koala did something that let them accelerate their growth. They had a laser focus on the digital marketing channels that brought them the most results.

Here’s a brief breakdown of how they went about strategizing their growth.

Have a great product and an amazing offer: To start off, Koala launched with a great product that was highly competitive compared with the traditional market. But what set them apart was the quality of the offer.

The offer was miles ahead of what their competition had at the moment. This is where free delivery, pickup, and a 120 free trial with no strings attached set them apart.

This amount of confidence in their product helped with making it easier for new customers to choose the new and innovative mattress company.

Laser-focus on what works: During their first year, Koala approached their marketing with a laser focus on one marketing channel: Facebook.

Instead of spreading themselves thin by diluting their budget across multiple channels, they decided to concentrate their efforts on dominating their chosen platform.

They did this by investing heavily in creating exciting and eye-catching ads and making the most out of Facebook’s retargeting capabilities.

This is why if you spent any amount of time browsing Facebook back in 2015, you probably came across an ad or two from Koala.

Make it easy for your customers to talk about you: The direct-to-consumer mattress business was still new and didn’t have widespread adoption back in 2015.

To address the novelty aspect of their business model, they relied heavily on having established processes that made it easy for their new customer to share their experiences.

Customer testimonials make a huge amount of difference for new businesses. They essentially shorten the amount of time needed for a new customer that is still on the fence about whether or not they want to try a new product.

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Growth Marketing Case Study #24: Hip Kids

Hip Kids is a children’s toy company that carved out a niche for itself by offering a more high-quality and durable alternative to the primarily disposable toys that are commonplace in the market.

This singular attention to detail and alignment to their core values helped them take their company to the 7-figure mark in sales.

But they reached a point where, even though they had a healthy marketing budget, they just weren’t seeing the growth they expected.

This is what they did to triple the revenue and spur growth for their already well-established brand.

Define the root cause of the problem: To understand the root cause of the problem, a little context is necessary.

HipKids started as an eBay store about a decade ago. They started small, and as the demand for their products grew, they were able to open up their own website and even open up a few physical locations for their brand.

Due to their organic growth, they added additional pieces to their marketing one at a time, and often from different agencies.

First they did their website, then they added an in-house designer, then they went with a PPC agency to get targeted traffic, and finally, they also invested in their SEO.

As you can imagine, after investing in each new marketing channel, they saw an initial spur of growth that quickly stagnated. It was this fragmented approach to their marketing strategy that made it difficult for their campaigns to work in unison and build up the momentum they needed to reach their growth goals.

Efficiency and optimization are key: Once the problem was defined, it became a matter of restructuring their marketing team to make sure that it was all moving in the same direction.

With a brand new marketing structure set in place, then it was possible for the marketing team to work on optimizing their campaigns and iterating over time to attract new traffic and improve conversion rates. This is what ultimately let HipKids triple its revenue.

case study strategy growth

Growth Marketing Case Study #25: Dropbox

Dropbox has spent very little on advertising but has grown the company to $4 billion. This article shares some of Dropbox’s top techniques, specifically through word of mouth.

A decade ago, the internet was very different. To start off, it was much slower. The average download speed was only 5 Mbps.

Today, you’ll often find speeds 20x faster just about anywhere, even on mobile phones.

Due to these limitations, sharing and storing large files on the cloud was challenging and often expensive.

Cloud storage was mostly directed to businesses, and the consumer-level solutions available were clunky and unfriendly to the average user.

That is until Dropbox entered the market.

Tried and true old-school tactics: Even though Dropbox is a huge SAAS, it’s interesting to know that its initial growth did not rely on advertising of any form.

They went to the old school method of using word of mouth from their customers to reach the growth they were after.

The most valuable resource back then was storage space. So they gave out storage space to their existing customers so that they could motivate them to share their experiences with Dropbox.

This approach worked wonders, and Dropbox’s revenue quickly exceeded the $100 million mark.

Make it easy for your users: Dropbox wasn’t the first or only consumer-level cloud storage option in the market. But it was by far the easiest. Most of their competition, even those that were in the market before them, had cumbersome interfaces and poor customer support which made it difficult for users to sign up for their services.

Most of them had ads on their signup pages, so yes, it was ugly.

Dropbox, on the other hand, had a clean signup page that made it easy for users to sign up. Nothing unnecessary, and no ads were found on the signup page.

Incentivize sharing on social media: Back in 2011, social media reach was very effective in driving traffic. So to take advantage of this, Dropbox incentivized social media shares with free space. This worked out to be the perfect complement to their referral strategy. It decreased the friction in sharing and made it highly attractive for their existing users to become brand ambassadors.

case study strategy growth

Growth Marketing Case Study #26: Dollar Shave Club

The marketing behind razors, up until the launch of DSC, was pretty consistent. Every “new” razor offered the exact same thing, a better way to shave.

And it worked to some extent because razors are an everyday product for a lot of people.

They just ended up buying them the same way they had always done.

Dollar Shave Club didn’t innovate the product they sold. Their product is, albeit high quality, just about the same as everything else in the market.

So why did they become so popular? Because they innovated the experience.

Make your marketing fun and memorable: Dollar Shave Club’s initial marketing was nothing short of genius. It was fun, and it was memorable. It was a welcome departure from the idealized and mostly non-relatable approach that the traditional brands had embraced decades ago.

This more honest, down-to-earth, and witty approach gave them something that the other brands didn’t have. It gave them a relatable personality.

And the consistency of their personality across every aspect of their brand made them feel reassuringly consistent and was enough to help them differentiate themselves from the rest of their competitors.

Create an experience: Since innovation on the product side of things wasn’t much of an option, they decided to innovate on their customer’s experience.

The first hint of this is in their name. Dollar shave club is exactly what they are. They’re a club, something you can be a part of.

And this feeling of inclusion and community, paired with the direct-to-consumer model, made the experience of getting your razors from Dollar Shave Club highly attractive.

Get customers for life: One of the biggest drivers of growth behind DCS is that they have an incredibly long ratio of lifelong customers. Simply put, their business model makes it easy for their customers to want to keep on buying from them.

It’s a simple and straightforward subscription model that most users can get on board with.

This is what ultimately helped them reach a $615 million dollar valuation and ultimately be bought out by Unilever for $1 billion in 2015.

case study strategy growth

Growth Marketing Case Study #27: Casper

Casper is one of the best examples of how changing and improving the customer experience can revolutionize a segment.

Before Casper, if you were in the market for a new bed, you had to go to a physical location and well put up with being sold to.

That’s one of the reasons why so many people put up with an uncomfortable mattress.

The physical pain of a bad mattress wasn’t as bad as the pain of having to deal with the pain of going through all the hoops of buying a new mattress.

Casper changed this and led the way to a new trend of direct-to-consumer mattresses that revolutionized the entire sleep industry.

Understand your customer’s true pain: The traditional dealer-distributor model that has been in place for years made it so that buying a mattress was a less than pleasant experience for most customers.

It’s a model where salespeople were incentivized to sell but, unfortunately, got the reputation of using sleazy sales tactics.

Casper understood that this was the real reason why people wouldn’t buy a new mattress. They just didn’t want to go through that process, even though their old mattress was uncomfortable and even caused them health problems.

Casper gave its customers a much more viable alternative and had a high-quality product that their customers would be willing to try out.

Address all your customer’s concerns: One of the main challenges was to change the customer’s perception that they had to try-before-they-buy a mattress.

They tackled this head-on by offering an incredibly bold satisfaction guarantee and by providing plenty of educational content on their products so that customers could feel confident in their buying decision.

Then they followed up their product with SEO content centered around sleep and how it impacted health so that they could further establish themselves as sleep experts and gain their customer’s trust.

Leverage customer reviews: Casper did a great job at leveraging its customer reviews. They made it one of the central aspects of their retargeting and email marketing campaigns. Customer reviews are powerful tools since they provide a seemingly unbiased perspective of your product.

case study strategy growth

Growth Marketing Case Study #28: Groupon

Everyone loves a great deal. It’s a simple concept, and Groupon leveraged it to go from zero to having a $12.7 billion IPO.

Equally impressive as their valuation is the rate at which they were growing on a yearly basis. To reach this huge amount of sustainable growth, they relied on a few tried and true growth tactics.

These tactics are so effective that you’ll see that several other businesses in this article followed them to great success.

This means that you don’t necessarily need to reinvent the wheel but rather spend your energy on making it turn as fast as possible.

Make sharing easy: Groupon is, at its core, a social platform. And as such, it makes it very easy to be social. Groupon has always made it easy for its users to share the deals that they are interested in.

It incentivizes it because if not enough deals are taken, the deal won’t be available. So it adds an element of scarcity and perceived exclusivity.

So when FOMO kicks in, Groupon users become highly motivated to share on their social channels and increase the likelihood of their deals coming to fruition.

This, in turn, has the benefit of making sure the Groupon brand is consistently shared.

Email is still very powerful: For some reason, there’s always someone stating that email is dead. That inboxes are too cluttered and that no one pays attention to them anymore. This couldn’t be further from the truth, and Groupon knows this. This is why they have made email a key part of their marketing.

It’s important to understand that if someone voluntarily signs up for your emails, then they are giving permission to reach out to them.

Groupon makes the most out of this by sending daily emails with highly valuable content.

Copywriting makes a big difference: The quality of how you communicate with your customers makes a big difference in how effectively you can retain their attention. Groupon learned this early on and has characterized itself by sending interesting and fun-to-read emails.

It’s important to remember that nobody likes boring and bland content. Your customers will read what you have to say, but only if it’s well written and grabs their attention.

case study strategy growth

Growth Marketing Case Study #29: Porch.com

The home improvement market is enormous. It’s $500 billion and continues to grow at a steady rate.

So it was only a matter of time until a startup would try to revolutionize a market that had historically lacked innovation.

Enter the Seattle-based Porch.com. In 2013 porch set out to become the “Uber” of home improvement projects by helping connect construction professionals with homeowners that needed help in completing their tasks.

Amongst its achievements, Porch.com can mention:

  • 300000 active professionals across the US.
  • Nasdaq IPO in the year 2020.
  • They reach approximately 66% of the homeowner market.

However, back in 2018, before they went public, their growth had started to plateau. Something had to be done. So they made a concentrated effort to improve their search engine visibility so that they could get a more sustainable and cost-efficient source of traffic. To achieve this goal, they went with the tried and true strategy of increasing their backlinks.

Link building can be transformative for your traffic: The reason why link building was chosen is that since they had started to rely on paid advertising for their lead acquisition, their cost per lead had started to increase.

This rise in cost per lead was eating into their profit margins, so from an ROI perspective, investing in cultivating high-quality backlinks was a good strategy to follow.

Porch’s marketing was able to obtain over 931 backlinks from unique domains throughout the year. This helped them make a significant boost in their organic traffic and helped decrease the total cost of their lead acquisition.

Here are some of the growth strategies they followed:

  • They didn’t limit themselves to home renovation topics but rather created content across a broad range of related topics to expand the number of high-quality websites they could be relevant to.
  • This broad range of content helped them land mention on television and local radio across several major cities.
  • Some of the results generated by the campaign were 257 mentions from relevant publishers, 180 regional media mentions, and over 38000 social shares.

[…] If you want real-life examples of what other companies have done, take a look at these growth marketing case studies. […]

[…] can also find more examples and ideas in our growth marketing case studies […]

[…] You can find real-world examples in our list of growth marketing case studies. […]

[…] You can discover a variety of strategies and tactics in this guide to growth marketing case studies. […]

[…] You can discover more growth marketing case studies here. […]

[…] are more ideas, strategies and tactics in this article on growth marketing case studies, […]

Growth is a process, stop improvising .

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Aldi’s Generic Competitive Strategy & Growth Strategies

Aldi generic competitive strategy, intensive growth strategies, competitive advantages, Porter, Ansoff, retail business analysis case study

Aldi’s competitive strategy involves cost-based advantages that enable retail business growth strategies. The discount supermarket chain continues to grow internationally despite strong competitors and market saturation. This generic competitive strategy and the intensive growth strategies help bring the goals of Aldi’s vision statement and mission statement to fruition. For example, the company’s competitive advantages and revenue growth strengthen capabilities for reaching strategic goals for retail business success. While Aldi faces competitive challenges, its generic strategy maintains competitive advantages for attracting target customers and ensuring profitable operations despite low selling prices. Aldi’s growth strategies aim for a stronger market presence and higher sales figures based on a larger market share.

Based on Michael E. Porter’s generic strategies for competitive advantage, Aldi focuses on cost as a defining factor in doing business. The company’s brand image and merchandise prices depend on this competitive strategy. Based on Igor Ansoff’s matrix of intensive growth strategies, Aldi focuses on attaining a larger share of its target markets. The company’s expansion depends on these growth strategies for its multinational retail business.

Aldi’s Generic Competitive Strategy

Aldi’s competitive strategy is cost leadership , which translates to low business costs and the ability to offer low and competitive selling prices. In Michael E. Porter’s model, this generic competitive strategy requires that the discount supermarket chain maintain low operating costs. Competitive advantages based on low business costs mean that Aldi’s generic strategy ensures competitiveness against other retailers, including Lidl, Whole Foods , Costco , Walmart , and Amazon ’s e-commerce and brick-and-mortar stores. This competitive strategy also helps deter Home Depot , which is not a direct competitor, from diversifying to offer food products through new business operations similar to Aldi’s.

Aldi’s business model involves low costs that support low prices for private-label products that are alternatives to many mainstream brands that are more expensive. With cost leadership as a generic competitive strategy, cost-effective operations lead to competitive advantages, including the business strengths described in the SWOT analysis of Aldi . These strengths empower the company, especially in competing with big-box retailers that offer low prices. The Five Forces analysis of Aldi depicts a highly competitive market where effective cost leadership as a competitive strategy can support long-term business growth and success. This generic competitive strategy determines cost limits and the productivity and process efficiency targets in Aldi’s operations management.

Aldi’s Growth Strategies

Aldi’s primary growth strategy is market penetration involving additional stores, such as the ones in the United States. In Igor Ansoff’s matrix, this intensive growth strategy has the goal of generating more sales revenues from the same target customers in the company’s current retail markets. For example, adding new grocery stores in the U.S. can increase Aldi’s revenues and grow the business. Also, the company can sell more merchandise to the same customers through enhanced marketing and related strategies. Aldi’s marketing mix (4P) reflects business efforts in implementing this intensive growth strategy. New store locations based on market penetration as a growth strategy can lead to changes in Aldi’s business structure (company structure) , especially geographic divisions for operations in various markets.

Aldi also relies on product development as an intensive growth strategy, although to a limited extent. This strategy aims to grow the retail business through new products for more sales. For example, Aldi introduces private-label products whose close alternatives are difficult to find elsewhere. Through this growth strategy, the company attracts buyers to its stores. External factors, like the ones described in the PESTLE/PESTEL analysis of Aldi , inform decisions about the kinds and characteristics of new products to develop in implementing this intensive growth strategy.

  • Aldi History .
  • Aldi’s Products .
  • America’s Low-Price Leader ALDI Expands Footprint Nationwide with 800 New Stores by the End of 2028 .
  • Gupta, A., Pachar, N., Jain, A., Govindan, K., & Jha, P. C. (2023). Resource reallocation strategies for sustainable efficiency improvement of retail chains. Journal of Retailing and Consumer Services, 73 , 103309.
  • Leppänen, P., George, G., & Alexy, O. (2023). When do novel business models lead to high performance? A configurational approach to value drivers, competitive strategy, and firm environment. Academy of Management Journal, 66 (1), 164-194.
  • Copyright by Panmore Institute - All rights reserved.
  • This article may not be reproduced, distributed, or mirrored without written permission from Panmore Institute and its author/s.
  • Educators, Researchers, and Students: You are permitted to quote or paraphrase parts of this article (not the entire article) for educational or research purposes, as long as the article is properly cited and referenced together with its URL/link.

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HBS Case Selections

case study strategy growth

OpenAI: Idealism Meets Capitalism

  • Shikhar Ghosh
  • Shweta Bagai

Generative AI and the Future of Work

  • Christopher Stanton
  • Matt Higgins

Copilot(s): Generative AI at Microsoft and GitHub

  • Frank Nagle
  • Shane Greenstein
  • Maria P. Roche
  • Nataliya Langburd Wright
  • Sarah Mehta

Innovation at Moog Inc.

  • Brian J. Hall
  • Ashley V. Whillans
  • Davis Heniford
  • Dominika Randle
  • Caroline Witten

Innovation at Google Ads: The Sales Acceleration and Innovation Labs (SAIL) (A)

  • Linda A. Hill
  • Emily Tedards

Juan Valdez: Innovation in Caffeination

  • Michael I. Norton
  • Jeremy Dann

UGG Steps into the Metaverse

  • Shunyuan Zhang
  • Sharon Joseph
  • Sunil Gupta
  • Julia Kelley

Metaverse Wars

  • David B. Yoffie

Roblox: Virtual Commerce in the Metaverse

  • Ayelet Israeli
  • Nicole Tempest Keller

Timnit Gebru: "SILENCED No More" on AI Bias and The Harms of Large Language Models

  • Tsedal Neeley
  • Stefani Ruper

Hugging Face: Serving AI on a Platform

  • Kerry Herman
  • Sarah Gulick

SmartOne: Building an AI Data Business

  • Karim R. Lakhani
  • Pippa Tubman Armerding
  • Gamze Yucaoglu
  • Fares Khrais

Honeywell and the Great Recession (A)

  • Sandra J. Sucher
  • Susan Winterberg

Target: Responding to the Recession

  • Ranjay Gulati
  • Catherine Ross
  • Richard S. Ruback
  • Royce Yudkoff

Hometown Foods: Changing Price Amid Inflation

  • Julian De Freitas
  • Jeremy Yang
  • Das Narayandas

Elon Musk's Big Bets

  • Eric Baldwin

Elon Musk: Balancing Purpose and Risk

Tesla's ceo compensation plan.

  • Krishna G. Palepu
  • John R. Wells
  • Gabriel Ellsworth

China Rapid Finance: The Collapse of China's P2P Lending Industry

  • William C. Kirby
  • Bonnie Yining Cao
  • John P. McHugh

Forbidden City: Launching a Craft Beer in China

  • Christopher A. Bartlett
  • Carole Carlson

Booking.com

  • Stefan Thomke
  • Daniela Beyersdorfer

Innovation at Uber: The Launch of Express POOL

  • Chiara Farronato
  • Alan MacCormack

Racial Discrimination on Airbnb (A)

  • Michael Luca
  • Scott Stern
  • Hyunjin Kim

Unilever's Response to the Future of Work

  • William R. Kerr
  • Emilie Billaud
  • Mette Fuglsang Hjortshoej

AT&T, Retraining, and the Workforce of Tomorrow

  • Joseph B. Fuller
  • Carl Kreitzberg

Leading Change in Talent at L'Oreal

  • Lakshmi Ramarajan
  • Vincent Dessain
  • Emer Moloney
  • William W. George
  • Andrew N. McLean

Eve Hall: The African American Investment Fund in Milwaukee

  • Steven S. Rogers
  • Alterrell Mills

United Housing - Otis Gates

  • Mercer Cook

The Home Depot: Leadership in Crisis Management

  • Herman B. Leonard
  • Marc J. Epstein
  • Melissa Tritter

The Great East Japan Earthquake (B): Fast Retailing Group's Response

  • Hirotaka Takeuchi
  • Kenichi Nonomura
  • Dena Neuenschwander
  • Meghan Ricci
  • Kate Schoch
  • Sergey Vartanov

Insurer of Last Resort?: The Federal Financial Response to September 11

  • David A. Moss
  • Sarah Brennan

Under Armour

  • Rory McDonald
  • Clayton M. Christensen
  • Daniel West
  • Jonathan E. Palmer
  • Tonia Junker

Hunley, Inc.: Casting for Growth

  • John A. Quelch
  • James T. Kindley

Bitfury: Blockchain for Government

  • Mitchell B. Weiss
  • Elena Corsi

Deutsche Bank: Pursuing Blockchain Opportunities (A)

  • Lynda M. Applegate
  • Christoph Muller-Bloch

Maersk: Betting on Blockchain

  • Scott Johnson

Yum! Brands

  • Jordan Siegel
  • Christopher Poliquin

Bharti Airtel in Africa

  • Tanya Bijlani

Li & Fung 2012

  • F. Warren McFarlan
  • Michael Shih-ta Chen
  • Keith Chi-ho Wong

Sony and the JK Wedding Dance

  • John Deighton
  • Leora Kornfeld

United Breaks Guitars

David dao on united airlines.

  • Benjamin Edelman
  • Jenny Sanford

Marketing Reading: Digital Marketing

  • Joseph Davin

Social Strategy at Nike

  • Mikolaj Jan Piskorski
  • Ryan Johnson

The Tate's Digital Transformation

Social strategy at american express, mellon financial and the bank of new york.

  • Carliss Y. Baldwin
  • Ryan D. Taliaferro

The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire?

  • Juan Alcacer
  • David J. Collis

Dow's Bid for Rohm and Haas

  • Benjamin C. Esty

Finance Reading: The Mergers and Acquisitions Process

  • John Coates

Apple: Privacy vs. Safety? (A)

  • Henry W. McGee
  • Nien-he Hsieh
  • Sarah McAra

Sidewalk Labs: Privacy in a City Built from the Internet Up

  • Leslie K. John

Data Breach at Equifax

  • Suraj Srinivasan
  • Quinn Pitcher
  • Jonah S. Goldberg

Apple's Core

  • Noam Wasserman

Design Thinking and Innovation at Apple

  • Barbara Feinberg

Apple Inc. in 2012

  • Penelope Rossano

Iz-Lynn Chan at Far East Organization (Abridged)

  • Anthony J. Mayo
  • Dana M. Teppert

Barbara Norris: Leading Change in the General Surgery Unit

  • Boris Groysberg
  • Nitin Nohria
  • Deborah Bell

Adobe Systems: Working Towards a "Suite" Release (A)

  • David A. Thomas
  • Lauren Barley

Home Nursing of North Carolina

Castronics, llc, gemini investors, angie's list: ratings pioneer turns 20.

  • Robert J. Dolan

Basecamp: Pricing

  • Frank V. Cespedes
  • Robb Fitzsimmons

J.C. Penney's "Fair and Square" Pricing Strategy

J.c. penney's 'fair and square' strategy (c): back to the future.

  • Jose B. Alvarez

Osaro: Picking the best path

  • James Palano
  • Bastiane Huang

HubSpot and Motion AI: Chatbot-Enabled CRM

  • Thomas Steenburgh

GROW: Using Artificial Intelligence to Screen Human Intelligence

  • Ethan S. Bernstein
  • Paul D. McKinnon
  • Paul Yarabe

case study strategy growth

Arup: Building the Water Cube

  • Robert G. Eccles
  • Amy C. Edmondson
  • Dilyana Karadzhova

(Re)Building a Global Team: Tariq Khan at Tek

Managing a global team: greg james at sun microsystems, inc. (a).

  • Thomas J. DeLong

Organizational Behavior Reading: Leading Global Teams

Ron ventura at mitchell memorial hospital.

  • Heide Abelli

Anthony Starks at InSiL Therapeutics (A)

  • Gary P. Pisano
  • Vicki L. Sato

Wolfgang Keller at Konigsbrau-TAK (A)

  • John J. Gabarro

case study strategy growth

Midland Energy Resources, Inc.: Cost of Capital

  • Timothy A. Luehrman
  • Joel L. Heilprin

Globalizing the Cost of Capital and Capital Budgeting at AES

  • Mihir A. Desai
  • Doug Schillinger

Cost of Capital at Ameritrade

  • Mark Mitchell
  • Erik Stafford

Finance Reading: Cost of Capital

case study strategy growth

David Neeleman: Flight Path of a Servant Leader (A)

  • Matthew D. Breitfelder

Coach Hurley at St. Anthony High School

  • Scott A. Snook
  • Bradley C. Lawrence

Shapiro Global

  • Michael Brookshire
  • Monica Haugen
  • Michelle Kravetz
  • Sarah Sommer

Kathryn McNeil (A)

  • Joseph L. Badaracco Jr.
  • Jerry Useem

Carol Fishman Cohen: Professional Career Reentry (A)

  • Myra M. Hart
  • Robin J. Ely
  • Susan Wojewoda

Alex Montana at ESH Manufacturing Co.

  • Michael Kernish

Michelle Levene (A)

  • Tiziana Casciaro
  • Victoria W. Winston

John and Andrea Rice: Entrepreneurship and Life

  • Howard H. Stevenson
  • Janet Kraus
  • Shirley M. Spence

Partner Center

case study strategy growth

Humans are reinventing the consumer goods and services industry

In the age of digital commerce, it is hard to predict what consumers will buy – and why, when and where they buy it. To stay ahead of uncertainty, think like a consumer and focus on building strong relationships.

Consumer goods and services now

of consumer goods executives aspire to set a new standard for the industry – or even outside of it

of executives believe consumers are changing faster than they can change their businesses

of consumer goods companies identify the omni-connected consumer as a top priority

of companies are prioritizing integrated business planning over demand-driven inventory supply

How to reinvent consumer goods and services

Deliver winning consumer and customer experiences.

case study strategy growth

Access powerful insights by tapping into data

Drive profitable growth with digital commerce transformation.

case study strategy growth

The generative AI era

Do well by doing good, generate enduring, long-term sustainable value.

By directly involving humans—and their data—in the creation and orchestration of holistic consumer experiences, companies can meet changing consumer demands at the speed of life.

Drive loyalty

Unparalleled consumer relevance and intimacy drives loyalty.

Improve accuracy

Massively reduce risk while improving launch accuracy.

Data is everywhere but remains an untapped resource. Leading CPG’s leverage data and analytics intelligence to seize value creation opportunities.

Innovate and grow

Leverage data to create new product and investment ideas.

Improve consumer engagement

Dig into data to create hyper-personalized marketing content that will boost conversion.

Adoption of digital commerce is both material and ubiquitous for consumers and customers alike. This creates a big opportunity to capture the full potential of a market that’s poised to grow by 56% over the next three years.

Grow consumer and customer lifetime value

Provide differentiated, personalized and consistent experiences across channels that build loyalty.

Build rich insights

Combine business and ESG data across multiple channels and build insights into consumer and customer needs to gain competitive advantage.

Deliver at scale and pace

Build operating model agility by implementing the right commerce infrastructure and operations for efficient orchestration across channels and easy integration of new channels.

Reduce costs

Drive cost reduction, sustainability outcomes, and improved efficiencies by taking an integrated, ethical end to end approach to digital commerce that eliminates inefficiencies and reduces duplication.

Generative AI brings opportunities for CPGs to reinvent across the value chain and transform ways of working.

AI can help capture consumer trends faster and better, fueling new product development.

Boost conversion

Ignite engagement with hyper-personalized content and a consumer-of-one approach.

Unlock people’s potential

Blend process, automation, and real human experience to rethink work structures and craft new roles for new levels of productivity.

Sustainability is a key force for change and drives long-term growth and viability—and it’s good for business. In the future, we will not talk about “sustainable business” sustainability will be “business as usual.”

Save on cost

Outperform on financial returns and improve risk management (for example, soap concentrates are higher-margin and better for the environment).

Deepen relationships

Embracing sustainability translates into improved retention and employee satisfaction, deeper supplier and partner collaboration, and differential brand growth.

Consumers have the power—and they want to see sustainability in every product or purchase option. Rethink processes, technology, and tools with a sustainability lens to reveal holistic value and leapfrog competition.

Less than 20%

Increase productivity.

Rising input costs combined with higher inflation erodes consumer spending and hurts confidence. Enhance SG&A by 15-20% and improve working capital by 10-20% by expanding workforce productivity with end-to-end process transformation.

case study strategy growth

Grow revenue

CPGs are worried about optimizing and managing working capital amid recessionary pressure while maintaining sufficient liquidity to operate. Grow revenue by 1-2% by aligning investment to strategic priorities and future value pools.

Segments we support

From planting to processing and even connected cows, enable the entire food value chain with 5G technology.

Use data and AI to create beautifully connected experiences that meet demand for personalized services.

Design, build, distribute and scale for a sector at the center of society.

Feed changing tastes and deliver delicious, scalable food experiences.

Enable smarter, more connected lives—from personal care and hygiene to home care products and appliances.

What’s trending in consumer goods and services

case study strategy growth

Information overload is impacting people’s confidence in their decisions — big or small.   AI tools can help companies deliver hyper-personalized experiences that cut through the noise, deepening loyalty in the process.

case study strategy growth

Change is here to stay for consumer goods companies, and the pace will only accelerate. Brands need a depth of consumer understanding and an unparalleled agility to move at the speed of life. 

case study strategy growth

Five imperatives the C-suite must address to reinvent in the age of generative AI.

case study strategy growth

Lion, an Australian and New Zealand beverage company, digitally transformed by migrating to AWS, enabling efficiency, agility, sustainable growth, real-time insights, and an enhanced customer experience.

case study strategy growth

Beauty is undergoing fundamental change, driven by consumers seeking science-led products that enhance health and wellness from the inside out. Growth requires a level of reinvention that will ultimately redefine the industry.

case study strategy growth

Gen AI will transform entire value chains—and the very nature of work itself. Leaders need to lead and learn in new ways to drive business performance and more productive, creative and meaningful work for everyone.

case study strategy growth

How resilient consumers are adapting in an era of volatility.

case study strategy growth

Reimagining talent mobility

Partners in change

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Helping you unlock the value of your SAP application portfolio with the power of intelligence, innovation and industry.

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Reimagining human experiences that reignite growth and accelerate the path to value

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The largest global Microsoft practice. Eighteen-time Microsoft Global Alliance SI Partner of the Year. Powered by Avanade. Runs on Microsoft.

Google logo

Unleash empowering human-centric design and Google’s innovative tech.

Adobe logo

Unleash the power of unforgettable customer experiences.

Awards and recognition

Hfs ranks accenture no. 1 tech services provider to retail and consumer packaged goods companies, a leader in digital strategy consulting services - idc, for fourth consecutive year, named a leader in data and analytics services - everest, our leaders.

case study strategy growth

Oliver Wright

Senior Managing Director – Consumer Goods & Services, Global Lead

case study strategy growth

Marc van der Net

Managing Director – Consumer Goods & Services Lead, EMEA

case study strategy growth

Senior Managing Director – Consumer Goods & Services Lead, North America

case study strategy growth

Mauro Rubin

Managing Director – Consumer Goods & Services Lead, Growth Markets

Grow your careers at the heart of change

The secrets of outperforming family-owned businesses: How they create value—and how you can become one

These days, organizations across industries and geographies are doing everything they can to bounce forward from recent economic, geopolitical, and technological disruptions.

For them, resilience may be a relatively new concept.

About the authors

This article is a collaborative effort by Eduardo Asaf, Igor Carvalho, Acha Leke , Francesco Malatesta, and Jose Tellechea, representing views from McKinsey’s Private Equity & Principal Investor’s Practice and its Family-Owned Business Special Initiative.

For family-owned businesses (FOBs)—companies in which founders or descendants hold significant share capital or voting rights—it’s just business as usual. 1 Refers to companies in which the family controls at least 20 percent of owned capital share or voting rights; note that voting rights may be controlling or noncontrolling. Regardless of what the world throws at them, many of these companies have survived and thrived over multiple decades. Some, such as Levi Strauss and L’Óreal, have been operating for well over a century.

FOBs have long played an outsize role in the global economy—a role that often goes unnoticed or underestimated. They account for more than 70 percent of global GDP, and they generate turnover of between $60 trillion and $70 trillion annually. They are responsible for about 60 percent of global employment, and they play a critical role in supporting education, healthcare, and infrastructure development across their communities around the world. 2 "Empowering family businesses to fast-track sustainable development,” United Nations Conference on Trade and Development, April 13, 2021.

McKinsey’s own recent research confirms FOBs’ adaptability, resilience, and impact: they have the structures and best practices required to withstand business challenges in uncertain times. And in general, they exhibit stronger performance than businesses that are not family owned, although the extent and drivers of that outperformance vary (Exhibit 1).

To understand FOBs’ history of outperformance and how the best among them create value and impact, we analyzed 600 publicly listed FOBs, compared their performance with that of 600 publicly listed companies that are not family owned, and surveyed another 600 primarily private FOBs around the world. Additionally, we interviewed leaders of more than 20 FOBs globally.

The findings were surprising.

For instance, while it has been widely known that FOBs deliver higher total shareholder returns (TSR) compared with non-FOBs, the root causes of this outperformance have been less well-known—until now. Our analysis shows that the higher TSR results from better underlying operational performance by FOBs, as compared with non-FOBs. The research also demonstrates how the performance and value creation strategies of FOBs shift as these businesses get bigger and older.

The data tell a compelling story of outcomes and impact, but they also begin to reveal what the highest-performing FOBs are doing differently when compared with peers, in two areas: mindsets and strategic actions.

They demonstrate four mindsets that are common to all FOBs but that take on outsize importance within the high performers, allowing them to gain and sustain a competitive advantage. The critical mindsets are a focus on purpose beyond profits, a long-term view and emphasis on reinvesting in the business, a conservative and cautious stance on finances, and processes that allow for efficient decision making.

The high-performing FOBs then combine these mindsets with five strategic actions in ways that others do not. Specifically, they actively diversify their portfolios, and they dynamically reallocate resources to the most promising businesses, regions, and channels. They are both efficient investors and operators. They maintain a relentless focus on attracting, developing, and retaining talent, and they continually review their governance mechanisms to ensure strong business performance across generations.

We’ll unpack this “4+5” formula further in this article. It’s important to note that the formula and the lessons it imparts are applicable to both FOBs and non-FOBs alike—and our research suggests that deploying it effectively can pay off over the long term. When we applied the formula to the family-owned companies in our research base, we estimated that it could create a 2.5- to 5.5-times increase in economic profit for them.

Indeed, FOBs around the world that successfully follow this formula have an opportunity to quadruple their value over the next five to ten years—bolstering their market performance, sharpening the resilience edge that has allowed them to keep the lights on for generations, and making an even greater impact across their communities.

FOB outperformance by the numbers

Our research shows that FOBs have created more value and impact than non-FOBs over the past decade—a dynamic that has largely held true regardless of which metrics we used to assess companies’ performance and despite the unique challenges FOBs face (see sidebar, “Unique challenges on the road to outperformance”). 3 Non-FOBs are defined as any company that does not meet a 20 percent threshold for family ownership in either share capital or voting rights.

Between 2017 and 2022, FOBs posted an average TSR of 2.6 percent, compared with 2.3 percent for non-FOBs. In that same five-year period, FOBs achieved average economic profit of $77.5 million, surpassing the non-FOBs average economic profit of $66.3 million. 4 Economic profit is the difference between revenue received from the sale of goods and services and the costs of producing those goods and services, including opportunity costs. FOBs also generated (on average) an economic spread that was 33 percent higher than that of non-FOBs in the same period. 5 Economic spread is the difference between a company’s return on invested capital and its weighted average cost of capital.

Unique challenges on the road to outperformance

It’s important to acknowledge the unique challenges that all family-owned businesses (FOBs) face—all the better to appreciate how the very highest-performing FOBs in our research base have managed to ascend.

A cautious approach to finances is a trademark of FOBs that helps them weather economic shocks, although it can also delay their recovery. An aversion to taking on debt, for example, might constrain an FOB’s ability to enact critical process changes, or it could hinder expansion plans.

Additionally, FOBs tend to underinvest in R&D, which can limit innovation and entrepreneurial initiatives. This challenge can be compounded as the business moves further and further away from the founder’s entrepreneurial vision and prioritizes value preservation over high-risk business bets.

Family-owned businesses also face unique governance challenges relating to their ownership. For instance, all FOBs, regardless of size, industry, or regional focus, are confronted with succession-related questions as the business passes from one generation to the next. The founding generation may have been focused on aggressive growth, but subsequent generations may wrestle with maintaining or even transforming the company.

It has been posited that the largest wealth transfer in history will take place over the next 25 years, with an estimated $100 trillion moving from baby boomers to their heirs and charities. 1 The transfer of wealth from boomers to ‘zennials’ will shape the global economy,” Financial Times , August 22, 2023. Inheritors may find themselves grappling with several new challenges, including a changing global order , a push toward sustainable and inclusive investing, and the AI revolution. 2 “ Global flows: The ties that bind in an interconnected world ,” McKinsey Global Institute, November 15, 2022. How they lead through these disruptions will have a lasting impact on their companies, on business generally, and on society.

A broader look at performance among both FOBs and non-FOBs reveals further variations based on the size, age, and maturity level of these companies. For instance, the midsize FOBs in our research base, with annual revenues between $150 million to $5 billion, performed better than non-FOBs by being more efficient investors. They have delivered 10 percent higher capital turnover over the past five years compared with non-FOBs. Why? These midsize FOBs face fewer of the traditional market pressures to deliver short-term results. Their focus on the long term and their streamlined decision-making processes allow them to be more effective than non-FOBs at identifying investment opportunities that are in line with their purpose and goals, acting decisively, and quickly allocating resources against those opportunities.

Meanwhile, the large FOBs in our sample, with annual revenues between $5 billion and $100 billion, tend to be efficient operators that have delivered 1.5-percentage-point higher operating margins over the past five years compared with non-FOBs. The numbers likely reflect large FOBs’ ability to take advantage of process-related efficiencies and supply chain relationships developed over successive generations (Exhibit 2).

In addition, the family-owned businesses in our research base that are 25 years old and younger tend to have an aggressive growth mindset, increasing revenues twice as fast as non-FOBs as they channel the entrepreneurial energy of the founder. As they mature and transition into new generations of leadership, however, some FOBs start thinking less about big bets and more about preserving value. Others just lose the founder’s entrepreneurial edge. Their growth slows, falling more in line with that of non-FOBs (Exhibit 3).

4+5 equals FOB outperformance

Our research also revealed a notable gap in performance among FOBs and non-FOBs on our economic profit power curve , with a performance edge appearing across all quintiles. And the best-performing FOBs fared much better than the best-performing non-FOBs: the top two quintiles show a performance gap three times larger than the average of the lower quintiles. What’s more, the highest-performing FOBs capture the largest share of economic profit and drive outperformance across the entire FOB category (Exhibit 4).

Who are these outperformers? They comprise more than 120 FOBs in our research base, with ages ranging from under a decade to several centuries. They span ten sectors and operate across the world. Their average annual revenues range from $1 billion to $95 billion, with average economic profit of $730 million and average EBITDA margin of 20 percent.

Through our analyses, we learned that these top FOBs display four mindsets that are common to other FOBs but that are more pronounced in the outperformers. And, unlike most other FOBs, the outperformers combine the four critical mindsets with five strategic actions that help them achieve and sustain top-quintile performance that truly differentiates them (Exhibit 5).

Four critical mindsets of outperforming FOBs

Traces of the following four critical mindsets can be found in the DNA of all family-owned businesses, but these mindsets are more pronounced in the highest-performing FOBs relative to others.

1. They focus on purpose beyond profits

Our research shows that 93 percent of respondents from the highest-performing FOBs believe their company has a clear purpose beyond creating value for shareholders, as compared with 86 percent of the overall group of FOBs we surveyed. This sense of purpose can take many forms. It can be inward looking and focused on building the company’s legacy—for instance, by maintaining a strong reputation, protecting the brand image, or nurturing a strong company culture. Or it can be outward facing, focused on maximizing value for customers or generating positive impact in their communities. Whatever its nature, FOB respondents say they are willing to spend the time and resources needed to bring this purpose to life. Of the respondents from the highest-performing FOBs, 91 percent say they have formal mechanisms to ensure that employees understand, appreciate, and role model their purpose and values , as compared with 84 percent of the overall group of FOBs surveyed.

One place where this mindset is most strongly reflected is in the highest-performing companies’ efforts to support their communities. In our survey, leaders in 58 percent of the outperforming FOBs strongly agree with the assertion that their companies “embrace social responsibility and sustainability,” compared with 39 percent of leaders of other FOBs. One example of community support is a family-owned financial-services company in Latin America that tracks its environment, social, and governance efforts as closely as it does its financial performance. To foster transparency and accountability, it participates in all major market indexes that monitor sustainability and governance—both domestically and abroad.

The purpose-driven mindset is also reflected in the outperforming companies’ approach to hiring, promotion, and retention. Loyalty is a key value in most of these companies and, in our interviews, leaders revealed an ability to look “through the cycle” and avoid layoffs in crisis periods. One Indian conglomerate with roots dating back to the 1800s has basically adopted a “never fire” approach to talent management.

2. They take a long-term perspective and reinvest in the business

Leaders of outperforming FOBs cite their long-term perspective as one of the top three reasons for their success, alongside the ability to innovate and to expand into new markets and regions. They ruthlessly optimize for the longevity and resilience of the organization, even if it comes at the expense of short-term performance.

Ownership structure plays a critical role in the outperformers’ ability to maintain this long-term perspective: 92 percent of outperforming businesses in our research base have at least a 40 percent family ownership. Since they are not beholden to the demands of shareholders or the pressures of quarterly earnings reports, they can take a more patient and strategic approach to investing, which can ultimately lead to sustainable growth and success. One family-owned European retailer, for instance, had for decades remained resolutely focused on an “always buy, never sell” philosophy. In the late 1990s, it acquired an unprofitable brand, and, over a six-year period in which the acquired brand’s performance remained low, the company weathered public scrutiny and pressure to sell. Over time, however, the waiting game eventually paid off and the brand became one of the company’s most successful acquisitions.

Our research also revealed that FOBs, in general, tend to reinvest in the business rather than extract as much as they can from the company through dividends (Exhibit 6). They are not under the same pressures that non-FOBs are increasingly under to prioritize higher dividends to meet shareholder expectations. Indeed, over the past five years, FOBs worldwide delivered dividend yields that were 12 percent lower (on average) than those of non-FOBs.

3. They are financially conservative and cautious about debt and high-risk investments

In general, FOBs tend to be financially cautious, with leverage ratios that are, on average, six percentage points lower than those of non-FOBs. The outperforming FOBs have even lower leverage ratios, by nearly ten percentage points (Exhibit 7).

Interestingly, however, the outperformers say they take on more debt compared with other FOBs. For instance, about 40 percent of the outperformer respondents told us they use debt to finance more than 50 percent of their investments. By contrast, other FOB respondents told us they use debt to finance only 12 percent of their investments. Given that they are using their own money, FOBs often prefer to invest their funds in marketing, sales, manufacturing, and other parts of the business where there are clear paths for growth and some precedent for returns, rather than invest in high-risk areas such as R&D.

This cautious approach to finances also helps the outperformers weather significant economic shocks such as the 2008 global credit crisis and the recent COVID-19-triggered downturn—and emerge in better shape than other FOBs and non-FOBs. For example, a family-owned logistics business in Europe credits its financial conservatism as a critical factor in its relatively quick recovery from global supply chain shortages in 2021. Through the crisis period, the company held a steadfast focus on the long term and prioritized preserving its strong cash position, which allowed it to avoid bankruptcy the past few years while others were falling prey to industry contraction.

4. Their internal processes allow for efficient decision making

Our conversations with leaders in outperforming FOBs point to greater efficiency in decision making, in part because of two factors: centralized but flexible processes and engaged employees.

Despite the existence of investment committees, for instance, the big decisions taken by leaders and teams in outperforming FOBs are usually highly influenced by a single individual or several members of the family who can act more decisively than leaders in non-FOBs. The non-FOBs usually rely on multistage, multiparty processes that can be difficult and time-consuming to navigate.

Interestingly, the outperforming FOBs distinguish between efficient decision making and fast decision making: when family members agree, they make choices quickly. But when family members disagree, the outperformers take advantage of their flexible structures and processes to consider all the different points of view. They understand that decision making can be both quick and deliberate—and that the ability to adjust as needed is a true differentiator in performance.

The benefit of having engaged employees is that “once the CEO has a strategy in mind, it is easier to implement any changes,” leaders at one Japanese FOB told us. This approach to decision making has allowed the company to execute major category and market expansions every ten to 15 years.

Five strategic actions that set outperforming FOBs apart

Through our analyses, we discovered that the very best FOBs combine the four critical mindsets just described with five strategic actions that truly set them apart.

1. They actively diversify their portfolios

The outperforming FOBs in our research base have highly diversified portfolios. One conglomerate reaches more than one billion customers across its consumer goods, agriculture, and real estate divisions, among others. Another FOB started in waste management but has expanded into logistics, clean energy, and mobility solutions. Indeed, our research shows that 40 percent of the outperformers garner more than half of their revenues from streams outside their  core businesses . By contrast, only 7 percent of other FOBs had a similar share of noncore business revenues (Exhibit 8).

Moreover, 70 percent of the outperformers told us they will prioritize expansion beyond the core over the next five years by moving into new industries or geographies or by targeting disruptive businesses.

M&A seems to be the go-to diversification strategy for these organizations. Some 66 percent of respondents to our survey told us they pursued M&A to access new technologies, 63 percent to enter new industries, and nearly 60 percent to tap into new geographies.

Of course, not all M&A pursuits yield the same returns. Previous McKinsey research has found that programmatic M&A —that is, carefully choreographing a series of deals around a specific business case or M&A theme, instead of pursuing more organic, episodic, selective, or large transactions—is far more likely to lead to stronger performance and less risky for any organization. FOBs seem to be taking this message to heart: when asked about their M&A activity, about 40 percent of all FOBs told us they had pursued two or more small or midsize deals per year for the past ten years.

The current findings support previous McKinsey research  that shows FOBs tend to make smaller but more value-creating deals than non-FOBs. Leaders at a family-owned industrials company in Europe told us they actively try to avoid “core myopia.” For years, they said, they had failed to recognize growth opportunities in recycling and sustainability. Now, they prioritize and pursue small acquisitions that they think can enhance their market position. They decide which companies they intend to acquire and for how much, “remaining patient and avoiding rushing into transactions until the opportune moment arises.”

Further, many of the outperforming FOBs seemed more willing than peers to take bolder risks on occasion, with 58 percent indicating they had pursued at least one large deal in the past ten years, compared with 36 percent of other FOBs indicating the same.

2. They dynamically reallocate resources

Previous McKinsey research confirms that dynamic resource allocation   is one of the best ways to achieve growth in an organization. Companies that reallocate more resources more often have been shown to generate significantly higher returns to shareholders, experience less long-term variance on returns, and have a higher likelihood of avoiding acquisition or bankruptcy.

Our analyses show that outperforming FOBs aggressively and dynamically allocate their resources toward businesses, regions, and channels they believe will drive the most growth. In fact, about 60 percent of the outperformers said that, over the past five years, they had shifted more than 30 percent of their capital across businesses or regions, targeting higher-value opportunities. By contrast only 20 percent of other FOBs had done the same (Exhibit 9).

In general, FOBs enjoy an advantage in this area compared with non-FOBs. Their focus on purpose along with their longer-term perspective and efficient decision-making structures allow them to avoid the politics and inertia  that can drive allocation discussions off the rails.

Leaders from outperformer FOBs we spoke with say they take specific actions—in some cases, even cultural changes—to guard against inertia. A century’s worth of diversification has given one family-owned conglomerate in Asia footholds across a wide range of sectors—from petrochemicals to energy, retail, and telecommunications. But to balance out its strategic pursuit of growth, the conglomerate has also built into its finance and strategy discussions formal reevaluations of business performance. It periodically divests underperforming divisions and reduces its ownership interests while reinvesting those resources in higher-growth opportunities. This culture of growth through continuous improvement is so strong that last year the company announced a multibillion-dollar plan to transition from its core business in petrochemicals—which at one point accounted for more than three-quarters of the company’s revenues—to new opportunities in renewables.

Leaders attribute the company’s success to the founders’ direct, personal involvement in identifying big bets and building the financial, operational, and talent competencies required to reallocate resources and act on those bets.

3. They are efficient investors and operators

As mentioned earlier, at the outset of their tenures, FOBs tend to perform better than others because they can allocate capital more efficiently. But as they grow and scale, their outperformance tends to come more from efficient operations. Interestingly, the very best FOBs can do both.

Our data shows that the high-performing FOBs have a capital turnover ratio of 1.4—in line with that of outperforming non-FOBs and higher than that of all other FOBs in our sample. The high performers also report operating margins that are almost 10 percent higher than that of outperforming non-FOBs and nearly twice that of other FOBs in our research base (Exhibit 10).

Their higher-than-average investment and operating performance is driven by three factors. First is their operating DNA, which is passed down through generations and shapes the way their businesses operate, including decision making, customer service approach, talent management, and even developing functional expertise. In South Korea, for instance, the chairman of a family-owned apparel and footwear manufacturer has visited the production line daily for decades and knows each worker by name. Such direct involvement from the company founder has helped foster a sense of loyalty and ownership among employees. Through this access, workers are also getting a first-hand perspective on the operational challenges and opportunities across the organization—and, as a result, are deeply motivated to weigh in with potential solutions.

Second, compared with the other FOBs in our research base, the outperformers use a broader set of data to evaluate organizational performance. For instance, these businesses used more key performance indicators (KPIs) to measure executive performance, including top- and bottom-line figures and valuation metrics. When we asked all the FOB respondents in our research base which of seven designated metrics they had considered in evaluating executive compensation, the outperformers were 10 percent more likely, on average, to indicate that they were tracking all the KPIs we listed.

The last and arguably biggest differentiator is that outperforming FOBs focus on innovation. They invest twice as much in R&D as other FOBs do, and back up those investments with performance management systems. One US-based family-owned company that provides telecommunications and automotive services established a series of programs to support the creation of a tech-venture ecosystem in a part of the country that has not traditionally been a tech hub. The company launched an accelerator for tech start-ups and a not-for-profit program to drive job creation in adjacent industries. Through direct and indirect investments in these programs and companies, the company is helping others while ensuring its own access to top technology innovations and talent in the region.

4. They maintain a relentless focus on attracting, developing, and retaining talent

Talent management is an obsession for the highest-performing FOBs. In our survey, 86 percent of respondents at outperforming FOBs agree or completely agree that their company attracts the best talent. More than 90 percent either agree or completely agree that their company successfully identifies, trains, and develops top performers.

One family-owned luxury retailer in Europe takes an end-to-end approach to talent management. To attract recent graduates and younger workers, the company developed and launched a two-year, nine-part social media campaign—a series of “day in the life” posts filmed by and with existing employees. It also established a program to identify and train thousands of internal ambassadors to help and onboard newer workers. Partly due to these initiatives, the group has been voted a top employer among business school students for 18 years in a row in the retailer’s home country. At the senior-leader level, the company focuses on offering competitive salaries, which it benchmarks constantly. It also provides leaders exclusive proximity to members of the founder family, which creates a sense of personal attachment and accountability for the company’s results among senior leaders.

As a result of these efforts, the company boasts an average length of service between six and seven years—about three times higher than the typical tenure for employees at luxury retail companies. Almost one-quarter of the company’s workforce has been employed there for more than 15 years, and of these, more than 70 percent have been with the company for more than 20 years. The leaders’ perspective is that recruiting exceptional talent and retaining them for long tenures has allowed the company to build and maintain a strong culture of artistic expression, attention to detail, and long-term vision—traits that are crucial to success in a business that hinges on creativity and reinvention.

Also in our survey, more than 80 percent of outperforming FOB respondents report that their companies have built effective training programs to develop the next generation of family members. A family-owned electronics retailer in Africa, for instance, puts all family members interested in joining the company through a rigorous interview process (even tougher than their standard recruiting process) and places them in jobs that are aligned with their skill sets. An Asian FOB in the apparel industry mandates that family members do a series of role rotations, periodically tasking them with initiating new M&A deals, ventures, or resolving existing challenges to evaluate their problem-solving skills.

5. They continually review their governance mechanisms to ensure strong corporate performance across generations

Our research reveals that outperforming FOBs take the separation of family and business matters very seriously. About 80 percent of the outperformer company respondents reveal there is formal documentation in their companies with clear guidelines on the roles and responsibilities of family members. More than 90 percent of the outperformer respondents told us there is an effective and independent board of directors in place, compared with 72 percent of respondents from of all other FOBs who say the same. And 85 percent of respondents from outperforming FOBs report that their companies have a formal forum that meets regularly to discuss family and business issues, compared with only 66 percent of all other FOBs in our research base.

In interviews, leaders in the outperforming FOBs touted the benefits of having strict guidelines about family member roles and responsibilities, especially if the business is still family-led. At a second-generation 100 percent family-owned healthcare services business in the United States, two siblings share leadership roles. One is the president and focuses on strategic responsibilities across three business units, while the other is the chief growth officer and focuses on sales. Their positions very intentionally intersect but don’t overlap. And the siblings bring unique and complementary skills to the leadership team. Before they reached their current positions, however, the siblings spent time in different parts of the company to develop a sense of ownership and connection to the company culture, deepen their understanding of processes, develop their management skills, and most importantly, earn the trust and respect of the broader organization. What’s more, this pathway to leadership has been institutionalized at the company: a third-generation family member is on a similar development journey and currently serves as chief of staff.

Family governance, when well-executed, can be a powerful way to build corporate culture. However, FOBs may also want to look outside blood lines for leadership. Research has shown that professional management, when well identified and given the right conditions to prosper, can produce better results than family-only structures. 6 Nicholas Bloom, Raffaella Sadun, and John Van Reenen, “Family firms need professional management,” Harvard Business Review , March 25, 2011. Indeed, FOBs are increasingly tapping into the expertise of professionals from outside the family, and our research shows that the outperformers do so even more. For instance, 95 percent of the outperforming FOBs in our research base indicated that they actively involve nonfamily executives in setting portfolio strategy, compared with 85 percent of all other FOBs in the research base.

One outperformer, a CPG company based in Latin America, decided last year to break a generations-long sequence of family leadership and hire a CEO externally. A family-owned European pharmaceutical company did the same. Both organizations followed practices that would be standard for any company, family-owned or not. For example, both engaged a global recruiter to conduct their searches and asked them to focus on talent rather than cultural fit. As FOBs grapple with the question of succession, they would do well to keep their focus more on longevity of the business rather than on continuing family stewardship.

This formula of four critical mindsets plus five strategic actions can help to ensure that FOBs capitalize on the potential for significant, profitable, and sustainable growth. The value at stake is substantial: companies that have implemented this formula successfully have been able to climb higher on the economic-profit curve over the past five years, moving up one or two quintiles. Others that follow this formula can do the same and potentially realize a fourfold increase in value creation over the next decade, according to our estimates.

The implementation will of course look different depending on the organization. Companies facing imminent generational transitions may need to focus first on shoring up their governance mechanisms and succession planning. Businesses in stagnant or vulnerable industries may want to focus first on dynamic capital allocation practices to boost their investments in R&D, new business building, and M&A. The formula must be applied judiciously, and with careful attention to what will be most effective given their specific circumstances.

Regardless, the 4+5 formula provides a path for FOBs (and non-FOBs), of all sizes and ages, to improve their performance and continue to do what they have done for decades—support sustainable and inclusive economic growth, raise employment, and improve healthcare and education in communities around the world.

Eduardo Asaf is a partner in McKinsey’s Mexico City office, where Igor Carvalho and Jose Tellechea are consultants; Acha Leke is a senior partner in the Johannesburg office; and Francesco Malatesta is an associate partner in the Dubai office.

The authors wish to thank Aliyah Allie, Michael Birshan, Fredrik Dahlqvist, Gemma D’Auria, Heinz-Peter Elstrodt, Avinash Goyal, Franck Laizet, Ari Libarikian, David Quigley, Liz Hilton Segel, and Sergio Waisser for their contributions to this report.

This article was edited by Roberta Fusaro, an editorial director based in the Waltham, Massachusetts, office.

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Innovating Regional Policy Frameworks in China: The Strategic Zone + Type Zone Model for Sustainable Growth

  • Published: 20 May 2024

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  • Tong Liang 1  

This paper introduces a novel approach to Regional Economic Development (RED) in China, proposing the “Strategic Zone + Type Zone” model as a solution to the challenges of uneven regional growth. In China’s 14th Five-Year Plan context, this study addresses the disparity between eastern and western regions, emphasizing the importance of a tailored approach that considers spatial attributes, economic principles, and technological impacts. Grounded in theories such as Uneven Development Theory and New Economic Geography, the research explores the dynamics of regional disparities, highlighting the necessity for policies that foster balanced growth through innovation, efficiency, sustainability, and inclusivity. The paper critiques the current policy framework in China, which prioritizes geographical divisions, exacerbating regional economic disparities and inefficient utilization of resources. The proposed “Strategic Zone + Type Zone” framework moves beyond traditional regional classifications. It aims to integrate strategic planning with a nuanced understanding of regional characteristics, promoting high-quality development. This approach leverages spatial econometrics to analyze the interplay of various factors influencing RED, offering a comprehensive model that aligns with quality development principles. Furthermore, the study delves into the interrelation of environmental law and regional economic development, advocating for legal frameworks that balance resource protection with economic growth. The research presents theoretical and policy implications, providing insights for policymakers to craft context-specific strategies for equitable and sustainable regional development in China.

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Data Availability

The datasets used and/or analyzed during the current study are available from the corresponding author upon reasonable request.

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Liang, T. Innovating Regional Policy Frameworks in China: The Strategic Zone + Type Zone Model for Sustainable Growth. J Knowl Econ (2024). https://doi.org/10.1007/s13132-024-02022-8

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