London-based branding specialist Kimberly Silvester looks at the success of the most prominent modern global businesses and the equal high standing among retail FX and online e-commerce firms whose alumni have created some of the retail FX sector’s success stories, iwth exciting new products for an internet-based age being a driving factor.
In the UK alone nearly 2,000 new companies are formed every day. Sadly, not all of them survive and flourish. Some will fail, some will stay the same size, and some will grow. The question is: how does growth happen? What are the ingredients required for a new company which enables them to grow into something special and unique in their market?
We could look back at the big old companies who have survived for decades, or even centuries, and see how they grew – but that might not be much of guide for new companies in the digital age, which face very different conditions and markets. So it’s probably better to look at newer companies that have appeared only in the last 50 years and have gone on to become household names.
5 key tips for growth
Firstly, let’s take a look at five tried and tested strategies for smaller companies looking to expand. There is no particular order for these to happen and different sectors might only require one or more of them.
- Look after your customers
Not only are your existing customers more easy to sell to (so long as you did the job right the first time around) there is a lower cost-of-sale implication. You will also be better positioned to sell them something relevant because you already know what they have bought.
- Increase the number of products or services you sell
Increasing your product line-up will help with the above as more products will allow you to sell them something complementary. More products will also open you up to more potential customers who had no requirements for your original offerings.
- Find new markets and territories
Always seek to find new types of customers – they might be businesses in different sectors or direct customers with different geographies or demographics. Never ignore any new business opportunity.
- Look for new delivery channels
It might be opening a bricks and mortar retail unit or an internet presence; you need to be able to find prospective customers wherever they might operate.
- Acquire your competitors
For expansion, this is a fast route to success. You will gain their customers, their channels and territories. You need to tread carefully, mind, but if they are a profitable business and buying them won’t impact on your own business, then go ahead.
Which companies are doing it best?
Knowing what the simple ways for a small company to expand, it is worth looking at companies that started small way and then grew exponentially. They won’t have managed this by the same route, but it’s worth seeing how they reached the stage they are at now.
One of the world’s genuine corporate success stories which offers a single drink product (with a few small derivatives) and a less than mass market appeal, was formed in 1987. They have also managed the feat of attaining global awareness without seemingly using any of the suggestions listed above. Instead, Red Bull decided that simply creating awareness of the brand was enough. They managed to achieve this awareness by investing the profits of their high margin business into sponsorship of sports and other activities which they felt represented the brand.
Their slogan is ‘Red Bull gives you wings’, so extreme sports with a high element of danger were chosen. Formula 1 (the Red Bull and Toro Rosso teams), Red Bull Air Racing, Red Bull Cliff Diving Series and The Red Bull Stratos (Felix Baumgartner, the Austrian Sky Diver who freefalled 24 miles). In 2016 the company reportedly sold 6 billion cans of Red Bull and made $5.1 billion in revenue.
For a company that was formed by college buddies ‘to make a few bucks’ in 2008, Airbnb has grown exponentially since. Helped by a product that spread through the internet like a friendly virus and enabled anyone who owned a home to let it for short periods to anyone who wanted it, the idea was simple enough; put enough sellers in touch with enough buyers and everyone will be happy. And they were. It was a disruptive product which offered an opportunity for people who couldn’t find a hotel in the city where they wanted to stay. With regards to the suggestions above, they quickly realised the global implications of their model and were able to replicate it in different territories.
They understandably didn’t initially buy any competitors because there weren’t any, but they wisely invested in complementary companies. In 2017 they led the $13 million investment into a restaurant booking app, Resy. In the same year, they acquired a Canadian villa rental company Luxury retreats, for $399 million.
Their early success meant that further investment was very forthcoming and expansion made easier. The company eventually became profitable in the second half of 2016 after its revenue had increased by 80% in one year. The company is now valued at $31 billion.
888 Holding PLC
Another company that has taken advantage of the internet revolution and has become a global player in its sector is 888 Holdings, which is now listed on the London Stock Exchange. Formed in 2002 with the name of Pacific Poker, it was born at the right place, at the right time, to tap into the online casino market, which it ended up shaping in its own image. It attracted players from all the world including the US. The majority of the shares are owned by two men, Avi Shaked (50%) and Ron Ben-Yitzhak (11%) through family trusts.
The US Congress Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006 meant that 888 Poker had to close down its US operations. The change didn’t have too much of an impact because, by then, the US was only a small part of their global presence.
The changes to online gaming regulations in 2013 in some states in the US meant that the company returned to the US. The new laws stated that online casino companies had to join an offline partner to get a license, which they duly did. In 2017 the company reported turnover of $486 million and profit of $18 million (despite a $50 million tax bill in Germany).
In the 20 years it has been operating, 888 Holdings has seen many high points – including in 2007, when its profits rose from $157 million to $213 million. The majority of these profits are generated by its casino websites – which present gamblers with the opportunity to play games such as slots, blackjack and roulette from the comfort of their own home – which is still perhaps its biggest selling point.
While its online casinos appeal to gamblers for their convenience, they also provide a unique gaming experience with high-quality graphics and engaging visuals. This is particularly the case on 777.com, which is one of the latest 888 Holdings casino brands, and part of the 888 Casino Club. From the Wurlitzer music and chequered flooring, its visuals immerse players in the world of 1950s Vegas in a one-of-a-kind virtual adventure that provides a flavour of what it might have felt like to play in the world’s gambling capital before the big casinos arrived in town. To see what this retro-themed gambling adventure is all about, visit 777 online casino.
It stands to reason that each company will have a different route to success based on its abilities to be both proactive when it comes to business planning and growth, and reactive to unique and unpredictable market changes. That’s why these three companies above have achieved huge growth in different ways.
Red Bull marketed their way to success by creating a global brand associated with excitement and danger while Airbnb and 888 Holdings rode the internet wave with exciting new products for the internet age. Airbnb was the disrupter (against the existing hotel market) in its market, and 888 Holdings was the innovator (poker had existed for a long time previously but only became truly accessible to millions once it was online).
The subject matter and the content of this article are solely the views of the author. FinanceFeeds does not bear any legal responsibility for the content of this article and they do not reflect the viewpoint of FinanceFeeds or its editorial staff.