Michael Collins, Marc‐André Kamel and Kristine Miller
The analysis discovered three principles that could lift a retailer's success in doubling the industry's overall average. It found that those retailers who repeatedly attempted…
Abstract
Purpose
The analysis discovered three principles that could lift a retailer's success in doubling the industry's overall average. It found that those retailers who repeatedly attempted moves had a better track record than the rest.
Design/methodology/approach
Bain & Company analyzed nearly 300 attempts by more than 60 US retailers to enter adjacent businesses during the period between 1989 and 2004.
Findings
The analysis discovered three principles that could lift a retailer's success in doubling the industry's overall average. It found that those retailers who repeatedly attempted moves had a better track record than the rest.
Practical implications
Success (growing profitably at more than 5 percent a year) was achieved by retailers that repeated a certain type of adjacency maneuver. They won 23 percent of the time, while novices managed only 5 percent.
Originality/value
Finding that success rates for adjacency moves rise sharply for those that involve few variants in the company's current cost structures, target consumers or capabilities.