3 Innovative Companies: Harry’s, P&G and Chobani
These three growth strategy examples show a variety of diverse growth possibilities. There are many strategies companies can employ to drive growth, such as:
- launch brand extensions
- create new products
- expand into new markets
- and many more
However, what works for one company, might not work for the next, given a variety of factors, including industry, brand and company dynamics. Today more than ever, leaders are keen on making sure they have an effective growth strategy that will allow them to continue growing post COVID and clearly capitalizes on evolving consumer behavior and preferences.
Let’s take a look at three innovative growth strategy examples and an analysis of why they worked.
Growth Strategy Example 1: Harry’s Direct-To-Consumer Approach
“One of the things we always talk about is that strategy is what you don’t do, as opposed to what you decide to do, because we have all these opportunities,” Harry’s Founder & CEO Jeff Raider
Harry’s Inc., a disruptor in the razor category, launched exclusively online in 2013 with a subscription-based model. Harry’s digital-first strategy targeted Millennials and Gen Z consumers looking for convenience, value and personalization. At the time, Gillette was the market leader in brick and mortar with a 70%+ market share in razors. Rather than taking the traditional retail approach, Harry’s saw the opportunity in building out a new online channel that would allow it to effectively reach and learn from its target consumer – and it paid off big. In 2020, Harry’s Inc. had an estimated $370 million in sales, had expanded their distribution to Target, Walmart and Costco and was valued at $1.7 Billion.
This growth strategy example shows that Harry’s took an innovative approach- it basically did the opposite of what the competition was doing:
- Focused on building out a new online channel to drive market penetration: The direct-to-consumer approach in razors capitalized on ecommerce trends and shifting shopper behavior among target consumers.
- Placed value on simplicity and prioritization: While the competition was focused on adding more complex and premium benefits to razors, Harry’s re-defined value and focused on offering only a few, simple, high-quality products. Leadership’s commitment to simplicity carried through to all aspects of their strategy, giving organizational focus. In 2018, Founder & CEO Jeff Raider indicated: “We’d rather do three things incredibly well than 100 things not so well,…And that’s allowed us to be pretty deliberate in the way that we’ve built the brand.”
- Grounded on customer engagement and insights: The subscription-based model allowed Harry’s to not only have a direct relationship with its consumer but also learn how they interact with their brand to improve their online portal, product offerings and marketing tactics based on feedback and hard metrics.
Growth Strategy Example 2: P&G Innovation Focus
Procter & Gamble (P&G) has over 60 global brands with over $70 billion in net sales and growing. Most of its brands have been around for over 50 years and hold the largest market share in the categories they play in.
P&G is a large company with a multi-faceted strategy, however, core to its growth strategy is Innovation. According to CEO Bob McDonald
“We know from our history that while promotions may win quarters, innovation wins decades.”
One of its most successful innovations – Swiffer – launched in 1994 and revolutionized the home cleaning category, giving convenience-oriented consumers an easier way to clean floors and surfaces. Swiffer is now a $500 million brand with sweeping, mopping, dusting, and (most recently) air cleaning product offerings. While not every P&G product launch has turned into a multi- million dollar business, those that have enabled significant growth and landed P&G – a 180-year-old business – on the list of 50 of the Most Innovative Companies.
This is an innovation-focused growth strategy example, and it has worked for P&G because it was accompanied with:
- Company-wide focus on innovating faster: P&G evaluated what process and ways of working needed to change within the organization to enable agile product development and improve go-to-market speed, so that it could capitalize on trends faster and win out versus rapidly-growing smaller players
- Prioritization of breakthrough innovation: In order to achieve the growth it was after, P&G invested in disruptive innovations – products that would tap into an unmet consumer need and create new market opportunities like Swiffer
- Marketing investment: P&G is a marketing powerhouse that spent $10 billion in advertising and marketing in 2019 alone. It’s ability to support new products and new brands in new categories is undoubtedly an advantage versus competition
Growth Strategy Example 3: Chobani Diversification Strategy
Chobani, launched in 2007, popularized Greek-style yogurt in the US. Mainstream big players (Yoplait, Dannon, etc.) quickly followed, and Greek-style yogurt is now estimated to be a $7 billion category globally. It accounts for over 50% of yogurt sales in the US.
While Chobani’s initial success is admirable, equally remarkable is its ability to continue to drive double-digit growth by extending its brand into new dayparts and categories. Today, Chobani offers a variety of snacking yogurt options and plays in Coffee, Coffee Creamer, Oatmilk and Smoothies. These ventures have proved successful, with 12% reported growth for the billion-dollar company in 2020.
Chobani’s venture into beverage categories is a growth strategy example of diversification that stands-out for two reasons:
- Extending brand into new categories to broaden company positioning: Chobani is a brand that is associated with being healthy and rich in flavor, and it is leveraging that brand equity to play in new categories and eventually transform itself into a “modern food company”
- Built on strong digital consumer engagement: Fans, a.k.a. Chobaniacs, are often the first to sample new products and are encouraged to share their stories, recipes, and love for Chobani online through social media campaigns. Similar to Harry’s, having direct digital customer engagement has allowed the brand team to learn from loyal customers and develop a brand authenticity that is hard for other, larger players to replicate
Silk is another great example of a brand that has successfully extended into other plant-based categories. Here is a closer look at the Silk Brand Case Study.
Each of these growth strategy examples is different – there is no one-size-fits-all answer. To inform their growth strategy, these companies took into account evolving consumer behavior to identify gaps and opportunities for their brands. They also firmly committed to delivering growth based on what made the most sense for their broader company objectives, including lining up assets and investing where needed to drive prioritization and organizational focus.