“Growth demands a temporary surrender of security.” – Gail Sheehy, New York Times Bestselling Author
Ensuring that a business continues to grow and remain sustainable often involves launching a new brand, extending a brand into a new market, entering into a co-product branding venture with another brand or even diversifying into a new market with a new product. Just imagine where Sir Richard Branson would have been had he just stuck to Virgin Records? Particularly in today’s rapidly changing technological and environmentally-conscious market, business as usual can quickly lead to stagnation.
In this week’s post I’ll be looking at the four potential growth strategies for a brand, as introduced by Igor Ansoff, and discuss one potential growth strategy by using Weber as an example.
Potential brand growth strategies
According to Ansoff, there are four potential growth strategies a brand can use to grow. With each strategy there are potential risks associated and each time a business moves into a new quadrant (horizontally or vertically), the risk increases (Mind Tools).
As such, the four options are (Mind Tools):
- Market penetration: entering an existing market with an existing product
- Market development: entering a new market with an existing product
- Product development: entering an existing market with a new product
- Diversification: entering a new market with a new product
In the next section I will be putting forward a diversification growth strategy for Weber-Stephen Products, manufacturer of the popular Weber kettle braai and other charcoal, gas and electric grills.
Weber – For life
Weber-Stephen Products was founded by George Stephen in 1951 when he designed the first Weber kettle braai in a metalworks factory in Chicago, USA. According to the Weber website, he was “Tired of complaining about flat, open grills that exposed his food to wind, ashes and charring fire-ups, [so] he decided to put a lid on it — literally.” Using a metal buoy, he cut the buoy in half, added air vents and legs to produce the first kettle braai prototype (Weber website).
Today, Weber produces a long list of products, including gas, charcoal and electric braais and grills, braai accessories, braai cook books, etc. Most of these products are sold into higher LSM markets. However, for millions of people in developing countries, braaing or BBQ’ing isn’t simply a recreational activity.
Today, more than 3 billion people rely on solid fuels (like wood, charcoal, coal, crop waste, dung, etc.) to cook, which causes serious environmental, health and livelihood impacts – particularly affecting women and children. According to the World Health Organisation, household air pollution from cooking kills over 4 million people every year and leads to serious health issues for millions more (WHO, 2016).
However, there are practical and safe alternatives that can dramatically reduce fuel consumption and exposure to harmful cookstove smoke like wood/charcoal-efficient cookstoves that burn cleaner, use less fuel and are safer to use indoors and outdoors.
Below is the promo video for Envirofit, one of the world’s leading manufacturers of wood and charcoal efficient stoves:
Philips has also introduced a solar fan-powered efficient wood-chip stove for emerging markets:
Efficient cookstove product diversification
I suggest a product diversification strategy for Weber that introduces a wood/charcoal efficient cookstove to lower LSM markets in developing countries on a global scale (Asia, India, Africa, etc.). I think a product of this caliber will not only open up a whole new revenue stream for Weber, but it will also:
- help to improve the livelihoods of millions of impoverished individuals who use wood and charcoal to cook on a daily basis
- help to fight climate change and deforestation
- open up the brand to a new environmentally conscious market, and
- increase brand equity
Given its strong market presence, I think the introduction of this new stove will fit in well within its current brand portfolio and the product will benefit considerably from the Weber brand affiliation. This type of brand extension will give the new Weber efficient cookstove instant recognition, faster acceptance and could save substantial advertising costs for the company. The risk, of course, is that if the product fails, it could negatively affect consumers’ attitude to other Weber products. However, the new product would essentially be focused on a new market segment.
In addition, there is already a strong movement to introduce these alternative cookstoves into emerging markets like the UN Foundation’s Global Alliance for Clean Cookstoves. The Alliance has an ambitious goal of fostering the adoption of clean cookstoves and fuels in 100 million households by 2020. Launched in 2010 by Hillary Clinton, the non-profit organisation works alongside private, public and other non-profit stakeholders in order to remove the market barriers that impede the production, deployment and use of efficient cookstoves. Actress, Julia Roberts, acts as official ambassador for the Alliance:
The introduction of these new cookstoves can ultimately form part of a new, long-term social investment vision for Weber, whereby they make their popular cooking products accessible to all LSM markets. Whilst a new business strategy will focus on retailing these efficient cookstoves into lower LSM markets, distribution into critical areas can be augmented by allocating a percentage of sales of higher value products (like the popular Weber One Touch) to a corporate social investment (CSI) programme. The expansion of such a CSI strategy would fit in well with Weber’s slogan – For Life – given that the strategy would be focused on saving and improving the lives of impoverished individuals.
In conclusion, exploring new growth potential strategies involves various levels of risk, whether its introducing a new product brand or entering a new market. Nonetheless, in today’s competitive market – refusing to explore new product or market opportunities poses a risk in itself. In today’s age of transparency and accountability, I suggest a product diversification growth strategy into efficient cookstoves for Weber.