Sooner or later growing businesses will reach a point where they have saturated their current market. After all, there are only so many people who are willing to rent movies from a kiosk. But that did not stop Redbox from figuring out a different way to grow.
According to Inc. Redbox and Verizon are now teaming up to offer online movie streaming, which makes it a direct competitor of Netflix now. Here is a snippet from the story:
The co-investment with Verizon is an adjacency move that, importantly, opens a new front for Redbox. The best way to think about new adjacency opportunities is along various dimensions, such as new customer segments, channels, geographies, product segments, or strategic moves along the value chain. In this case, Coinstar is building a new channel with the same product by taking their kiosk-based movie business and expanding it online. Previously, Coinstar’s strategic investments focused on expanding its product offerings within the existing kiosk distribution channel.
As you can see from this concise knowledge nugget from Inc. there are a number of ways for you to grow your business. What follows are little examples for each customer base growing method:
Customer Segments: Most companies break down their customers into groups based off of demography. Although some people argue that this is an outmoded way of thinking many companies still live by it. In order to grow this way you have to move from only serving Segment A (middle aged college graduates with 1+ children in college who live in the suburbs) to also serving Segment B (middle aged high school graduates with 1+ children in college who live in the cities).
Channels: This is all about how you get your products/services to your customers. Redbox suffices as an example in this instance because they are adding online streaming as an additional channel to their already established kiosk channel.
Geographies: Fairly self explanatory. If, for example, In-N-Out were to expand into other parts of the country that would be an example of expansion through geography.
Product Segments: Product segmentation is a way to distinguish products based off of what they do and how they are perceived. For example, if Ferrari were to decide they were going to create an affordable sedan they would be going into a different product segment.
Value Chain: Products don’t just happen, they are built. The mining company retrieves the metals, the metals are shipped to a processing company, metals processed into… eventually an iPad gets made. For the most part there is a separate company at each of those steps. If, however, Apple wanted to take over one or more extra steps in the value chain then that would suffice as a move along the value chain.
What do you think? Will Redbox eclipse Netflix as the major movie rental company anytime soon?Travis Lindsay Center for Entrepreneurship email@example.com