Chapter 9 Strategies For Growth Markets
Case: Innocent Drinks: Values and Value
Author(s): Brown, R.; Grayson, D.
Publisher: Cranfield School of Management
Publication Date: 2008
Reference: 708-041-1
Abstract: The first part of this case deals with the development and testing of a new business idea
– market research, written business plan, credibility of start-up team – enabled by raising
£230,000 through business angel financing, in return for 20% equity. The second part examines
the company’s development of an open management style, its responses to environmental and
social issues (responsible entrepreneurship), the way it built customer confidence in the brand
and resisted early equity market floatation or trade sale. A further issue is how to preserve the
integrity and authenticity of a brand whose consumers feel themselves part of the innocent
family, with a stake in the product, and are anxious to protect it. The case highlights: (1) the
importance of proving opportunity through good market research and consumer; (2) maintaining
majority equity share holding in the hands of the entrepreneurs by reducing the start-up capital
needed through sub-contracting expensive manufacturing to proven supplier(s); (3) generating
favourable media publicity via low cost shoestring and viral marketing (labels, cause related
marketing, vans, jazz concerts, website, blog); (4) responsible entrepreneurship through
proactive management of environmental, social and ethical issues; and (5) the role of challenger
brands, and the risks and opportunities when such sustainability-based brands associate with
global brands are controversial for their environmental and/or social impacts. At the end of the
case, innocent faces an immediate issue: with rapid growth in turnover and employee numbers in
the UK and Europe, and after the furore caused by the company’s decision to sell in branches of
McDonalds, what further steps should the management team take to ensure that its brand’s
reputation survives intact?
Case: Icebreaker: The China Entry Decision
Author(s): Lassiter III, J; Heath, D
Publisher: Harvard Business School
Publication Date: 2006
Reference: 9-806-195
Abstract: Jeremy Moon, Chief Executive Officer of Icebreaker, maker of merino-fiber active
wear, thinks about the strengths and weaknesses of staying focused on his rapidly expanding US
and European markets vs. broadening his attack to include China. If he enters China, should he
continue his current strategy of pushing the technical merits of the merino fabric, or should he go
the inherently subjective fashion route, given that the technical apparel market in China is
virtually nonexistent.
Case: Bidco Looks to the African Markets for Growth
Author(s): Mayaka, C; Anzaya, M; (United States International University, Kenya); Mullins,
J; (London Business School (LBS))
Publisher: USIU
Publication Date: 2006
Reference: ECCH 506-069-1
Abstract: Successful companies go through several growth phases before they gain stability in
the market place. As a company grows from a small enterprise, it faces many business and
operational related challenges. This case study traces the growth of one of the leading edible oils
and fats manufactures in Kenya, namely Bidco Oil Refineries Ltd. The company started as a
garment manufacturer, adding products in the edible oils and fats category. After years of
successful operations, the company realized that the Kenyan market could no longer sustain the
company’s growth goals. Bidco was now looking for growth opportunities beyond Kenya. The
Chief Executive Officer (CEO), Mr Vimal Shah, knew that there were many possible approaches
to growing the business: the company could export to more countries, develop new products,
modify the marketing mix, and/or diversify into other businesses. The CEO was considering two
options that seemed to offer most promise to grow Bidco’s business. The first option was to build
a manufacturing plant in Uganda to produce edible fats, oils and soaps. The government of
Uganda was very keen to have such an investment because of the jobs it would create, and the
foreign exchange it would bring to the country. The second option the CEO was considering was
a US$150 million investment in 30,000 hectares of palm plantation in Uganda. The CEO needed
to make a choice on the investment opportunity to recommend to the board of directors.