Not satisfied with establishing market dominance in just one area, forward-looking companies like Airbnb and Uber continue to explore new arenas of profit. Leveraging success into adjacent markets isn’t about making a complete pivot: it’s about applying your enterprise’s core competencies in a new way.
As reported in Forbes, this kind of agile startup strategizing benefits even well-established companies, in the tech world and beyond. Here are 5 companies that understand the vast potential of expanding into adjacent markets.
The home-rental startup is getting into the flight-booking game with Flights, an online airline reservation tool. This move will position the company to cover all aspects of the consumer travel experience, and makes it a viable competitor for booking giants like Expedia and Priceline.
Red Bull the energy drink may “give you wings,” but Red Bull the media company will give you TV shows, magazines, movies, books, and music. Producing original sports and lifestyle content has made Red Bull Media House one of the world’s leading premium content providers. The bonus? An effective venue to advertise its main product.
Exploring adjacent markets predates the digital age. Direct-selling giant Avon has always stuck to its original marketing model, but used to be known for another product: books.
As Amazon would do decades later, Avon expanded its offerings while keeping the same door-to-door and community-based marketing technique. Eventually abandoning bookselling, Avon switched to beauty, household, and personal care items in 1886 and the rest is history.
Elon Musk’s electric car company, Tesla, recently moved into the energy storage business with the Tesla Powerwall. Using technology developed for its cars, the company created a home battery product—and with it, branched out into a growing $19-billion industry.
Uber made the move into food delivery with UberEATS, launched in 2016. By using the same back-end tech the original Uber app is based on and drawing on the massive network of drivers it already has in place, UberEATS is in a favourable position to be a major competitor with food delivery services such as Grubhub.
Take a look at our story on Uber’s move to leverage its passive data into profitable partnerships here.