IN 2018, BEST BUY ANNOUNCED that it would enter the health market. It was an unexpected move for a consumer electronics retailer, but it was consistent with then-CEO Hubert Joly's passionate advocacy for making Best Buy a company with a deep sense of purpose. Starting with a focus on helping the elderly to age safely at home, the company broadened the strategy to make Best Buy Health a provider that "enables care at home for everyone." It was also a lucrative opportunity: Home health is forecast to be a $265 billion market by 2025.
Over the next few years, Best Buy Health tested its key assumptions about the opportunity, seeking out the sweet spot that would allow it to build a new business to sit alongside the company's existing retail franchise. By 2022, it was a $525 million business, projected to grow at a 35% to 45% compound annual growth rate through 2027. The initiative created a new growth vector for its parent company and gave it a measure of resilience in the turbulent consumer retail sector.
Best Buy succeeded where many companies fail. It moved through the three innovation disciplines required to build new businesses: ideation, incubation, and scaling. It came up with a new idea for solving the customer problem of aging safely at home, incubated it by running in-market experiments to test value propositions, and then scaled it to a revenuegenerating business unit. This is a relatively rare accomplishment. Our research finds that while 80% of companies claim to ideate and incubate new ventures, only 16% of companies successfully scale them.
Diese Geschichte stammt aus der Summer 2023-Ausgabe von MIT Sloan Management Review.
Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.
Bereits Abonnent ? Anmelden
Diese Geschichte stammt aus der Summer 2023-Ausgabe von MIT Sloan Management Review.
Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.
Bereits Abonnent? Anmelden
The Trouble With Your Innovation Contests
Not all innovation contests should be winner-takes-all or judged by senior executives. New research shows how to structure contests to meet specific goals.
Scaling Automation: Two Proven Paths to Success
Lessons from two leading hospital systems show how to overcome the obstacles to automation.
How Tech Fails Late-Career Workers
Managers must make deliberate choices to support older workers' use of complex technologies.
Building Culture From the Middle Out
Midlevel leaders are critical to fostering an organizational culture that’s healthy and vibrant.
Why Manufacturers Need a Phased Approach to Digital Transformation
Those that succeed with this difficult work break it into three stages, each with its own guiding metrics.
Will Large Language Models Really Change How Work Is Done?
Even as organizations adopt increasingly powerful LLMs, they will find it difficult to shed their reliance on humans.
How to Make Better Friends at Work
Friendships in the workplace can enrich our lives and make us better leaders and workers if we make the effort to cultivate truly healthy relationships.
Health Care Platforms Need a Strategy Overhaul
To succeed, digital health platforms must shift their approach in three key areas.
Steer Clear of Corporate Venture Capital Pitfalls
Big companies and risk capital can be awkward partners. Here’s how to get corporate venturing right.
New Markets, New Opportunities: Identifying Where and How to Make Your Play
How do leaders determine whether to build a new business around a promising new technology?