For example, cost pressures such as expensive real estate has long kept Red Rooster out of parts of Sydney and Melbourne, limiting the company’s ability to increase its footprint and grow its customer base within the country’s two largest cities.
Yet by launching a new distribution channel – a delivery service to complete its drive-through stores – Red Rooster unwittingly uncovered an opportunity to finally penetrate these populous markets.
“I wouldn’t say that we went into delivery with that in mind, but it was almost one of the unintended consequences – [it] has opened [up] ... more locations for us,” CEO Chris Green told My Business.
“Delivery opens up new formats, so we can actually open in shopfronts now, where the investment cost is probably half the cost of a drive-through format. The rent is typically, I’d say, half to a third, and most importantly, you have dense populations, so it’s quite easy.
“The nice part is that there’s a lot of shopfronts, and so it’s a lot easier to open sites.”
It was a similar case for Bottles of Australia, which manufactures sports drink bottles.
The company had long focused exclusively on the Australian market, yet a trickle of orders overseas belied a significant growth opportunity for the well-established business.
“We’ve been exporting, I suppose probably since about ’93-’94. But I would call it more accidental exports,” said CEO Anton Pemmer on the My Business Podcast.
“When I say accidental, I mean someone’s come across this somehow over the internet or some sort of search, and they’ve wanted to place an order for some product and we sent it to them, as opposed to us developing it and chasing a particular market.”
Having woken up to this opportunity to expand, Bottles of Australia actively developed an export strategy, and the business now exports to 22 different countries around the globe.
“It’s given us the ability to take exports which were say less than 1 per cent of our business going to more like 5 per cent of our business,” Mr Pemmer said.
“At this stage, and [with] what our strategy is doing further forward, we would expect that to go from 5 to 10 to 15 per cent over the next couple of years.”