Readers of this blog know I think all companies must create and maintain White Space. but some readers have told me that for big companies such spaces are just too hard to create and manage. So I was delighted to read about Wrigley‘s recent acquisition of A. Kurkonov (see full article here.)
Everyone knows Wrigley makes chewing gum. They’ve done so for years. But recently Wrigley has started forays into a number of new areas. They opened a new R&D center in Goose Island, IL to develop new products. They also bought fast growing Altoids mints (from Kraft no less) and quickly launched a chocolate covered Altoids. Both of these were small steps.
Wrigley recently spent $300million to buy the Russian chocolate company A. Kurkonov. This is a significant investment in a business where Wrigley needs to learn. Chocolate candy is a big step outside the old Wrigley Success Formula primarily which was focused on gum and other low priced items located near the register in the check-out line. Now they have a business that is operated outside the Success Formula, with new products and in markets where Wrigley management can watch and learn – outside the U.S. Wrigley can observe how the products are made and distributed, and how customer preferences vary and are changing, as well as how pricing and promotion play into the marketing mix for this market segment. Wrigley will be able to learn how to devleop both new strategies and tactics, and do so in a foreign market away from the meddling of management focused on the old Success Formula.
As Wrigley learns how to successfully compete in "chocolates" (however that market should be defined) the company can develop a method to migrate this old "chewing gum" company into a new Success Formula [which may or may not be closely tied to chocolates, who knows?]. Management can be attracted to what works rather than trying to force ideas that don’t. And through this migration the company can develop new tactics, new strategies and eventually a new identity – in sum a new Success Formula. And that is what White Space is all about.