US retailers looking to enter adjacent businesses should follow
three principles to increase their chances of success: First, look
for new businesses that are close to the retailer's core business;
second, concentrate on markets with larger margins; and third,
estimate the potential for growth in that market. About half of the
companies studied by Bain didn't follow any of those principles,
and their success rate at entering adjacent markets was a meager
6%. When one principle was followed, the success rate rose to 30%.
Meeting two resulted in a 60% success average, and three a slightly
higher rate.
