Leveraged Scaling

Leveraged Scaling

When organizations accumulate capabilities, they can put themselves in positions to win. Usually, capabilities help them move from the downstream operations to upstream operations where they can do business and command higher price premiums in the markets. This jockeying requires knowing the best product, and how new products can support it, and how the existing products can seed new ones in future (one oasis strategy). Amazon Web Services was created to support Amazon’s best product (the ecommerce), removing any market demand risk from the strategy. But over time, AWS flourished and became a product even though its core value remains to serve the Amazon’s ecommerce.

In this video, I explain how a Kenyan telecommunication company, Safaricom, is using the one oasis strategy to grow. It has a new ecommerce operation, Masoko, which is leveraging the shops which have served the telecom operator. Through this leverage advantage, via the Safaricom retail shops, Masoko will have more pick-up locations overnight than Jumia. With that advantage, it could become a wonder success overnight because Masoko will not just attract more people to the shops (some will buy things), it will expand the growth of another unit of Safaricom, MPESA, a popular mobile money. As more commercial activities take place in the Safaricom ecosystems, it will become more resilient to overcome whatever the banks are plotting against it.

In your business, you need leveraged scaling, which taps into your existing capabilities, to grow.


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