Over their lifetimes, the vast majority of the world’s 100 largest companies achieved growth from both their core business and Engine 2 activities
Make new businesses and keep the old
US consumers' net positive perception
Silver and gold
Sources: Bain analysis and Capital IQ
Initially established as an instant messaging service, Tencent used a mix of organic growth and financial plays to diversify into Engine 2 businesses across gaming, e-commerce, fintech, and cloud and business services, thereby evolving into a global tech conglomerate
Shell expanded operations from upstream to downstream into different parts of the value chain, enhancing its share of the profit pool
Walt Disney diversified into theme parks and streaming businesses as its Engine 2 bets, thereby broadening offerings to existing customers
Toyota pioneered the hybrid vehicle technology
and is gradually transitioning from traditional ICE (Internal Combustion Engine) vehicles to electric vehicles manufacturing, in response to evolving customer demand for sustainable alternatives
Coca-Cola focused on growing its core business through its flagship product 'Coca-Cola’ by growing
it to full potential and launching new editions
(e.g., Coca-Cola Zero) to meet evolving consumer preferences; simultaneously enhanced its beverage range to non-carbonated options such as bottled water, juices, iced-teas, and energy drinks as close adjacency moves
of the top 100 companies still leverage their original core business as a primary growth source
82
%
Divested core
Core overshadowed
70
%
At the same
time, nearly
have successfully
launched scale
Engine 2 businesses
Engine 2 businesses at these
companies generate, on average,
What new growth looks like
Bain’s analysis of these companies finds common archetypes among Engine 2 businesses
Engine 2
innovators
70
%
Totally new businesses
Value chain
integrators
Customer
expanders
Far adjacencies
Core reinvention
Core and close
adjacencies
6%
24%
30%
8%
32%
Select examples for details
Expanded primarily to completely new businesses/ sectors/industries, often through acquisitions
Examples include Reliance Industries
and Tencent
Expanded to predominately far adjacencies as a value chain expansion play
Examples include Shell and Amazon
Expanded to predominately far adjacencies
by broadening offerings to existing customers or accessing new customers
Examples include LVMH and Walt Disney
Substituted part or all of their original core with a different value proposition or business model targeting the same customer need
Examples include Toyota and Netflix
Focused on bringing the original core to full potential, and strategically ventured into closely related areas
Examples include Visa and Coca-Cola
The core and more
The mix of Engine 2 businesses varies by industry, but across all industries, Engine 2 business creates significant growth beyond the core
VCI
CE
VCI
CE
CE
VCI
CE
VCI
CE
Value chain integrators (VCI)
Customer expanders (CE)
Core reinventors
Core and close adjacencies
Tech, media, and
communications
Healthcare
Financial services
Retail and consumer
products
Industrials
Value chain integrators (VCI)
Customer expanders (CE)
Core reinventors
Core and close adjacencies
Notes: Net positive perception is the percentage of respondents who feel the industry does a “good job” with customer service minus the percentage of respondents who feel the industry does
a “bad job”; digital maturity level based on company reported progress in achieving 24 digital transformation competencies across three focus areas (digitalized communication and client experiences, digitalized processes and work experiences, data analytics) and three underlying capabilities (organizational, strategic, technological); NPS® is a registered trademark of
Bain & Company, Inc., NICE Systems, Inc. and Fred Reichheld
Sources: Bain US Consumer Survey, March 2024 (n=500); 2022 Broadridge Digital Transformation and Next-Gen Technology Study (n=750); Consumer Assessment of Healthcare Providers and Systems; Medicare Advantage prescription drug plan; Bain analysis
of revenue
55
%
Nearly
Engine 2
innovators
Note: Width of bars represents relative size of industry.
Industrials