Kids & Company: Entering the U.S.

By: Boris Groysberg and Matthew Preble and Katherine Connolly Baden

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Synopsis: In April 2017, Victoria Sopik and Jennifer Nashmi, CEO and CFO (respectively) of Kids & Company, a Canadian childcare provider that they had co-founded in the early 2000s and developed into a nearly 100-unit enterprise, are discussing how the company should proceed with its planned U.S. expansion. Kids & Company already has five U.S. childcare centers in and around Chicago, Illinois, and one under construction in Boston, Massachusetts, but before going any further, the two leaders plan to discuss what they have learned so far from their U.S. experience, and how that should inform their strategic growth decisions moving forward. Unlike Canada, the U.S. already has other large, for-profit childcare providers, so Kids & Co. will have to grow in a more mature market, albeit one where Kids & Company's leaders still see substantial opportunity. Company leaders also believe that the company's "boutique" childcare centers, which maintain a strict focus on customer service and flexible childcare options, would be well-received by U.S. consumers, and help it stand out from the existing, more-standardized options. The question now is how, and how fast, to grow. Should it just replicate the exact model it has developed in Canada-which has proven somewhat challenging thus far in the few years it has operated in the U.S.-or adjust elements of its model? Should it look to acquire established providers, or possibly even franchise the brand?