HBR On Strategy
A Lesson on Balancing Scaling with Stability
May 14, 2025
Jeffrey Rayport, a senior lecturer at Harvard Business School, shares insights on the pivotal decisions Ryan Cohen faced at Chewy.com regarding logistics strategy. The discussion highlights the delicate balance between outsourcing and in-house fulfillment amid rapid growth. Rayport explores Chewy's unique blend of technology and personal customer service, along with competitive pressures from giants like Amazon. The case study illustrates critical risks and rewards in scaling operations, ultimately revealing the lessons learned from Chewy's remarkable success.
28:28
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Quick takeaways
- Ryan Cohen's decision to insource logistics at Chewy.com was crucial for managing growth and maintaining service quality during rapid expansion.
- The shift towards premium pet products underscores the importance of emotional connections in consumer purchasing behavior, allowing Chewy to differentiate its offerings.
Deep dives
Ryan Cohen's Risky Decision
In 2013, Ryan Cohen faced a critical decision at Chewy.com as its rapid growth strained its reliance on a third-party logistics partner. Faced with the choice of either slowing down to nurture the relationship with the logistics provider or building Chewy's own fulfillment network, Cohen chose the latter. This bold move involved severing ties with the current provider and investing heavily in developing an in-house logistics operation, a risk underscored by the potential for operational failures and financial constraints. Ultimately, this decision proved pivotal in transforming Chewy into one of the most successful e-commerce companies in the United States.
