The interesting difference in the two strategies (ie Starbucks vs. Guitar Center) is in storefront brand name. Starbucks only has (as far as I can tell) the "Starbucks" storefront name (although they did acquire the Seattle Coffee Company in 1998, and I don't know if they operate at all under that store name). Guitar Center, on the other hand, operates more storefront names than you can shake a stick at. This, as I see it, is a benefit to Guitar Center, as poor service or quality at one storefront name will not necessarily effect the long-term performance and profitability of the others. Starbucks, by opening so many stores, may be diluting the value of the brand name, and brand perception problems may have a greater effect on overall profits for the company. Just a thought.Mitch wrote:In theory, IMHO it's about market capture and share/control, following the Starbucks model.
Starbucks operates their franchises on the idea that however it works out for individual locations, it all works out well for Corporate. This is the reason why "there's a Starbucks on every corner."
As an example, let's say there's a store operating at the southwest corner of Main and State. Good traffic, always a line, decent service. Corporate decides to open aother store on Main, half a block from Main and State. One of two things can happen:
1) the neighborhood demand for Starbucks can sustain two stores;
2) the nieghborhood business won't sustain two stores.
If #1, Starbucks wins all the way around.
If #2, in theory, the store providing better service with an equal or superior presentation of product will win out; Corporate wins. They still have a store in the neighborhood, better/stronger than before, theoretically further anchoring brand loyalty.
I think a possible scenario for WWBW is that the GC folks put their people in charge, let 'em have at it and see where it shakes out. They'll either increase corporate market share or cut the dead weight, which might not even be WWBW by that point (if it comes to that).
Guitar Center is also working at establishing stores overseas (the only one I remember is near Frankfurt) and may be looking to this to boost market share at home to have a better footing for global expansion.
As long as SOMEONE will still sell a variety of quality tubas at great prices, I'll be happy anyway . . .