Great questions. Regarding the choice of one customer, I don’t think it necessarily has to be universal principle, but I do think the likelihood of Brooks being successful against the likes of Nike is vastly higher if they can focus on a specific segment of the market. I could definitely see future expansion to other markets in the future, but I think there is still a lot of runway left in the running world.
Regarding channel, it’s not so much that Brooks won’t use online channels, they just make sure that price points are lower than those in their retail partner’s stores. Also, Brooks shoes are sold on Amazon, but they are not sold directly from Brooks and typically are past year models. But, as you allude to, perhaps there is a way to satisfy multiple channel partners. So far though, I think Brooks has erred on the side of making their traditional retail partners happy.
Really interesting Gabo. Thanks for sharing. I had heard of Harry’s before reading your post, but never would have guessed that they did their own manufacturing. Rather than simply a cost-advantage, it seems like being a manufacturer provides a significant benefit for innovation–Harry’s can quickly incorporate feedback from customers into product designs and the manufacturing process/materials.
I also thought the question of brick-and-mortar was interesting in this context. I recently read another post about GNC (the supplement company) from another student that is severely suffering because their brick-and-mortar model, that is supposed to provide education to customers, is being upended by bodybuilding.com which educates customers virtually. That leads me to wonder, what value does a brick-and-mortar presence bring to Harry’s? It it a way for new customers to get introduced to the brand?
Really interesting Yifeng! I can totally see why so many in the academic community were opposed to Elsevier, but the new author-pay model does seem to provide incentive for publishing lower quality papers. I wonder if there is a way to maintain the reputation of prestigious journals without a reader-pay model.
Really interesting example. I wonder how much of GNC’s recent failures are due to an antiquated, high cost brick-and-mortar distribution model vs. poor suppliers/ingredients damaging its reputation. I would be interested to know if GNC considered bringing in house all manufacturing due to the problems they had with external suppliers.
Most brick-and-mortar businesses that are successful today seem to create an in store experience that is difficult to replicate online. GNC is a good case study to look at for brick-and-mortar businesses whose in store value proposition is educating customers. Education can be done so well online these days that having a physical store may present significant cost disadvantages.