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Wednesday, January 26, 2011
Strange Business Strategies
4:47 PM | 
Posted by
The I.I. |
This blog thread posted by the Irving Inquisition uses some explicit language, as well as depicting some aspects of life in North Minneapolis that some readers may find objectionable. Reader discretion is advised.
Strange Business Strategies
As you may or may not know, Auto Zone has been attempting to establish a site on West Broadway. That attempted once before in the distant past and then again last year. So what’s the big deal? I’m afraid I don’t have any working knowledge about the endeavor from then years ago; however, last year’s attempt is quite an interesting story.
There were zoning conflicts, existing structures spread across multiple parcels of land, the land itself was owned by numerous property owners, the design didn’t match with Minneapolis code requirements, and it wasn’t a part of the Broadway Alive plan.
Last year, the Auto Zone proposal went before the local housing committee and was passed. Then the proposal went before the board and was rejected. The general public had mixed feelings about Auto Zone anyway, but there were enough proponents for it that another round of talks made it through committee and back up to the board. The proposal squeaked by, and a letter of support was written, signed, and sent. Nearly a year later, the Auto Zone proposal bounced around at the city level like a pin-ball. The proposal would eventually die at the city level; just a few weeks ago, actually.
Does it matter? That’s debatable, who knows? The reason cited; it wasn’t a part of the Broadway Alive plan….
That Auto Zone was going to sit across the street from O’Reily’s. Here’s something kind of strange. I swung by Auto Zone in another part of the metro area and saw this. (See the picture below) Auto Zone across the street from O’Reily’s. Isn’t that like having Starbucks across the street from Caribou? I can understand restaurants; one serves pizza and the other serves Chinese… or something like that. Auto parts are auto parts, there’s no product differentiation at all. Why would you deliberately build across the street from your competition that sells the exact same thing? I can understand why gas stations do that—example of 25th & Hennepin—but car parts? Are there really enough people rushing around to get 5w30 and wiper blades to warrant having two in the immediate vicinity?
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| Auto Zone with O'Reily across the street. |
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6 comments:
It reminds me of back in the day when SuperAmericas started popping up across the street from 7-11s. At some point, it seemed that SA crushed the competition and then bought 'em up.
Perhaps this is the Autozone strategy?
Arrrrgh,
Then perhaps thee can explain why a farmers market have many farmers selling the same vegetables in stalls but feet away? Aye mate it be called the free market and competition, which be what drives prices down and products and quality up if there be enough of it.
Mate, don't be challenging the captains grammar now, he be a sea captain not a school marm.
For once I agree with the Capt. I even understood his message.
It's not at all unusual for competitors to locate near one another. It's a marketing concept called "interdependence" that relies on the combined advertising efforts of several like businesses to create a strong image of geographic preference for those services.
We see it in restaurants all the time and when we are looking for a dining location we gravitate to those locations before differentiating which type of food we are hungry for. This grouping also creates the illusion of price competitiveness, but National Retailers seldom compete by location.Instead they might choose to pick specializations.
NoMi has an abundance of used car owners who self-maintenance their autos (so no problem with market share).
After I have dissected my car to determine what parts I need; rather than take a chance on my part being out of stock locally, I might drive to Central Ave in Columbia Heights where I know that my part will be in stock by one of the dozen parts retailers up there.
It's unfortunate that Auto-Zone received mixed messages regarding development. As a retail poor environment we can sometimes get desperate regarding new business, however it is good that we stick to a long term plan that will both create a advantageous marketing location to attract other firms and benefit the residential environment with an attractive well planned shopping environment.
Competition is a contest between individuals, groups, nations, animals, etc. for territory, a niche, or a location of resources. It arises whenever two or more parties strive for a goal which cannot be shared. Competition occurs naturally between living organisms which co-exist in the same environment. For example, animals compete over water supplies, food, and mates, etc. Humans compete for water, food, and mates, though when these needs are met deep rivalries often arise over the pursuit of wealth, prestige, and fame. Business is often associated with competition as most companies are in competition with at least one other firm over the same group of customers.
Competitors choosing adjacent locations is economic geography -- google Hotelling Model
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