Monday, April 21, 2008

How Did a Brand Die?

I returned last week from an extended road trip through Wyoming and Montana. During the trip I looked for subjects to write about and found no shortage. I'll leave the plight of Native Americans to other writers, but the view from the freeway was not encouraging. I also found an interesting idea about entrepreneurship and the annual summer ritual in cattle country involving male calves, but I will leave that one to others as well!

What I did notice on two occasions was the unique gable architecture of buildings that had once been Stuckey's and Nickerson Farms roadside restaurants. As you may remember they were once scattered throughout the US with their brand identification pulling in travelers off the interstates for food, snacks and souvenirs. Now, I can't recall seeing a single one in operation. What happened? How could operations of such size and identity just disappear? Unfortunately, I don't know the specific reason but it obviously involved mismanagement operationally, strategically, financially, or all three. If someone knows either of the stories, please send it to me. And, it's not that the concept was not viable because Cracker Barrel is substantially the same as what Stuckey's and Nickerson Farms once were. Cracker Barrel has tremendous brand loyalty. People in the East and Southeast plan their road trips around Cracker Barrel locations. One distinction may be that Cracker Barrel, while near interstate highways is also in urban locations. But if that were the key distinction, why didn't the other two see that and adjust their strategy?

Saturday, April 5, 2008

Help for homeowners???

From time to time I see an interesting juxtaposition of seemingly unrelated news items. Such was the case this past Thursday in the New York Times. In the news was a report on the approval of a bill to assist homeowners at risk of foreclosure. In the final version of the bill the only item that could even remotely help homeowners was a provision for funding counseling for those about to loose their homes to foreclosure. HUH? That is like the t-shirt on the little boy that had printed "My parents went to Hawaii and all I got was this lousey t-shirt". Home builders, on the other hand, will fare a bit better. They will be able to carry back financial losses on their books & can immediately recoup taxes paid for the last four years. How long do you think it will take for a bunch of other industries to hold up their hands and demand the same treatment? Another provision will provide a tax credit of $7,500 to someone buying a house out of foreclosure.

An unrelated story in the same issue of the Times told about a couple in Detroit waiting to sell their home to relocate to another city for a new job. Despite reducing their price they have been unable to sell in part because they must compete with foreclosed homes on the market. So the foreclosed house down the street they are competing with now has a $7,500 cash bonus attached to it. This will likely help the mortgage company sell their house but how does it help the homeowner? It doesn't, quite simply. In fact, to maintain their competitive position they may need to lower their price by $7,500 or more. But hey, they can get counseling!!