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Chef Leppard
Savannah State Fan
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Member since Sep 2011
4931 posts
| Starbucks theory (Posted on 5/1/12 at 1:28 pm)
Been talking to my cousin about buying a foreclosed property together. He told me a good indicator of where to find property where value is going up is look at where they're building new Starbucks at.
He said their development division uses some of the most scientific demographic projection studies in the country. Anybody ever hear this before? Or is this crap
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iAmBatman 
New Orleans Saints Fan
The Batcave
Member since Mar 2011
2136 posts
| re: Starbucks theory (Posted on 5/1/12 at 1:35 pm to Chef Leppard)
I've heard of it but considering they closed a lot of stores a few years ago, it would seem that they get it wrong too.
I would you my own due diligence if I were you
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C 
LSU Fan
The Woodlands, TX
Member since Dec 2007
17398 posts
| re: Starbucks theory (Posted on 5/1/12 at 1:51 pm to Chef Leppard)
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Anybody ever hear this before?
I heard it a few years back when everything was booming so...
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Or is this crap
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Zach
LSU Fan
Member since May 2005
55358 posts
| re: Starbucks theory (Posted on 5/1/12 at 1:54 pm to Chef Leppard)
Don't know how feasible this is for you but every school district of any size does demographic trend studies looking forward 5 to 10 years. If you have any contacts with central office workers you might be able to find out which neighborhoods are declining and which ones are ascending.
I would trust this more than Starbucks because Starbucks is primarily concerned with traffic flow.
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TheHiddenFlask 
Clemson Fan
The Welsh red light district
Member since Jul 2008
16382 posts
| re: Starbucks theory (Posted on 5/1/12 at 1:55 pm to Chef Leppard)
It's called GIS, and it's not exactly what you think it is.
It helps them pick out the ideal location, down to the side of the street, by analyzing traffic flows and demographics.
McDonald's has the best one in the world and CVS has one of the top ones as well.
Burger King and Walgreen's don't even try to compete, they just build right next door.
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Chef Leppard
Savannah State Fan
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Member since Sep 2011
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I can see the CVS thing maybe, but McDonald's? They will throw one of those friggin things up anywhere
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BROffshoreTigerFan 
USA Fan
Youngsville
Member since Oct 2007
9163 posts
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quote:
Burger King and Walgreen's don't even try to compete, they just build right next door.
Sound business plan. Find what the leader does. Copy. Save on R&D. Profit!!
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SFCATiger
LSU Fan
about
Member since Aug 2006
749 posts
| re: Starbucks theory (Posted on 5/1/12 at 2:06 pm to Chef Leppard)
I call BS. If it were true there would be no Sbux in Sacramento or LV.
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I Love Bama 
Alabama Fan
Alabama
Member since Nov 2007
27060 posts
Online
| re: Starbucks theory (Posted on 5/1/12 at 2:11 pm to Chef Leppard)
There is a starbucks less than 1000 feet from my house and I assure you this value isn't going up.
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TheHiddenFlask
Clemson Fan
The Welsh red light district
Member since Jul 2008
16382 posts
| re: Starbucks theory (Posted on 5/1/12 at 2:12 pm to Zach)
quote:
Don't know how feasible this is for you but every school district of any size does demographic trend studies looking forward 5 to 10 years. If you have any contacts with central office workers you might be able to find out which neighborhoods are declining and which ones are ascending.
I would trust this more than Starbucks because Starbucks is primarily concerned with traffic flow.
I used to do a economic research work for Louisiana public entities. Everything is done on a shoestring budget. I would hardly trust the data.
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TheHiddenFlask
Clemson Fan
The Welsh red light district
Member since Jul 2008
16382 posts
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quote:
I can see the CVS thing maybe, but McDonald's? They will throw one of those friggin things up anywhere
FWIW, I'm not throwing it out there as a theory. Their management has admitted it.
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Sound business plan. Find what the leader does. Copy. Save on R&D. Profit!!
It is, but it's a real losers strategy. It's not that the idea is bad, but the kind of management that is okay with second place is never a good one.
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Zach
LSU Fan
Member since May 2005
55358 posts
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quote:
I used to do a economic research work for Louisiana public entities. Everything is done on a shoestring budget. I would hardly trust the data.
When it comes to new school construction they pay the money and get good data. In fact, the last 10 year projection Bossier did on student populations (2000 projecting to 2010) the projections on major shifts were dead on.
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Teddy Ruxpin
LSU Fan
New Orleans, LA
Member since Oct 2006
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quote:
Burger King and Walgreen's don't even try to compete, they just build right next door.
AH HA! Walgreens one upped CVS at the Napoleon and S. Claiborne intersection in N.O. Walgreen's has been there a while but CVS is going up across the street. I bet CVS has the better corner though.
As for following the leader strategy, I think a lot of people blamed that for the US car makers downfall. They would try to copy the Japanese, but when they did, the Japanese had already moved ahead to the next thing. Or so how the theory was told to me.
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kfizzle85
LSU Fan
Houston
Member since Dec 2005
19817 posts
| re: Starbucks theory (Posted on 5/1/12 at 2:54 pm to Teddy Ruxpin)
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Napoleon and S. Claiborne intersection in N.O.
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the better corner though.
Does not compute.
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Cold Cous Cous
LSU Fan
Member since Oct 2003
11862 posts
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quote:
It is, but it's a real losers strategy. It's not that the idea is bad, but the kind of management that is okay with second place is never a good one.
It's not a football game. BK isn't really competing against McDonald's, BK is competing against not making any money. As long as they win that competition they're doing ok.
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kfizzle85
LSU Fan
Houston
Member since Dec 2005
19817 posts
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As a publicly traded entity whose value is extrapolated by directly comparing it to its peers, it is absolutely competing against McDonalds. That is one of the fundamental bases for valuation of any public company. As a company in general, its competing against making more money this year than it did last year. The only companies competing against "not making money" are the ones on the verge of bankruptcy or already in bankruptcy and concerned about their creditors zeroing the equity.
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Cold Cous Cous
LSU Fan
Member since Oct 2003
11862 posts
| re: Starbucks theory (Posted on 5/1/12 at 4:03 pm to kfizzle85)
Under that theory, every publicly traded company that isn't Apple should immediately fire their board and every C level executive because they're not making as much money as Apple. That's not a sensible way to look at the business world.
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kfizzle85
LSU Fan
Houston
Member since Dec 2005
19817 posts
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quote:
Under that theory, every publicly traded company that isn't Apple should immediately fire their board and every C level executive because they're not making as much money as Apple. That's not a sensible way to look at the business world.
No, you're just not interpreting what I said correctly at all, and I think you're doing it on purpose.
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TheHiddenFlask
Clemson Fan
The Welsh red light district
Member since Jul 2008
16382 posts
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quote:
It's not a football game. BK isn't really competing against McDonald's, BK is competing against not making any money. As long as they win that competition they're doing ok.
So as long as they are making any money, it doesn't matter to you? Can I work for you?
They are definitely competing for a limited supply of hungry stomachs that desire crappy greasy food. To say otherwise is obtuse.
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Cold Cous Cous
LSU Fan
Member since Oct 2003
11862 posts
| re: Starbucks theory (Posted on 5/1/12 at 4:42 pm to kfizzle85)
quote:
No, you're just not interpreting what I said correctly at all, and I think you're doing it on purpose.
Right back atcha.
To the original point, BK's job is not to "beat" McDonald's but to maximize its own revenue over expenses. If they think they can do that better by piggybacking on McDonald's GIS as opposed to trying to come up with their own proprietary, superior system, at great cost, I'm not really in a position to second-guess that. This "NEVER SETTLE FOR SECOND PLACE" stuff is like it's coming off a No Fear shirt from 1997.
With respect to the other example of Walgreens/CVS, some time ago I read an article (which of course I can't find right now) that said when a pharmacy went up across the street from another pharmacy, the existing store's revenues actually went up. Apparently some sort of clustering effect draws more consumers to that corner. Dunno if the same thing applies to BK and McD's but it wouldn't surprise me.
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