Bob, Bob’s and Biggby

We were looking for a place to get a coffee the other day, and it occurred to me that the experience we’ve been having over the past few weeks of trying to identify and evaluate the new (to us) companies that are doing business in our new home makes an excellent demonstration of the supply and integration problems a business moving into a new market will experience at roughly the same point. Vendors we’ve used for years without a second thought are not operating here in central Michigan, and regional players we’ve never heard of are filling those niches. For us, this represents a change in where we go to fulfill various needs, and will probably end up changing our purchasing habits, as some products and services we’ve used are not available, and some possibly superior ones are. In either a business or a personal context, this may be for the better – or not…

To take the obvious example, the regional coffee house chain and Starbuck’s competitor called The Coffee Bean and Tea Leaf has never extended operations this far east; instead, the most common alternative you will find is Biggby’s Coffee. We haven’t seen a Foxhollow coffee hut operation, either; our best guess is that since Foxhollow’s business model revolves around the drive-through coffee operation, and most coffee house operations here (including many of the Starbuck’s) already have drive-through windows, there would be no special advantage for Foxhollow to come here (and no special incentive to purchasing a Foxhollow franchise here). Similarly, Peet’s Coffee has a couple of stores in Illinois and Colorado, and six in Massachusetts, but is otherwise located entirely on the West Coast…

Now, I don’t drink enough coffee to make my selection of vendors a major issue, but for some folks not being able to get your morning cup of Peet’s (or Foxhollow) is a critical issue. Imagine, then, if you were trying to open a branch of your business in East Lansing, and one of your most common vendors was not operating anywhere within 200 miles or so. You could have your supplies shipped in from Chicago, or shipped overnight from the West Coast, but either option would add delay time and increased cost to your operation. You could attempt to find a local vendor who could fulfill your needs and hope that your local customers were accept the change (or won’t know any better), but you can’t be sure if this will work. Maybe you should have thought about this before you attempted to enter this new market…

On the other hand, coming to the Upper Midwest we have also found an old friend still operating. In Southern California the Bob’s Big Boy chain is all but extinct, having lost market share to a huge range of newer companies offering informal dining (and hamburgers) to the same market segment. There are only a handful of these operations in Los Angeles County, for example (fewer than half a dozen locations in a county of over 10,000,000 residents), but there are over a hundred of them in Michigan, and we’ve run into more of them just wandering around Greater Lansing than there are in all of L.A. If we had some major use for these operations we’d be in a great new position. Similarly, if a new city contains a huge range of old familiar vendors (many more than in your previous locations) then perhaps this was an ideal area for expansion…

Then there’s the potential for finding new vendor types altogether. Since coming to the Midwest we’ve encountered a large number of casual dining restaurants called Bob Evans. They’re incredibly commonplace to people familiar with the region, but completely new to a pair of Californians. They show some similarity to an IHOP operation, or a Denny’s (both of which are also in this market, albeit in relatively low numbers), but what it most closely resembles is a Cracker Barrel -- something which is also unknown on the West Coast. We’ve already found the Bob Evans chain handy for late breakfasts and light lunches, and very convenient (given their high numbers). When you move into a new market, it’s important to keep an eye out for new suppliers and new applications you can use them for…

Now, if we can just find SOMEWHERE to get a cup of coffee…