Last week I posted my thoughts about bowling proprietors expanding into other venues within their existing structure. I received a very erudite letter from one of my blog readers, Joe Shumacker, past President of the BPAA, with a commentary on that blog.
Here is his letter in full:
In addition to Borders filing for bankruptcy, Barnes and Noble is in the middle of a proxy battle for control of the company. Clearly a marketplace disruption is occurring in the “publishing” industry. The changes will be major and life will never quite be the same, for the companies or consumers.
Bowling enjoyed a very strong marketplace disruption in the 1950’s – 60’s with the advent of the second generation of bowling (Gen2). The third generation Gen3) has been a much weaker disruption, far below it potential for creating a positive future for bowling. Although the results are disappointing to date there is still time to get it right.
There is a counter point to your position on creating multiple functions within a bowling box. There are many examples where the bundling of functions has not worked. The car-boat concept has been around for years. Efforts to make your TV your PC have failed to gain much traction. The jury is still out on medical clinics located in drug stores. There is an appeal in attempting to do everything for a customer (client).
Comcast is attempting just such a bundling with cable, Internet and telephone service. There seems to be two keys to success or failure in the bundling of functions strategy. One is whether the component functions are a product of common skill and expertise on the part of the provider. Comcast believes it has the skill and expertise to pull it off. The second is whether the consumer is comfortable in sourcing the varied functions from a common provider. As an example I once saw a Mobil gas station in an upper middle class community with a sign stating it had a sushi bar inside. I did not stop for lunch. Another example is found in the old joke about the guy who went to veterinary and taxidermy school at the same time. The strategy was that either way you got your dog back.
I am a firm believer in the strength of bowling as the core of an operating business. The core can supported with ancillary and complementary revenue sources with a marginal expansion of skills and expertise. There is also little or no customer resistance to the expanded products and services, it fits into the expected experience. As an operator moves from complementary functions to truly parallel functions such as destination sports bars, major arcades or restaurants, the level of complexity increases greatly.
The cost of operation is much larger. The risk involved is far greater. The fundamental questions remains; 1. Can we do right (skills & expertise), and 2. Will the customer buy into our selling proposition?
The bundling of parallel functions can lead to significant success. It is however an exercise the operator needs to enter with his or her eyes wide open and with the support of experts. The use of experts (consultants) in the planning and development phases will reduce the risk of totally missing the mark with what seemed to be a very logical proposition.
My first question for someone considering a such an expansion is whether he or she is getting the most she can out of the bowling operation. If yes and further profitability is desired or required then do some serious homework on the business you are lashing onto the side of your bowling business.