Can Microsoft Win By Channeling Its Inner Burger King? - InformationWeek

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IoT
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Infrastructure // PC & Servers
Commentary
7/21/2009
03:22 PM
Michael Hickins
Michael Hickins
Commentary
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Can Microsoft Win By Channeling Its Inner Burger King?

Microsoft is pursuing the Burger King store location strategy, announcing that it will basically shadow Apple's retail stores with stores of its own. It has doubled down on that approach by snagging Apple's former vice president of real estate, George Blankenship.

Microsoft is pursuing the Burger King store location strategy, announcing that it will basically shadow Apple's retail stores with stores of its own. It has doubled down on that approach by snagging Apple's former vice president of real estate, George Blankenship.This isn't the kind of move you expect from a market leader.

Burger King decided long ago that it was more cost-effective to open up across the street from Mickey D's than do its own market research, a tacit admission that McDonald's has the better read on the best retail locations.

At least it's a realistic assessment by Microsoft that, while it's a market leader in areas like desktop software and PC operating systems, it's a laggard when it comes to digital entertainment devices like Zune.

But while imitation is the sincerest form of flattery, it's not always the smartest course of action; strippers don't really need Manolo Blahniks when they're pole-dancing.

Microsoft's COO, Kevin Turner, a former Wal-Mart executive, is used to the bare-knuckles street-fighting of the retail world. Far from keeping this strategy close to the vest, both Turner and CEO Steve Ballmer are taking an undisguised delight in riding Apple's retail coattails, knowing that Steve Jobs can hardly sue them for copyright infringement in this instance.

But clever as it might seem on the surface, Microsoft and Apple don't have the same goals, or even share the same customers at the retail level. There's no reason, then, for them to share the same rent districts. Turner has even admitted that Microsoft won't try to imitate the actual in-store experience Apple provides. That's not surprising - Apple provides a combination of amusement park pizazz with a Batcave-like gee-whiz tech support culture that would take years for Microsoft to cultivate.

If it's true that Microsoft intends for the retail stores to act as showcases to "advertise the Windows, Xbox and Zune brands and less to actually sell products. … Microsoft will be paying for expensive leases but won't necessarily recoup its investment through actual sales."

But there's an even greater contrast between the companies that should figure into their respective store location strategies. Apple has consistently picked upscale shopping districts, while Microsoft seems more like a Staples shopping mall kind of place.

It's one thing to decide to take their market-share fight to the streets, but given the divergent strategies and corporate cultures, maybe Blankenship's real job will be to steer Microsoft towards a less confrontational and smarter course than merely aping Apple.

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