Friday, August 28, 2009
I disagree with this article by John Jannarone in the Wall Street Journal's Heard on the Street column. While it may be true that licensed Starbucks locations are more favorable financially than company-owned locations, there are dangers to relying heavily on licensed locations. From a strategic standpoint, Starbucks loses some control when going the licensing route, and that loss of control may diminish the brand. As I've argued before on this blog, Starbucks has already allowed dilution of its brand equity to occur; it has to take great care not to generate further dilution.