Built for Growth: Expanding Your Business Around the Corner or Across the Globe Hardcover – 7 Mar 2005
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From Kirkus Reports, February 10, 2005 Volume 2, Issue 1
Built for Growth: Expanding Your Business Around the Corner or Across the Globe
By: Arthur Rubinfeld and Collins Hemingway
Publisher: Wharton School Publishing
Pub Date: March 2005
With a first section titled “Make No Little Plans,” Rubinfeld makes clear his philosophy of viable business expansion. As the man instrumental in taking Starbucks to the nearest corner, he knows from expansion. He also knows about the mainstays of any successful business: functional design, staying on budget, maximizing profits, and customized customer service (each of which is treated in its own section). From this strong foundation, the business person can begin to think big, or “Go Long,” in Rubinfeld’s parlance. The first step is to create a business plan, which the author explicates in detail. After assuring that the economic plan is rock-solid, then make sure that employees will remain motivated. Rubinfeld also has plenty of ideas on how to maximize revenue with a minimum investment: a pizza chain can market its sauce, a crafts store can offer lessons to shoppers for a premium, and so on. Although the sections on real estate and “locationing” are particularly valuable given the author’s experience, nearly every page has a concrete idea, suggestion, or caution. Rubinfeld delivers serious value for money here, and small business owners and managers would do well to take advantage of it.
March 28 2005Book review: Blend that brought the world Starbucks
By Jonathan Birchall
BooksBUILT FOR GROWTH
Expanding your business around the corner or across the globe
By Arthur Rubinfeld and Collins Hemmingway
Wharton School Publishing $25.95
Ever wondered what happened to the glass and metal storage bins full of coffee beans that used to stand around in Starbucks' coffee shops? The design team, apparently, thought they would give customers a subliminal connection to old-world in-store coffee roasters, but without that old-world fire risk.
But the company's operations people never liked the idea. The staff didn't use them. The storage bins became just a store decoration. And then they were slowly phased out.
The hand-made pendant lampshades over the curved wooden platform used to present drinks to the customer, on the other hand, are still around - spotlighting each beverage as if it were something more than, well, just a coffee.
After 10 years leading Starbucks' store development programme, during which time the company expanded from 150 stores to more than 4,000, Arthur Rubinfeld has an eye for that kind of detail.
Trained as an architect, his early career included working as construction manager on a hotel building in Manhattan; he moved on to directing workers on the building site of one of the most successful retail brands in recent business history.
So, appropriately for a man whose made his name in bricks and mortar, or at least in terracotta tile and modular countertops, he has written a very hands-on manual for the would-be entrepreneurial retail brand builder. Strangely, for a book that celebrates original thinking, Wharton Publishing (an imprint of Pearson, owner of the Financial Times) opted for a title that echoes Jim Collins' best selling Built to Last. But this is a far more wildly discursive production, ranging from tips on signing a good lease, to the importance of a unified concept of design, to plain old-fashioned business street smarts.
Trying to get a grip on the economic demographics of a potential location for a new store or restaurant? Check out the clothes hanging in a local dry cleaners (too many shirts is bad news). Or assess the range of ethnic foods available in a local supermarket - greater variety in an up-market supermarket means more adventurous shoppers.
But it is the anecdotes from Starbucks' evolution, and from Rubinfeld's subsequent career as a brand development consultant, that drive the book forward. From store design and location to "high touch" customer service, the brand's expansion provides the paradigm for the value of combining imaginative planning with hard-nosed execution.
The author describes, for instance, how a design team came up with the concept of using design "touchstones" of earth, fire, water and air that were supposed to evoke the development of the coffee bean (growth, roasting, brewing and aroma). Sounds zany, perhaps, but it inspired the palette of colours used and the organic feel of the stores, and in turn shaped other decisions, such as the choice of round, rather than square tables, aimed at creating a less formal mood that made customers more relaxed.
Taken all together, the design concept worked in a way that the company's rivals found impossible to emulate with attempts to mimic any individual element such as the wallpaper, or the lighting.
The process also resulted in a kit-of-parts approach, where 80 per cent of every new store could be fitted with a selection of mass produced standard components, with local designers then given leeway to customise the remaining 20 per cent to meet the conceptual requirement of individuality. The stores in turn were being directed to areas selected by both economic and educational demographics, with the exact location of each initial bridgehead outlet individually chosen for its high-profile impact.
Sometimes the authors' principles seem self-evident, such as seeking staff who are prepared to make eye contact with the customers. But there are also enough failures around the world's shopping zones to suggest there's a pretty big market for instruction, and he tells his stories with the enthusiasm of a man who clearly loves the detail of retail.
You can feel his pain over the foolishness of a cashier at the head of a long check-out line asking customers whether they had found everything they wanted. Or his discomfort over dirty tables in an ice-cream parlour, or chefs cooking out front in an Italian restaurant wearing tatty sneakers and scruffy beards.
This is the nitty-gritty of the competitive retail war being waged across the US, and elsewhere too, in the battle to persuade customers to differentiate. At its heart, he argues, is the struggle between two visions of the retail future - "the death spiral of commoditisation and price wars or the life spiral of creativity, quality and differentiation".
The big brands are increasingly seeking to personalise the impersonal - Wal-Mart already has its greeters at the door whose job is to make customers feel wanted.
For Rubinfeld, the smaller retailer will only survive in what he calls the "New Age of Retail" by defining a defensible lifestyle or speciality niche. And once there, they need to secure a position with "high touch and human engagement". After all, that's how Starbucks persuaded people to spend all that money on what is, well, just a cup of coffee.
Review in Library Journal, May 1 2005
RUBINFELD, ARTHUR & COLLINS HEMINGWAY. Built for Growth: Expanding Your Business Around the Corner or Across the Globe. Wharton. 2005. c.256p. index. ISBN 0-13-146574-0. $26.95. BUS
Creating and developing a retail brand can be challenging, but as businessman Rubinfeld and coauthor Hemingway maintain, it must be done properly. Rubinfeld knows whereof he speaks, having played a role in Starbucks's retail expansion and worked on Oakley, Gateway, Adidas, and Washington Mutual brand-building campaigns. The authors intend the book to
be "a valuable primer on all aspects of retail: brand, location, people, finance, property management, expansion strategy and long-term thinking." To that end, they advocate a three-step approach-ideate, create, and execute-which, in a nutshell, translates into formulating ideas for a business, creating viable business solutions, and then successfully
following through. While the importance of "location, location, location," high-quality retail design, and optimal customer service may seem obvious, the authors stress that these are in fact vital and often overlooked retail
building blocks. An informative read for both beginners and seasoned retailers, this outstanding book abounds with insightful case studies and expert advice that should enhance the success of any retail brand.
Recommended for public libraries and all business collections.
- Richard Drezen, Washington Post/New York City Bureau
From the Back Cover
"A valuable primer on all aspects of retail- brand, location, people, finance, property management, expansion strategy, and long-term thinking. Rubinfeld understands the difficulty of the small guy getting started and the big guy keeping the brand fresh. Even an experienced retailer will want to stop and reflect at his insights, which come from many years in every aspect of thebusiness."
From the Foreword by Jeff Brotman, Chairman, Costco
Built for Growth shows exactly how to create winning retail brands, how to create a unique, compelling brand even as you establish a rock-solid foundation for long-term success. Arthur Rubinfeld architected Starbucks' expansion from 100 stores to nearly 4,000, helping to establish Starbucks as one of the world's most-recognized brands.
Now, drawing on his singular expertise with Starbucks and as a consultant to Oakley, Gateway, adidas, and Washington Mutual, he offers breakthrough strategies and techniques for all facets of retail- choosing locations, recruiting management and associates, defining organizations and systems, designing stores, merchandising, day-to-day execution, and more.
Together with Collins Hemingway, coauthor with Bill Gates of Business @ the Speed of Thought, Rubinfeld introduces a proven, holistic approach to conceiving, designing, and executing your retail business plan- creating exciting concepts, growing them in local markets, preparing for aggressive expansion, and keeping the brand fresh and relevant as it matures. This revolutionary approach integrates strong personal values, exceptional creativity, the latest scientific methodology, and passionate customer service. Whether you're seeking to reignite growth or planning your first store, Built for Growth will be absolutely indispensable.
Retail brands that win, brands that last
A complete framework for retail success- conception, design, and execution
Imagination, courage, and drive
Start by believing- you can become a national or international brand
"Go long"- execute on rapid growth
Retail organizations and models that scale rapidly and "put the game out of reach"
Your retail presence- capturing the essence of your brand
From locations to store design- generating real customer passion
"Main & Main"- own the best locations and markets
From demographics to street traffic- all you need to know about choosing locations
Push the envelope- innovate to maintain brand leadership
How to reinvigorate product, design, service, and qualityover and over again
"Finally, a straightforward, insider's perspective on how retail success really happens. Arthur's incredible track record at Starbucks alone makes this a must-read for anyone thinking about starting, buying, or reinvigorating a retail business. Packed with insight, inspiration, and the practical tools to grow a business, Built for Growth won't disappoint."
Scott Bedbury, Author, A New Brand World
"Only five business plans in a hundred address a real customer need. Built for Growth shows retailers how to do more than just talk about serving customers; it is a step-by-step guide to building a business that provides an exceptional customer experience. As someone who has started several businesses, I believe that Arthur'sadvice will be invaluable to anyone starting a retail or service business."
Tom Stemberg, Founder and Chairman, Staples
"For someone who has been in the retail business for a long time, Arthur's book explains how established retailers can innovate while staying true to their core values and their core brand. It is unusual for a professional in Arthur's position to willingly share their expertise in such a comprehensive, succinct, and personal manner."
Marvin S. Traub, Former CEO Bloomingdale's; Current CEO Marvin Traub Associates, Inc.
"I have known Arthur since we lived in the same apartment building as young professionals just getting started in New York City. We have enjoyed a great personal as well as professional relationship. Arthur was one of the primary architects of Starbucks' strategic retail growth and development. His passion for retail, his knowledge of branding and design, and his heart for people are the main ingredients for his success at Starbucks, where he set the gold standard for high-quality, rapid retail expansion."
Howard Schultz, Chairman and Chief Global Strategist, Starbucks Corporation
Arthur Rubinfeld achieved breakthrough results for such premier companies as Starbucks, Oakley, Gateway, adidas, and Washington Mutual. In Built for Growth, he shares his unparalleled knowledge about envisioning, building, launching, expanding, and sustaining winning retail brands. The book delivers battle-tested advice for crafting retail plans that work, executing them systematically and aggressively, generating genuine customer loyalty, and innovating to keep your brand fresh, year after year. The lessons herein can mean the difference between success and failure. So whether you're opening your first store or you are an "old hand" in retail, don't just read this booklive by it.
© Copyright Pearson Education. All rights reserved.
Top customer reviews
This book is split in four parts, which each consist of 2-to-7 chapters. Each of the four sections covers a major aspect of retail strategy, following the order of business growth. "The book describes a new way of thinking about retail, an approach that embodies strong personal values, creativity toward concept, an artistic approach to design, a scientific methodology in finance and market analysis, and `old-time' customer service that seeks to personalize the experience." The book introduces a three-step approach that ensures the right combination of creativity and discipline. The holistic approach is to ideate, create, and execute, or as Rubinfeld expresses it - `ideatecreateexecute'. "Each problem and opportunity begins with ideation, follows with creation, and concludes with execution."
Part 1 - Make No Little Plans - is the largest part of the book and consists of 7 chapters. The first chapter discusses the link between "strong, core personal values and business values" and the complex subject of "brand", whereby it is important to note that "for retailers the store experience is the brand." It is emphasized that each new concept begins with idea generation (or ideation) which has to be on core value(s). These core values lead to corporate values, which lead to produce and store values, which leads to store branding, which lead to corporate branding, which reinforces corporate values, or "a self-perpetuating wheel of value, action, and perception." The next step in developing a concept is to ideate on the possibilities in the broadest possible way. Rubinfeld believes that the 2 most important steps toward differentiation are to make the concept both `authentic' (to ensure a niche) and `on trend' (to provide a customer base). "The first store should always be able to ground you in the values that first established your concept and your brand", whereby the two most critical elements are location and the presentation of store design. The third chapter concentrates entirely on the issue of locationing, which defines real estate in terms of branding. The proper design of the store completes the claiming of a powerful brand position through the physical manifestation of the brand and the fourth chapter takes you through the many design considerations. The fifth chapter provides a short discussion on the connection between design and brand, or the creation of a place where the customer wants to be. The following chapter introduces the first step in the art of merchandising, which "is to get the customer to notice you and take the first step ... into the store!" The brand must register and connect with the customer; it must strive to engage all five human senses. There are extremely useful guidelines at the end of the chapter on retail merchandising. The final chapter of this part focuses on customer service. "Customer service has a simple underlying premise: Put yourself in the customers' position." Rubinfeld provides fantastic advice on customer service and I could easily come up with 20 quotes from this relatively short chapter.
The second Part - Go Long - consists of 4 chapters and builds on the foundations introduced in the first part. The "go long" refers to the American football phrase, which means to throw long passes in an effort to move the ball downfield, score quickly, and demoralize the opposition. "In retail business, `going long' is a strategy designed to rack up points (profits) and quickly put the game out of reach of would-be competitors." The first chapter focuses on the strategic plan for the business should ideally be done during the creation phase. It does not have to be detailed and is best structured as a PowerPoint presentation (bullet points): Section 1 should begin with core values, mission statement, three-word mantra, and an analysis of competitive differentiation; section 2 should outline the strategic initiatives and strategic objectives; section 3 should describe a store development plant that implements the strategic objectives; and section 4 should review the financial results of the planned expansion, broken down by best, average, and worst case. This process should be reviewed on an annual basis. There are some useful questions to ask whether to ask before `going long'. The next chapter discusses the building of a team that can help the concept to `go long', whereby exceptional focus needs to be on matching motivation with values. The third chapter explains how you to `kick the economic model into gear' since it has to be robust enough to generate excess cash to power expansion. In the final chapter of this part each of the different options to expansion are discussed.
The third part - Own Main & Main - refers to an expression used at Starbucks' ("corner of Main & Main") to describe any urban street corner that offered high customer traffic counts, great visibility, and high-quality co-tenacy. Starbucks made use of a database report of potential markets, using high income and large population size as the primary criteria. This database report was combined with additional statistics, such as length of education (13+ years), to define top two market tiers. In the first chapter there is also a discussion on the hub-and-spoke expansion model. In the next chapter the authors focus on hot spots, oil stains (which refers to locations where lots of cars park), and the perfect location. The following chapter provides detailed examples of financial comparisons to ensure that the proposed location(s) will generate the necessary return on investment. After you have found the right property, you have to be able to lease if for a reasonable sum. "Real estate dealmaking is about `who needs who more, when'." This chapter is quite extensive since Rubinfeld has massive experience on this subject and introduces lots of possibilities.
The final part - Push the Envelope - shows how a retailer can maintain brand leadership over time. The phrase refers to the testing of high-speed aircraft, which predicted performance frequently takes the shape of a rectangular box. "Pushing the envelope requires constant innovation" and its lesson is two fold: Risk is necessary for reward and the risk must come as part of an overall plan. Rubinfeld also discusses in detail the 3 requirements of innovation, (1) license, (2) timing, and (3) demographics. Rubinfeld explains that retail is more than a job to him: "It is a mission... I am a brick-and-mortar guy... Most of all, retail has the one thing that no other company has ... the constant flow of people, of interaction in the flesh." He uses the final chapter to discuss the future challenges in the retail industry and provides some useful answers to these challenges.
Yes, this is a great book on retailing. Obviously, Rubinfeld uses his extensive experience with Starbucks to describe retailing and merchandising. Yes, there is a strong focus on growth and expansion which might not suit every mom-and-pop retailer. However, I do believe that this book also caters for them and provides useful advice on strategy, locationing, branding, pricing, and merchandising. It is full of great examples and the chapters can be used as checklist on the individual subjects. I do believe that the first chapter of the second part - Blueprint for Execution - is possibly the most important one since it puts everything else into context. Just remember to review that chapter on a yearly basis. Let's also hope that your competitors do not read this book before you do!
This is an otherwise informative excerpt but I do challenge one of its implications: That the information and counsel provided will be of greatest value only to those now involved in various stages of retail entrepreneurship. That is too restrictive. In fact, what is offered in this volume can also be of great value to decision-makers in other organizations which are now or hope to become business partners with retail merchandisers.
Moreover, I highly recommend this brilliant book to decision-makers in all other organizations (regardless of size or nature) which also need (1) to conceive, design, and then execute a brand (or brands) with sustainable appeal and increasing value; (2) to create an environment within which imagination, courage, and drive can be nourished; (3) to "go long" by executing a strategy by which to achieve rapid growth with business models that scale rapidly and thereby establishes market supremacy which puts "the game out of reach" from competition; (4) to dominate with the most appropriate POP "locations" which could include retail outlets, perhaps, but also catalogs, Web sites, telemarketing, couponding, and appropriate strategic alliances; and to "push the envelope" of brand leadership through innovation which invigorates product or service, design, customer service, and quality..."over and over again."
The material is carefully organized within four Parts: Make No Little Plans (Chapters 1-7), Go Long (Chapters 8-11), Own Main & Main (Chapters 12-15), and Push the Envelope (Chapters 16 and 17). Most of the recommendations provided in each Part are based on Rubinfeld's extensive real-world experience while serving as Starbucks' executive vice president, and, on Hemingway's equally extensive experience while serving as Microsoft's director of business development and international marketing. He is also the co-author with Bill Gates of Business @ the Speed of Thought. Of great importance to me is the fact that only about 20-25% of this book discusses principles and everything else focuses on implementation, execution, achieving objectives, performance, etc. Rubinfeld and Hemingway's intellectual rigor is evident throughout their narrative. Guided by sound theories and plausible hypotheses, they take a holistic approach while concentrating on specific mental and business models as well as strategies, tactics, values, and applications which are essential to sustainable business growth..."around the street or across the globe."
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