business news in context, analysis with attitude

Just in the last few days, there have been two stories that suggested to us the ways in which companies can differentiate themselves by looking for the unusual opportunity.

  • It was announced last Wednesday that FedEx Corp. will acquire Kinko's for $2.4 billion, giving the shipping company a major presence - 1,200 stories globally - that goes beyond its traditional business.

    "The FedEx and Kinko's combination will substantially increase our retail presence worldwide and will enable both companies to take advantage of growth opportunities in the fast-moving digital economy," said Frederick W. Smith, chairman, president and CEO of FedEx Corp. "Our two companies share a similar background, culture and customer focus, and that common ground is extremely important as we prepare for future growth and success."

    "Kinko's successful transformation from traditional copy center operator into a global, digitally-connected provider of an array of valuable business services reflects the outstanding efforts of the company's exceptionally talented leadership team and team members," said George W. Tamke, chairman of Kinko's.

    All 1,200 Kinko's locations worldwide - including more than 400 that operate 24 hours a day, seven days a week - will offer new or expanded FedEx shipping options for greater customer convenience, in addition to the traditional copying, printing, computer and other services that they offer consumers and businesses.

  • The New York Times yesterday featured a piece about Barnes & Noble, which has managed to surprise the markets with a string performance despite competition from the likes of Wal-Mart and Costco.

    One of the interesting tidbits in the piece: that best-sellers, which are the focus of the discounters, actually are just five percent of Barnes & Noble's sales.

    The company also has continued to grow by engaging in e-commerce, as well as by investing in a private label publishing operation that allows it to print both classics and original titles at competitive prices - which gives the retailer the ability to both differentiate itself and keep its prices and costs down.

KC's View:
We think there are lessons to be learned in both examples…

FedEx understands that it needs to extend its brand and brand equity into new and related areas, and the Kinko's deals seems like a smart one to us. We've been known to live at Kinko's when we're in cities where our hotel doesn't have high-speed Internet access…these outlets are lifesavers for people like us. Connecting the FedEx brand to it seems like a smart move.

As for Barnes & Noble, we like the notion of differentiation and private labeling…and think that the idea that best sellers only represent five percent of sales is an intriguing one. Maybe that's an approach that more mainstream supermarkets ought to embrace - since you have discounters dominating the "best seller" category in food, find a way to get consumers to embrace the other stuff that they don't know about, haven't tasted, but might actually like.