Analysts are amusing at times. So they speculated not that long ago that Facebook was going to challenge Amazon.com as a retail destination? On what planet was this going to happen?
Sure, and Amazon.com was going to challenge Google (A9!), and Amazon was going to challenge eBay in auctions, and Google was going to challenge PayPal (Google checkout!) and Microsoft was going to challenge Google (Bing!) and Microsoft was going to challenge Intuit (Money!) and Microsoft was going to challenge Oracle (SQL Server, Great Plains) and Facebook was going to kill Twitter, and Microsoft was going to kill AOL with MSN, and and and and.
Who knew it's apparently so difficult to conquer the entire planet? Next you're going to tell me that people don't want their car oil changed by McDonald's.
You shouldn't need a marketing guru to know about the basics of positioning and branding. Facebook is trying to be everything to everybody. They're not going to succeed - not because they're not good at this or that, but because you just CAN'T be the best at everything in the mind of your customers. Like shingen said, people aren't going to want their car oil changed at McDonald's - not if they have a choice.
Line extension is a tricky business. The good news is: this opens up a lot of opportunities for startups.
Walmart is very nearly everything to a lot of people. People do get oil changes, fast food, haircuts, furniture, household goods, food, banking, prescriptions, movies, games, sporting goods, gardening supplies... The list goes on. Convenience trumps almost anything.
And yet Walmart doesn't dominate haircuts at all, America is filled with a network of 20,000 hair salons that outsell the hair salons in Walmart. People usually have to schedule appointments with their hair salon - that is not maximum convenience, it's maximum value. There are more banks outside of Walmart than inside of Walmart, and that will continue to be the case. Walmart is an extremely small part of the US furniture market. And so on.
Walmart wanted to take over the gasoline fill-up market. What could be more convenient? Instead, gas stations have thrived living near Walmart, because convenience doesn't always maximize value. Gas stations draw people with gasoline, and make money on in-store purchases; that model didn't work for Walmart, because gasoline doesn't draw people to spend an hour shopping at Walmart, so the value-add was non-existent.
The notion of extreme convenience fails as often as it succeeds in my opinion. It's why Walmart doesn't own every category. It's why GameStop exists. Specialization can just as easily trump maximum convenience, you have to offer enough of a value proposition. It's why Starbucks and Apple Stores exist; it's also why dollar stores are thriving. It's why Dunkin Donuts and Krispy Kreme exist despite Walmart selling donuts.
Obviously Walmart doesn't manufacture the drugs in the prescriptions; they don't have a banking license; they don't make movies or games; they don't cut your hair; they don't run the food franchises (eg Subway); they don't make furniture; they don't make the groceries.
Walmart is merely a retailer, and with their physical space they sometimes act like a mini mall. They don't even own their shipping network any longer. That is not Walmart being everything to everybody. Quite the opposite, they're admitting they can't be, so they let other companies ride their coattails to optimize their sales per square foot.
Uh ok. I didn't say Walmart dominated haircuts in the US. I didn't say Walmart dominated gasoline. I didn't say Walmart dominated donuts. I didn't say Walmart manufactures their own drugs or operates as a bank or directly employs the barbers there.
What I said was that for a lot of people, Walmart is where they go for nearly everything. There are a lot of places in small town America where a Walmart moved in and a lot of the existing local retail and service businesses shut down. It doesn't have much to do with positioning or branding. It's just really easy to get everything done there.
The point is, it's possible. If Walmart can do it, maybe Facebook can too.
Sure, and Amazon.com was going to challenge Google (A9!), and Amazon was going to challenge eBay in auctions, and Google was going to challenge PayPal (Google checkout!) and Microsoft was going to challenge Google (Bing!) and Microsoft was going to challenge Intuit (Money!) and Microsoft was going to challenge Oracle (SQL Server, Great Plains) and Facebook was going to kill Twitter, and Microsoft was going to kill AOL with MSN, and and and and.
Who knew it's apparently so difficult to conquer the entire planet? Next you're going to tell me that people don't want their car oil changed by McDonald's.