I just saw a great example of a company—the theater chain AMC—become irrelevant overnight. AMC is big so let me explain. AMC La Jolla Theater just north of San Diego has always had big lines and tons of business. Mary and I have stood in them for years. Then a month ago, ArcLight La Jolla opened with a vastly superior business model: Pre-selected seating, comfy seats, lush lobby and theaters, alcohol, better food options, more and friendlier employees.
Result? According to our eyes and an AMC employee, AMC La Jolla has lost half its business in one month. What was their response a month into ArcLight’s incursion into their territory? (After all, AMC had 18 months notice that ArcLight was coming.)
AMC simply hung a sign at its theater saying they had more comfy seats on the way. Sorry, AMC. Too little, too late. Kansas City-based AMC used to be a leader. Now it looks like a weak follower.
You have to prepare for competition like you’re going to war. When I had Tires Plus, we got 18 months notice that Sears subsidiary, National Tire Chain (NTB) was invading our home base of Minneapolis-St. Paul. What did we do? Took multiple competitive espionage trips to their stores in other markets and upgraded our stores and people to insure NTB had zero edge when they arrived. In addition, during NTB’s grand opening we had our biggest promotion of the year and slashed our tire prices. Result? NTB closed all five of their stores, packed up, and left the Twin Cities 24 months after arriving.
No matter how big AMC is (they were recently bought by a Chinese company), whomever the CEO of AMC is should be fired for being asleep at the switch. If what happened in La Jolla happens in other markets, ArcLight (or Icon or Alamo) will play Netflix to AMC’s Blockbuster.
In the meantime, Mary and I will enjoy our movie nights at ArcLight La Jolla.