The Knitting Factory Barcelona

The Knitting Factory - Barcelona

Introduction

This report sets out to define the product set and the corporate values for a new The

Knitting Factory subsidiary in Barcelona according to those of the Knitting Factory New York.

Furthermore, the industry is analyzed to figure out whether there is any potential

competitive advantage.

Findings

The Knitting Factory New York

The Knitting Factory was opened in 1987 by Michael Dorf and Bob Appel. Michael Dorf founded the location on Houston Street between the Bowery and Broadway. At first, the venue was an old, dilapidated kind of „mess“ with yellow painted plaster chipping off the walls and a rotted wood toilet. Step by step Dorf developed this location to a well-known pub which was supposed to be an art gallery with a performance space and also a cafÐ"© which offers interesting forms of food such as fondue with fresh fruit. The Knitting Factory primarily became a Showcase with experimental music.

During the dot-com era Dorf created KnitMedia to sell records including songs which were played in the Knitting Factory pub.

Furthermore the number of employees increased to over 100 working in a pub in New York or Hollywood or in the european office in Amsterdam.

The Knitting Factory offers quite a lot of services and Products. Firstly, they offer the possibility to view the stage online for $2. Furthermore, guests have the opportunity to book the rooms of the Knitting Factory. The music played in the club is experimental music which canвЂ?t be related to a certain category of music, neither jazz nor rock. The Knitting Factory is not only a club, itвЂ?s in fact an art gallery with a performance space and a cafÐ"©. Additionally the club has three record labels (Instinct Records, Shadow Records, Evolver).

The Knitting Factory wants its guests to be happy and enjoy the time in the club. Therefore, they greet people at the door, sit them down, get their entrance fee and ask what they want to eat or drink. Furthermore, they offer jazz pictures, knitting factory radio series, festivals and there has been a european tour to also reach people outside the US.

The Knitting Factory Barcelona (KF BCN)

It is not Michael Dorf’s intention to duplicate the first Knitting Factory. He has to do local changes and in other words, adapt to the local needs and desires of the potential target group. But, nevertheless the KF BCN has to fit within the whole concept.

Therefore, the core product of the Knitting Factory Barcelona has to be the same as in New York. They should focus on new experimental music and support local artists. Besides the KF BCN should also offer drinks and food. But concerning the drinks and the food, it’s important to adapt to the Spanish flavor.

Another possible feature of the KF NY that could also be introduced in Barcelona is the record label. This feature could become the USP, because none of the competitors offers a comparable service.

A very significant adaptation the Knitting Factory has to focus on in Barcelona is the relationship to the customers, because Spaniards set a high value on personal relationships. Therefore, a good product to add would be a paid customer card which provides several advantages for the owner, like special conditions for drinks or a reduced entrance fee.

Vision

The Knitting Factory Barcelona empowers new artists to achieve their full potential and realize their dreams. Through the Knitting Factory Barcelona people (throughout the world) can get to know a new modality of enjoying art.

Mission Statement

Barcelona вЂ" the first step to capture the European market

Barcelona, a city with modern and open-minded inhabitants, which has the opportunity to be the trendsetter for The Knitting Factory in Europe. With a location in the heart of Barcelona, close to the Avinguda Diagonal, easy approachable for the customers. The promotion of local artists will augment the interest of potential customers. To ensure a consistent image of the Knitting Factory the marketing and the financial control will remain to the home business in the US.

Objectives

The main objective for the KF BCN is successfully entering to the market, which includes creating a unique location, acceptable contracts with suppliers, convince the customers of the concept and enlarge the network of musicians.

A further short-term goal is to become profitable through optimizing the concept and flexible reactions to the desires of European customers.

Industry analysis

To evaluate the profitability of the market and find out if the KF BCN could have any competitive advantage, XX other locations have been analyzed (see exhibit 1).

It was found that none of them offers the same range of products. All of them are specialized on one or two products, but there services are not so broad.

Porter’s 5 forces model of competition

To analyze the potential profitability of the KF BCN it is important to analyze the determinants that influence the profitability of the market.

New Entrants

There is a low threat of potential new entrants due to several facts. Firstly, there already exist many bars and clubs in BCN and therefore the market is rather saturated and only a really innovative and creative idea could stimulate the market. Secondly, the barriers to entry are high on account of many licenses that have to be applied for and high capital requirements. The capital requirements include both costs for licenses and costs for the location, the equipment and the staff. Furthermore, it has also to be taken in to consideration that it takes a long time to negotiate the terms for the contracts with the suppliers.

Substitutes

If the focus is on a really direct substitute to the KF, there are no substitutes, because there is no location in Barcelona which offers the same range of products. But, of course, also the locations which offer part of the products of the KF can be seen as possible substitutes. In terms of this view there is