The Old Invading the New: Competition Across Generations

If you have visited France and are like me, you have been completely impressed by the amazing French bakeries. Truly artisanal artistry with a great lineup of baked goods. You likely have also failed to notice that there are two kinds of them. One is the original kind where the baker handles every step of the process. The other is a modern kind using pre-mixed flours and fixed recipes from one of a few major brands—in other words, French artisanal franchise breads and pastries.

What makes this a case of competition across generations? That’s the topic of research by Laura Dupin and Filippo Carlo Wezel published in Administrative Science Quarterly. The idea is that both kinds of bakeries make the same kinds of goods, but the modern kind is standardized across locations rather than unique. Why should customers – and bakers – care about the difference? Well, the customers may be better at tasting the difference than I am. And the bakers may care more, because the modern kind know that they are giving up uniqueness and “personality” for an easier way of doing business.

What does that mean for competition? Bakeries are the kinds of businesses that care deeply about location, because the business (at least in France) involves the baker getting up crazy early to make breakfast-style goods, which nearby customers buy and carry home or to work. I have certainly walked past bakeries in France to get to a better one farther away, but there are limits to how far I will walk, and there are also limits to how far a local customer will walk. So, bakers want to be near to customers, and they may also want to be away from each other.

Bakers also think of how distinctive they are, and that’s where things get interesting. The modern style think they are less distinctive because, well, they are less distinctive. The traditional ones think they are more distinctive. That introduces an interesting dynamic. The modern kind wants to be located away from all others and, if possible, in the same place as an earlier (failed) modern kind. The traditional baker is more likely to be fine with locating near a modern one because they know they are distinctive and think that gives them an advantage.

Does this matter for other kinds of businesses? It should. Customization gives distinctiveness, and so do brand names. As goods move around more and more easily, industries become “nearer” all the time. In the modern age of easy comparison of products on platforms and in online reviews, the branded good may become more powerful than ever.

Dupin, Laura and Filippo Carlo Wezel. 2023. Artisanal or Half-Baked? Competing Collective Identities and Location Choice among French Bakeries. Administrative Science Quarterly, forthcoming.