Fender's issue has nothing to do with not offering the right colors or options. Fender's issue is they're making their $300 instruments as good as (if TalkBass members are to be believed) their $1,000 instruments. Or at least close enough that $1,000 instruments aren't worth the price to enough people.
Result: they're sabotaging their own business. There simply aren't enough customers to generate a healthy profit if they're selling too many $300 instruments and not enough $1,000 instruments. They would be smart to cut back on the Squier line to try to push customers upmarket.
I must respectfully disagree, but please bear with me on this. I'm gonna go out on a limb since I'm not affiliated with Fender/Squier in any way (save for being a customer), nor do I have any inside information on their inner workings. This is just my take on them upping their game in the entry-level market alongside the tightening-up of their cross-the-board quality control.
I believe FMIC creating a quality product at an affordable level is an investment for the future.
If lil' Johnny (age 12) says, "Mommy…Daddy…I wanna learn to play guitar!" (or bass or whatever) Mommy/Daddy help lil' Johnny in some way (allowance, chores, selling papers, birthday, Christmas, rewards for good grades, etc…) to get a Squier instrument off the rack at a local store, along with gear, a set-up and all that jazz.
Now, for the sake of the argument, let's assume lil' Johnny doesn't lose interest, sticks with and excels at playing his instrument of choice.
Here's what I suspect Fender is banking on; If lil' Johnny has something well-made in his hands as he's learning his craft, and the time has come for not-so-lil' Johnny to step-up his gear-game, FMIC is betting he'll look to the company that did good by him when he was just a beginner. And if that instrument was utter crap…and I mean a fussy, unplayable turd…he will likely, even more than before, look elsewhere for his future upgrade to a higher-quality instrument.
[climbs up onto his soapbox]
I may not have an M.B.A. from some ivy league school, but I did have a long-term tenure with a certain video rental chain that has practically gone the way of the dodo bird. From this experience, I can say honestly say…
Smart business looks, not just to the bottom line of that year or two, but to the distant future of the enterprise!
Shortsighted decisions and hack-&-slash production cuts in the name of "efficiency" (which often translates into "short-term profits, followed by long-term infrastructure damage") are the hallmark of modern CEO's. Unfortunately, and all-too-often, their interest in a company only goes as far as the length of their contract and the size of their golden parachute.
They have no investment in the long-term survival and prosperity of a company, only something to polish their resume so they can jump ship to another CEO position somewhere else.
If the previous company flourishes, they can brag about it's success, even if they had nothing to do with it. If it sinks, they can claim it happened after they left the company and is no reflection on their performance.
[/soapbox]