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Fender have been pretty shrewd in having such a wide range of prices (ie starts at about £110 for the cheapest Squier) that they can 'capture' the bargain/beginner end of the market and hopefully some brand loyalty will mean a person who's played for 6 months or so and likes it, will upgrade and stick with Fender. No longer do beginners need to make do with guitars like Encore, Stagg, etc to begin on. So quite where the appeal of a non-Fender strat copy is, at the price there, I'm not sure.
Most people (myself included) can be easily fooled - show me an Encore with a Fnder Custom Shop neck plate and appropriate stickers on the headstock and I could hand over a couple of hundred for a £10 guitar!