A Study on the Store Opening Strategies of Major Coffee Shop Brands in Seoul, Korea

According to the 2023 National Service Industry Survey of Statistics Korea, the number of coffee shops is 106,452, one shop per 481 people, indicating a saturated market. International brands such as Starbucks, Blue Bottle and Tim Hortons expand in a serious manner. In this situation, analyzing the expansion strategies of existing coffee shop brands can help prospective investors minimize trial and error and provide business strategies to a successful expansion. Expansion strategies of five brands-Starbucks, Twosome Place, Mega MGC Coffee, Compose Coffee, and Paik’s Coffee were analyzed using one-way ANOVA and K-means clustering analysis on 190 pairs totaling 950 observations. Each expansion strategy was categorized into Porter’s four strategic types (Cost leadership, Differentiation, Cost-Focus, and Differentiation-Focus). The results categorized the expansion strategies as follows. Starbucks was classified as having a differentiation strategy according to both one-way ANOVA and cluster analysis. Compose Coffee and Paik’s Coffee were identified as pursuing a cost leadership strategy by operating at low rental locations. This study contributes to the development of store opening strategies for both domestic and international coffeehouse brands that are replacing closed stores of non-brand local coffee shops.