Do coffee chains have strategic superiority? An examination of the intra-regional and size strategies of coffee chains

Abstract

This study explored the intra-regional and store size strategies of coffee chains using big data from Seoul, Korea. The results show that the multi-locational capabilities of coffee chains lead to a competitive edge through intra-regional and size strategies, resulting in substantially longer survival than independent coffee shops. In addition, intra-regional diversification surpassed intra-regional specialization, although size standardization outpaced size adaptation for coffee chains. Thus, a combination of intra-regional diversification and size standardization worked best. Additionally, when the market leader, Starbucks, was present in the same region, the representative brand’s survivability was examined by employing the intra-regional and size strategies framework. Surprisingly, Ediya, the benchmark brand for the intra-regional diversification and size adaptation group, outperformed other competition brands regardless of Starbucks being present in the same region. Hence, it would be a better strategy to avoid to direct competition against the market leader in terms of region and size strategy.