Selecting Location of Service Facilities: Siting Strategy of Starbucks in Korea

In this study, we illustrate the siting strategy of service facilities via case study on Starbucks’ success in Korea market. Starbucks achieved to settle down new coffee culture in Korea and dominated home market, gradually expanding to nearby regions and eventually to all over the country. The paper regards Starbucks’ successful entry to the new market was possible due to the meticulous Siting Strategy, as Starbucks fulfilled ‘First Mover Strategy’ by securing the optimal business district along with the best location within this district. This study underlines the location of firm’s first branch and illustrates how Starbucks achieved this via ‘Focused Destroy Strategy’. Also, main considerations for selecting location are explained in detail. This paper then analyzes the characteristics of Starbucks’ location in Korea and specifically investigates Starbucks no.1 store in Myeongdong downtown to show what the first store means to the firm and how it influences the expansion or success of the firm. Finally, we discuss some future plans so that Starbucks can keep its competitive advantages over other coffee shops hence retain their customers.