An Empirical Analysis of Coffee Franchise Location Strategies: Evidence from Gyeonggi Province

This article examines the location strategies of coffee franchises in Gyeonggi province. Due to its large population, broad area, and diverse industrial structure, Gyeonggi province is an ideal dataset for empirical testing of the location strategies. We collect the addresses of five major coffee franchises stores, convert them into geographic coordinates using Google Maps Geocoding API, and compute Haversine distances both between stores of the same franchise and between stores of different franchises. This novel approach leads to three discoveries. First, coffee-consuming age population is positively related to the number of stores and more strongly for commercial areas with a large floating population. Second, one third of Starbucks stores have another Starbucks store within a radius of 300m, which empirically confirms the 'Focused Destroy Strategy' of Starbucks that has multiple stores in central business districts. Third, for 80% of Starbucks stores, we can find Ediya stores within 500m, which supports Ediya's 'Next-to-Starbucks Strategy'. Our research methods can be efficiently applied to the analyses of other retail businesses such as convenience stores, fast food restaurants, and mobile phone shops.