Case Study Starbucks

1. Evaluate the decision of Kim and Andes to open a coffee shop in Korea. Is a coffee shop a good fit for them as entrepreneurs? Is Korea the right market for yet another coffee shop? How are theytrying to quantify what seems like a personal decision? What other things should they be considering before making a final decision?

• Kim and Andes have a great idea of opening a coffee shop inKorea because Korea’s coffee shop market is enormous. Also because a coffee shop is where people spend all day long studying or even socializing without any concern. It is clear that many Korean studentswere moving from libraries to comfortable coffee shops to study, take a brief nap, meet with friends, drink coffee and eat light snacks. The size of the college market was too large for Kim and Andesto ignore. Coffee is what helps get Koreans to work on time and stay awake on the afternoon. However, coffee shops are often referred to in Korea as the third place. Your home is where your familyis, work is where you earn a living, and the coffee shop is the third place where they escape the pressures of the other two. They agreed that this meant even non-coffee drinkers could find reason toenjoy all the kind of coffee shop had to offer, therefore they decided that this could be a sustainable business



2. Given that Kim and Andes seem to be set on opening a coffee shop in Korea,what factors should influence their mode of entry decision? What are the trade-offs between franchising and other choices?

• Franchising seems the logical path to take in this situation. It's asafer business venture and the key advantage of this is being backed up by a big brand and the recognition the name has (if it is a popular brand). A big factor that they should analyze is what costumersprefer, do they prefer playing it safe going to the same place every day to get the same product, or are they desperately seeking a new place with new menus and a new focus? Surveys are an...