Cornering the market

Today, there is a feature story on Starbucks (SBUK) by the Associated Press (AP) that chronicles how the coffee chain giant is pursuing an aggressive expansion plan globally.

My breath was practically taken away when I read through the article which has been carried by most major newspapers around the world.

The coffee chain is not satisfied with simply opening new stores in corners of the world that have yet to embrace its green awnings.

Part of its on-going strategy is to open new stores which may even be located within a stone’s throw of existing stores.

The AP story describes how in Seattle’s tallest building, there are two Starbucks stores on the first and 41st floors. Moreover, there is a third store across the street from this building.

But there is more … Starbucks is even planning to install vending machines in places where the company cannot open regular stores.

While it is natural for the company to want to expand this way, Starbucks must also have cast a wary eye on other chains that had tried to expand aggressively but with mixed results. So, in coming to this decision, the planning must have been very thorough indeed.

What I’ve learnt from this story is the strategy of giving enough choices to their customers. Not only do coffee drinkers traditionally be able to choose between coffee blends but they can now choose between Store A on this side of the road or Store B on the other side of the road or even Store C which is a drive-through store.

But ultimately, whether people go to Store A, B, C or Z, Starbucks is the winner. This strategy ensures a win-win situation for both company and customers.

The strategy of offering solid choices is as old as the hills but it is still effective today. And you know what? Every time it works, no matter the industry that implements it, we still marvel at it.

Disclaimer: This article is not an advertisement for Starbucks. I’m not even a great coffee drinker, preferring local-brewed Malaysian kopi-oh. It’s just an unsolicited observation of their marketing strategy based on the Associated Press report which you can read here, here and many other places on the Internet.

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2 Responses to Cornering the market

  1. says:

    This is what we call as “Tembak” semua marketing.

  2. says:

    I just came back from a business trip from Bangkok. What you wrote is true there, there is a Starbucks in every building I was in and the buildings were just next to each other!

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