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Competitive Strategy of Starbucks Location Placement

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Let's look at Starbucks. As most people are aware, Starbucks regularly places multiple coffee shops in a close vicinity to one another, so you might see four Starbucks stores within a very narrow space (especially in downtown, city areas). One company in DC, that has multiple elevator stops, sports a Starbucks on four floors of their 50+ story building... What type of strategy do you think is? Do you think its smart? Why or why not? Can you provide other examples of companies that are clearly utilizing some type of identifiable strategic plan? (hint: Look at Wal-Mart, or other retailers for ease).

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Starbucks will place multiple coffee shops in such close vicinity for several strategic reasons. In my opinion, the top two reasons are to increase barriers to entry and to eliminate the competition (at least for that area). Starbucks are not franchised, so even though it goes against the traditional mindset to place the same stores so close together, it doesn't cause competition or reduce value with Starbucks as all locations are owned by Starbucks. Another strategic idea behind these multiple close locations is to keep that "close" feeling where people are familiar with one another. It is not uncommon for baristas to know their customers by face, name, and even order. Although non-traditional, this is a competitive ...

Solution Summary

This answer looks at the strategy employed by Starbucks when choosing locations in a close proximity to one another. It also explores strategies employed by WalMart for similar reasons.

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