From time to time, I love to create deepdive analysis using data and business strategies. In this case, for this analysis, I considered a surprising announcement last week: the first Starbucks will be opening in Ecuador. It's surprising considering this chain has more than 35,000 stores worldwide and they are just going to open the first one in Ecuador.
Leveraging the power of data, I will present a summary of different strategic scenarios where a coffee shop chain like Starbucks could attract the highest number of customers.
𝐈𝐝𝐞𝐚𝐥 𝐨𝐩𝐭𝐢𝐨𝐧 𝟏: 𝐓𝐡𝐞 𝐬𝐭𝐫𝐚𝐭𝐞𝐠𝐲 𝐨𝐟 𝐩𝐨𝐚𝐜𝐡𝐢𝐧𝐠 𝐜𝐥𝐢𝐞𝐧𝐭𝐬 𝐟𝐫𝐨𝐦 𝐝𝐢𝐫𝐞𝐜𝐭 𝐜𝐨𝐦𝐩𝐞𝐭𝐢𝐭𝐨𝐫𝐬 - 𝐐𝐮𝐢𝐜𝐞𝐧𝐭𝐫𝐨
The obvious location strategy would have been to set up near Quicentro Shopping. Data shows there are more than 5 similar chains in this area, such as Juan Valdez Café or Sweet & Coffee Sweet & Coffee. It would have been the perfect place to steal customers from close competitors.
𝐈𝐝𝐞𝐚𝐥 𝐨𝐩𝐭𝐢𝐨𝐧 𝟐: 𝐓𝐡𝐞 𝐬𝐭𝐫𝐚𝐭𝐞𝐠𝐲 𝐨𝐟 𝐭𝐚𝐫𝐠𝐞𝐭𝐢𝐧𝐠 𝐡𝐢𝐠𝐡-𝐭𝐫𝐚𝐟𝐟𝐢𝐜 𝐚𝐫𝐞𝐚𝐬 - 𝐀𝐯. 𝟏𝟎 𝐝𝐞 𝐀𝐠𝐨𝐬𝐭𝐨
If they aimed to capture high traffic areas, streets like Av. Republica, Av. Atahualpa, and Av. 10 de Agosto would have been perfect locations. These streets have the highest flow of vehicles and rank in the top 10% of the city's most visited streets daily. However, the target audience was not present in the area, making it less than ideal.
𝐈𝐝𝐞𝐚𝐥 𝐨𝐩𝐭𝐢𝐨𝐧 𝟑: 𝐓𝐡𝐞 𝐬𝐭𝐫𝐚𝐭𝐞𝐠𝐲 𝐨𝐟 𝐭𝐚𝐫𝐠𝐞𝐭𝐢𝐧𝐠 𝐚𝐫𝐞𝐚𝐬 𝐰𝐢𝐭𝐡 𝐭𝐡𝐞 𝐡𝐢𝐠𝐡𝐞𝐬𝐭 𝐬𝐨𝐜𝐢𝐨𝐞𝐜𝐨𝐧𝐨𝐦𝐢𝐜 𝐩𝐫𝐨𝐟𝐢𝐥𝐞 - 𝐒𝐜𝐚𝐥𝐚 𝐒𝐡𝐨𝐩𝐩𝐢𝐧𝐠
Based on data, Scala Shopping hosts the most expensive brands in the city, with over 10 luxury brands. In addition, it is located in the heart of the city's upscale neighborhood in terms of earnings per person. Given Starbucks' mission to position itself as a high-end chain in Latin America, this is the perfect location.
At the end, the chosen location was at Scala Shopping in Quito (from several non official sources), a well-established mall in one of the city's most exclusive areas. Based on this data, it's evident that Comunidad Delosi, the group behind this expansion is leveraging the last strategy for the first Starbucks store in Ecuador. Establishing a new chain location is not cheap, and commercial premises represent around 20-30% of a restaurant store expenses. Therefore, opting for a secure strategy is the best decision at the beginning of the business. Let's not forget that everything revolves around "location, location, location" and data is showing the group took this into account.
Furthermore, there are hundreds of other interesting city locations. Where do you think is the ideal location for this brand? Leave any thoughts in the comments.
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