Trying to create a stir

OPENING A COFFEE SHOP IN KOREA

Case Synopsis

 A critical question for entrepreneurs starting a business, particularly in a foreign country,

is choosing whether or not franchising is the appropriate mode of entry. Franchising offers
the entrepreneur instant brand recognition, established business processes and supply
chains, regulatory and tax guidance as well as a ready supply of assistance in the early
months; however, it deprives the entrepreneur of what many of them crave — the ability
to create and grow a business from one’s imagination. The two entrepreneurs in this case
had regular salaries, but wanted to try their hands at opening a coffee shop — or a chain
of coffee shops — in South Korea, which already had many brands with multiple outlets.
 This case describes the challenges facing two business professors, Min-Guk “MG” Kim and
Kevin Andes, who were also friends. They knew that if they bought a coffee shop
franchise, they would almost certainly grow it into a successful business given their skill
sets and experience; however, they also feared being a late arrival to a mature market
that seemed to have commoditized the coffee shop experience. What did they need to do
to set themselves apart?
How Koreans Pronounce Coffee

 coffee was pronounced copy

 What impact this pronunciation has on the decision to open a coffee

shop in Korea? Or with the product category itself!
Students and Coffee shop

Unlike the restaurant or cafeteria, the coffee shop doesn’t push their customers to
leave as soon as possible. In the Korean restaurant, they bring some free, small
dessert to their customers who are spending a long time there. It looks like a gift from
the restaurant, but it means, ‘please get out of our restaurant as soon as possible.’
We think the coffee shop is the place where we can spend all day long without any
concern from the clerk
Coffee Shops in Korea

 Why Koreans visit coffee shops?

 How it is different from other cultures like USA, Europe?

Education and Korean Economic
Miracle

 Korean Economy

 Consumer purchases and coffee consumption

 How Korean study and what relations does it have with coffee?
Pouring over the Numbers- Coffee
Market

 Coffee shops in Korea and competition

 Location of Korean Coffee Shops

 Korea and modes of entry

Has the cup runneth over? Coffee
Market

 Marketing data and Korean coffee marketing strategy

 Tough choices: differentiation and Brand

Discussion Question 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
they trying to quantify what seems like personal decision?
What other things should they be considering before making a
final decision?
 Muqadas, Maryam, Amina, maria, M abdullah

 Conduct a SWOT analysis to value the decision of opening a coffee shop

in Korea
SWOT

 Strengths
 Previous entrepreneurial experience,
 Business acumen,
 Local knowledge of Korea,
 Knowledge of and access to students, an important market segment,
 Access to capital.
SWOT

 Weaknesses
 No coffee shop management experience,
 No retail experience,
 Employed full-time elsewhere,
 No brand awareness.
SWOT

 Opportunities
 High current demand for the product,
 Increasing demand for the product.

 Threats
 Tremendous competition,
 Growing sense that the market has commoditized,
 Price pressure in the student market.
Discussion Question 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?

 Good market but wrong mode of entry

 Good mode of entry but wrong market
 Results in disaster
 Balance between risk and control
Discussion Question 3

 If Kim and Andes decide to open their own coffee shop (i.e. not
a franchise), what can they do to differentiate it from all the
existing market entrants?

 List down the ways to differentiate

 Which segment they should target?
What actually happed!!!

 Opened an independent coffee shop in University targeting the

university students