Coffee Shops in San Francisco
1 San Francisco, California
Starting a city on a relatively small piece of land would be
disadvantageous, common wisdom would lead one to believe. However, the city of
San Francisco has thrived with these close quarters and the city has become a
center of trade for not just northern California, but for around the world.
Relying on high tech industries and a large service sector, the city has become an economic force. To fuel the constant
stream of capitalism, coffee is integral to the city’s way of life. Two coffee
shops owned by a pair of friends want to see if they can thrive on the peninsula
without directly competing with one another.
2 Location
While only being separated by a few miles, Store 1 and Store
2 reside opposite from one another. Store 1 is located in the northern quadrant
of San Francisco while Store 2 occupies the southern part of the city. Store 1’s
mean center, the average location of each of the store’s total customers, is
closer to the main coffee shop compared to Store 2 which has a farther range of
customers. Therefore, in regards to customer accessibility, Store 1 has a more favorable location due to its more central location and being at the intersection of major highways that are the backbone of the city.
The following map shows where each store is in San Francisco, represented by the orange coffee symbol. Store 1 is in the north, while Store 2 lies to the south.
This map shows the approximate driving/walking distance to the store for the average customer.
3 Market
Store 2 is located in a locale where the median household
income for 2015 is higher than Store 1’s geographic area. In the 80th
percentile of Store 2, the median household income is $90,171 compared to $59,115
for Store 1 in the north. Store 1 also has an area with 76.2 of possible customers
working white collar jobs. Store 2 on
the other hand has 66.0% pf its potential customers working white collars jobs,
with a larger service sector.
The following map shows the customer derived trade area. Each level highlights a certain portion of the areas demographics ranging from economic to social data.
4 Competitors
Store 2 is in the envious position of having few competitors surrounding it. With not a lot of competition around the coffee shop, there is a lot of room for expansion. Store 1 on the other hand is located right next to a large cluster of coffee and donuts shop to the east. This drastically limits what Store 1 can do in the way of expansion and will most likely remain stagnant with its customer base. Or worse yet, it could shrink due to the fierce competition.
The following map shows where comparable businesses are located in the San Francisco area. Note the large cluster of coffee and donuts shops in the northeast.
5 Conclusion
If current trends are to continue, there is no reason for there to be a poaching of each others customers and both owners should be able to coexist with one another. Store 2 targets a wealthier audience. This same wealthier audience also happen to be families with children. In the 0-80 section of Store 2, 57.4% of households are family based. Compare that to Store 1's 27.5% of households that are family based. While both stores have different targets for customers, Store 2 is positioned to grow better than Store 1 due to a lack of competitors and wealthier surrounding area.
