Food industry is constantly growing due to improvement of national income and cultural level and customers are coming to the restaurant to buy in person and food is being produced and sold in the same place which is the reason why food industry is commonly called location industry due to its high dependence in location.
Thus, in order to start a business in food industry, locational decision is one of the most important factor the founder needs to decide.
Food service industry is now the most popular business for individuals and it can be said that more than 80% of the success of the business depends on location which implies its importance.
Good business area and location can be defined as a place with many potential buyers when having good transportation as road and bus line with good exposure of the store. Also, when stores in same type of businesses are gathered or becomes the stopping point to behavioral extension, it becomes a location that attracts the floating population. By selecting a good location, it can not only remind its location to potential customers without any advertising but also can prevent the risks beforehand by supplementing the lack of experience in starting a business in food service industry.
Thus, this study aims to provide basis of systematic analysis of location for prep entrepreneurs by actual analysis and location analysis theory.
In order to reach that aim, the study combined advanced research theoretical study and actual study then provided the factors of location analysis.
The actual study is the location determination factors for starbucks in Busan, coffee specialty store and the analysis was done by classifying the location factors into four. The four were accessibility, visibility, crowding and positionality.
When analyzing by each factor
First, when studying a store that has subway station and bus station in radius of 400m from starbucks, 47 stores out of total 48 were included and the rate was 97.9%. Also, stores in distance within 200m were 27.1% which took the highest proportion.
This implies the importance of accessibility where starbucks are located where people can easily come by walking or public transportation.
Second, visibility measures faying surface and when studying stores with more than two surfaces, 30 stores were in that out of 48 stores and the ratio was 67%. This brings out the store's exposure and definitely has an effect to attract the customers.
Third, for crowding, the standard was set where the congestion rate of similar business was 20 to 50%. For starbucks, such stores in that ratio was 38 stores out of 48 and the ration was 79.1%. Considering Busan being a touristic area, it showed that many stores were clustered in oceans or touristic area. For example, Gwanganri or Haeundae, Songjung, Dalmagi hill has so many coffee shops that it is called the coffee street. Also, it shows that areas with many floating population and business concentrated area are also examples showing the importance of crowding.
Fourth, for positionality, the study was conducted with stores located in movie theater, department store, discount store and starbucks located in terminal or train station. 19 stores out of 48 were applied and the ratio was 39.6%. Recently, with the increase of using coffee shops as stopping place during being out, stores with such purpose are increasing. Out of them the highest ratio was found in shopping mail, department store and market.
The conclusion that the thesis came up after analyzing starbucks in Busan with four location factors showed differences in order of accessibility〉crowding〉visibility〉positionality.
When it comes to location, those four factors are indispensable and as it showed its importance in starbucks in Busan, prep entrepreneurs must consider such factors when staring a business.