Question

Is there a difference between the location strategies of Starbucks and Tim Hortons? Please compare the location strategies at the two companies and provide references for your suggested answer.

Answer 1

Both Starbucks and Tim Hortons focuses on urban location. Most of the Starbucks and Tim Hortons shops are close to urban or metropolitan locations. Starbucks aims at locating its stores in the wealthy areas of Boston, Seattle, California, New York, and DC. The company has segmented its customers according to their financial capacity and age. The targeted financial capacity of the company is medium to high range, and very high range customers. Targeted age is 25-41, mostly in the metro polytan area. On the contrary, Tim Hortons's targeted financial segment is medium customers and medium to high range customers. Thus, it also chooses a few wealthy small cities along with big cities like Ontario, Atlantic Canada, Iqaluit, and Nunavut.

Starbucks uses demographic data to select its location along with the financial capacity of the locality. However, Tim Hortons is satisfied in testing out the zip codes with a similar characteristic of their previously established stores. It is also true that both the companies use logistics location demographic variables for selecting the location strategy.

Apart from a few differences, location strategy is almost the same in Starbucks and Tim Hortons.