- Log In/Sign Up
- P-ISSN1738-3110
- E-ISSN2093-7717
- SCOPUS, ESCI
ISSN : 1738-3110
Imitation as a Viable Strategy: The Case of Ediya in Korean Coffee Franchise Industry
Abstract
Purpose - The purpose of this study is to examine the viability of imitation strategy. Imitation strategy is one of the strategic options that a late mover can choose, and by selecting the strategy, the company imitates key elements of the business model of first movers, and modifies them to suit its conditions. The author attempted to explain how the elements of first mover's business models were creatively adapted to suit the conditions of late movers so that they can secure market position face-to-face market leaders. Research design, data, and methodology - For the purpose of the study, Korean coffee franchise industry was selected to compare the strategies of first and late movers and to discuss imitation strategy in detail. The author conducted in-depth case study of first mover and business model innovator Starbucks and Ediya Coffee, one of their imitators. The paper examines how Ediya has imitated and modified the business model of Starbucks to secure its unique competitive position in domestic market by using value chain and generic strategy analysis. Results - Starbucks and Ediya were compared in terms of their interior design, the price level of beverages, the variety of side dishes, and shop locations. Starbucks have invested interior design heavily to shops, offered diverse beverages and side dishes with relatively high price, the shops are located in central areas, whereas Ediya has concentrated on achieving cost leadership in all value activities as maintaining the quality of key products. Ediya succeeded in achieving best-provider strategy, in which it enjoys both cost leadership and differentiation advantages, largely by the strategic alliance with the biggest coffee manufacturer, Dongsuh Foods in Korea. Conclusions - Though Ediya is the imitator of Starbucks, it has modified Starbucks business models and succeeded in providing the 'third place' experience for budget-minded customers. Ediya has also succeeded in benefiting its franchisees by lowering costs and simplifying the various tasks of coffee shop management. Due to these factors, Ediya could become one of the largest number shops as the coffee franchise in Korea.
- keywords
- Imitation, First Mover, Late Mover, Business Model Innovation, Creative Adaptation
Reference
Brandenburger, A. M., & Nalebuff, B. J. (1996). Co-opetition:A revolutionary mindset that combines competition and co-operation: the game theory strategy that's changing the game of business. New York, NY:Currency/DoubleDay.
Carpenter, G. S., & Nakamoto, K. (1989). Consumer preference formation and pioneering advantage. Journal of Marketing Research, 26(3), 285-298.
Chang, S. (2014). Business strategy (8th ed.). Seoul, Korea: Parkyougsa.
Cho, D. S., Kim, D. J., & Rhee, D. K. (1998). Latecomer strategies: evidence from the semiconductor industry in Japan and Korea. Organization Science, 9(4), 489-505.
Cho, J., & Lee, S. (2011). A study on the activation plan of domestic franchise companies third party logistics. The International Journal of Industrial Distribution & Business, 2(2), 15-24.
Chosun Ilbo (2017, January 11). 2017 franchise: the strategy of number one coffee franchise. Chosun Ilbo, Retrieved from http://biz.chosun.com/site/data/html_dir/2017/01/11/2017011101804.html.
Chun, T., & Park, N. (2016). A study on image positioning strategy of coffee shop. Korea Logistics Review, 26(3), 91-100.
Duggan, W. (2015). The seventh sense: how flashes of insight change your life. New York, NY: Columbia Business School Publishing.
Feng, Z. (2016). The effect of the products review on consumers’ response. The International Journal of Industrial Distribution & Business, 7(2), 13-20.
Forbes Korea (2017, March). Korea’s good workplaces (12), Ediya Coffee. Forbes Korea, 136, Retrieved from https://jmagazine.joins.com/forbes/view/315611.
Gelman, J. R., & Salop, S. C. (1983). Judo economics:capacity limitation and coupon competition. Bell Journal of Economics, 14(2), 315-325.
Golder, P. N., & Tellis, G. J. (1993). Pioneer advantage:marketing logic or marketing legend?. Journal of Marketing Research, 30(2), 158-170.
Hamel, G. (2000). Leading the revolution. Cambridge, Mass: Harvard Business School Press.
Harrigan, K. R. (1983). Research methodologies for contingency approaches to business strategy. Academy of Management Review, 8(3), 398-405.
Health Chosun (2017, April 19). Shinsegae Food and Starbucks joins one trillion won club together. Health Chosun, Retrieved from http://health.chosun.com/news/dailynews_view.jsp?mn_idx=182039
Hill, C. W., & Jones G. R. (2012). Strategic management:an integrated approach (10th ed.). New York, NY:McGraw-Hill/Irwin.
Keller, K. L. (2006). Strategic brand management:building, measuring, and managing brand equity. Boston, Mass: Pearson.
Kerin, R. A., Varadarajan P. R., & Peterson R. A. (1992). First-mover advantages: a synthesis, conceptual framework, and research propositions. Journal of Marketing, 56(4), 33-52.
Kim, C. H., Lee, S. H., & Kim, S. W. (2016). Surviving in the red ocean: measuring factors for business excellence among coffee franchises in Korea. Total Quality Management & Business Excellence, 27(7/8), 1-14.
Kim, D. (2014). Why are the young so enthusiastic about Ediya?. Seoul, Korea: Maekyung Publishing.
Kim, W. C., & Mauborgne, R. (2005a). Blue ocean strategy: from theory to practice. California Management Review, 47(3), 105-121.
Kim, W. C., & Mauborgne, R. (2005b). Value innovation:a leap into the blue ocean. Journal of Business Strategy, 26(4), 22-28.
Kim, Y., Kireyeva, A. A., & Youn, M. (2013). Effects of SNS characteristics upon consumers’ awareness, purchase intention, and recommendation. The International Journal of Industrial Distribution &Business, 5(1), 27-37.
Korea Economic Daily (2017, January 10). Twosome Place and Ediya as top three. Korea Economic Daily, Retrieved from http://www.hankyung.com/news/app/newsview.php?aid=2017011024061.
Korea Fair Trade Mediation Agency (2016). The comparison of franchises. Retrieved from https://www.kofair.or.kr/hp/bor/copyView.do?searchId=1424.
Lemon, K. N., & Verhoef, P. C. (2016). Understanding customer experience throughout the customer journey. Journal of Marketing, 80(11), 69-96.
Lieberman, M. B., & Montgomery, D. B. (1988). Firstmover advantages. Strategic Management Journal, 9(S1), 41-58.
Lieberman, M. B., & Montgomery, D. B. (1998). First-mover (dis) advantages: retrospective and link with the resource-based view. Strategic Management Journal, 19(12), 1111-1125.
Maeil Economic Daily (2017, April 20). The mobile order system of Starbucks Korea is imported to the U.S.A., Japan, and China. Maeil Economic Daily, Retrieved from http://news.mk.co.kr/newsReadPrint_2013.php?year=2017&no=267306.
Markides, C. C., & Geroski, P. A. (2004). Fast second:how smart companies bypass radical innovation to enter and dominate new markets. San Francisco, CA: Jossey-Bass.
Michelli, J. A. (2006). The Starbucks experience: 5principles for turning ordinary into extraordinary. New York, NY: McGraw-Hill.
Moon, C. (2009). Coffee the black happiness. Seoul, Korea: Ediya.
Moon, C. (2017). Coffee dream. Seoul, Korea: Korea Economic Daily.
Moon, J. (2008). Perfect espresso. Seoul, Korea: Ivyline.
Pendergrast, M. (2011). Uncommon grounds: the history of coffee and how it transformed our world (2nd ed.). New York, NY: Basic Books.
Pine, B. J., & Gilmore, J. H. (1998). The experience economy. Boston, MA; Harvard Business School Press.
Porter, M. E. (1980). Competitive strategy. New York, NY:Free Press.
Porter, M. E. (1985). Competitive advantage: creating and sustaining superior performance. New York, NY:Free Press.
Porter, M. E. (1997). From competitive advantage to corporate strategy. Harvard Business Review, 65(3), 234-255.
Raff, D. M. G. (2000). Superstores and the evolution of firm capabilities in American bookselling. Strategic Management Journal, 21(10/11), 1043-1059.
Robinson, W. T., & Fornell, C. (1985). Sources of market pioneer advantages in consumer goods industries. Journal of Marketing Research, 22(3), 305-317.
Robinson, W. T. (1988). Sources of market pioneer advantages: The case of industrial goods industries. Journal of Marketing Research, 25(1), 87-94.
Robinson, W. T., Fornell, C., & Sullivan, M. (1992). Are market pioneers intrinsically stronger than later entrants?. Strategic Management Journal, 13(8), 609-624.
Schmitt, B. H. (1999). Experiential marketing. New York, NY: Free Press.
Schnaars, S. P. (1986). When entering growth markets, are pioneers better than poachers?. Business Horizons, 29(2), 27-36.
Schnaars, S. P. (2002). Managing imitation strategies:how later entrants seize markets from pioneers. New York, NY: Free Press.
Schultz, H., & Gordon, J. (2011). Onwards. Chichester, West Sussex: Wiley.
Schultz, H., & Yang, D. J. (1999). Pour your heart into it:how Starbucks built a company one cup at a time. New York, NY: Hyperion Books.
Shankar, V., Carpenter, G. S., & Krishnamurthi, L. (1998). Late mover advantage: how innovative late entrants outsell pioneers. Journal of Marketing Research. 35(1), 54-70.
Shindonga (2014, January 21). Isn't it too late to open coffee shops?. Shindonga, Retrieved from http://shindonga.donga.com/3/all/13/112727/1.
Sohn, E. H., Chang, S. Y., & Song, J. Y. (2009). Technological catching-up and latecomer strategy:a case study of the Asian shipbuilding industry. Seoul Journal of Business, 15(2), 25-57.
Song, J. (2011). Smart management. Seoul, Korea: 21st Century Books.
Tellis, G. J., & Golder, P. N. (2002). Will and vision. New York, NY: McGraw-Hill.
Thompson, A. A., & Strickland, A. J. (2001). Strategic management: concepts and cases. New York, NY:McGraw-Hill/Irwin.
Urban, G. L., Carter, T., Gaskin, S., & Mucha, Z. (1986). Market share rewards to pioneering brands: an empirical analysis and strategic implications. Management Science, 32(6), 645-659.
Yi, Y., & Huh, T. (2007). Manage customer value not customer satisfaction. Seoul, Korea: 21st Century Books.
Yoffie, D. B., & Kwak, M. (2001). Judo strategy: turning your competitors' strength to your advantage. Cambridge, Mass: Harvard Business Press.
Zhang, S., & Markman, A. B. (1999). Overcoming the early entrant advantage: the role of alignable and nonalignable differences. Journal of Marketing Research, 35(4), 413-426.
- Downloaded
- Viewed
- 0KCI Citations
- 0WOS Citations