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A Case Study of Starbucks Coffee Company in Central Ohio

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A Case Study of Starbucks Coffee Company in Central Ohio Space and Place in Business Intelligence: A Case Study of Starbucks Coffee Company in Central Ohio THESIS Presented in Partial Fulfillment of the Requirements for the Degree Master of Arts in the Graduate School of The Ohio State University By John Rainey Graduate Program in Geography The Ohio State University 2012 Master's Examination Committee: Daniel Sui, Advisor Ola Ahlqvist Rebecca Naylor Copyrighted by John Rainey 2012 Abstract The role of space in the planning and development of retail networks has been evident throughout much of the 20th century during which a range of analytic models were developed to meet a variety of management objectives. The advancement of geographic information science (GIS) has greatly facilitated the frequency with which such models have been implemented by retail firms. Yet, critical economic geographers have taken notice of the engagement of GIS in a manner that is essentially spatially deterministic, awarding privilege to positivist approaches that had established dominance within the discipline of geography since the quantitative revolution of the 1960s, and scholars have contended that place, conceived as a relational approach to space, has a much greater role in the organization of the modern economy. Currently, however, a fundamental paradigm shift is occurring within GIS as a result of the proliferation of volunteered geographic information produced through location-based social media, enabled by Web 2.0 technologies, providing opportunities for the integration of georeferenced data within a GIS that enlightens the relevance of place in the economy without sacrificing attention to space. The poor performance and subsequent closure of over 700 Starbucks outlets in the U.S. since 2008 present a unique opportunity to study the implications of both space and place in the present economy. This research shows how a variety of methods may be used to understand the implications that each perspective suggests, concluding that the new wave of “big data” driven by location-based social media has the potential to mediate the polarization of space and place in the discipline of geography while presenting the opportunity to study spatial phenomena through GIS in a manner that is not spatially deterministic. Key words: space, place, GIS, business intelligence, volunteered geographic information, social media, Starbucks Coffee Company ii Acknowledgments I would like to extend my sincerest gratitude to the following persons who have offered guidance during the completion of this thesis: To my advisor, Dr. Daniel Sui, for his persistent encouragement which was integral to the completion of this thesis, and for being a great mentor and friend who has offered the utmost support in my professional development. To Dr. Ola Ahlqvist, for serving on my committee, and for his constructive guidance and insights over the course of my graduate career that have encouraged my growth as a researcher and aspiring professional. To Dr. Rebecca Naylor, for serving on my committee, and for sharing her critical insights and expertise in my research area which challenged me to engage new perspectives and ultimately guided the development of this thesis. To Dr. Keith Debbage, Dr. Corey Johnson, and Dr. Selima Sultana, all of whom helped hone my passion for geography as an undergraduate, and whose mentoring guided my aspirations to attend graduate school. To all of the OSU Department of Geography faculty, staff, and students, whose advice, support, and friendship have been priceless throughout the course of writing this thesis and my time here. Finally, to my parents, for providing me with the opportunity to follow my passion and for their unwavering love and support. iii Vita June 2000 .......................................................Abington Heights High School 2005................................................................B.M. Music Performance, Marywood University 2010................................................................B.A. Geography, The University of North Carolina at Greensboro 2011 to present ..............................................Graduate Teaching Associate, Department of Geography, The Ohio State University Fields of Study Major Field: Geography iv Table of Contents Abstract ............................................................................................................................... ii Acknowledgments.............................................................................................................. iii Vita ..................................................................................................................................... iv Fields of Study ................................................................................................................... iv Table of Contents ................................................................................................................ v List of Tables ................................................................................................................... viii List of Figures .................................................................................................................... ix Chapter 1: Introduction ...................................................................................................... 1 Chapter 2: Conceptual Framework and Literature Review ................................................ 7 2.1 Retail Location Intelligence through a Spatial Perspective .................................... 10 2.1.1 Trade Area Analysis ......................................................................................... 10 2.1.2 Location-Allocation Modeling .......................................................................... 12 2.1.3 Market Segmentation ........................................................................................ 20 2.2 Retail Location Intelligence through a Platial Perspective ..................................... 27 2.2.1 Place in the Modern Economy .......................................................................... 27 v 2.2.2 Retail Atmospherics .......................................................................................... 31 2.3 Developing Retail Location Intelligence through GIS ............................................ 37 2.4 The Implications of Volunteered Geographic Information ..................................... 40 2.4.1 Social Media and “Big Data” .......................................................................... 40 2.4.2 VGI in the Context of Qualitative GIS .............................................................. 43 2.5 Case Study: Starbucks ............................................................................................. 45 2.5.1 Location Strategy and Expansion (1971 – 2007) ............................................. 46 2.5.2 Corporate Restructuring (2007 – Present) ....................................................... 54 Chapter 3: Methods, Study Area, and Data ...................................................................... 58 3.1 Study Area: Columbus, Ohio: An Overview of the City and Its Retail Business ... 62 3.2 Data Description ...................................................................................................... 67 3.3 Quantitative Methods .............................................................................................. 72 3.4 Qualitative Methods ................................................................................................ 82 Chapter 4: Geographical Analysis of Starbucks’ Location Strategy ................................ 87 4.1 Quantitative Methods: Results ................................................................................ 90 4.2 Qualitative Methods: Results ................................................................................ 113 4.2.1 Store Observations ......................................................................................... 114 4.2.2 Individual Interviews ...................................................................................... 124 4.2.3 Implications of Social Media and “Big Data”............................................... 131 vi Chapter 5: Summary, Conclusions, and Future Work .................................................... 136 5.1 Summary ............................................................................................................... 136 5.2 Results ................................................................................................................... 139 5.3 Future Work .......................................................................................................... 142 References ....................................................................................................................... 143 Appendix A: Additional Tables ...................................................................................... 150 Appendix B: Interview Script ......................................................................................... 162 vii List of Tables Table 1. Population growth 1950 to 2010 ......................................................................... 64 Table 2. GIS data .............................................................................................................. 67 Table 3. Demographic data ............................................................................................... 68 Table 4. Business data......................................................................................................
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