Caffé Bene Disrupts the Stagnating Korean Coffee Shop Market

Kiwan Park, Sunghee Jun, Jerry Jisang Han, Jiyoung Lee, Hwain Kim and Joonkyung Kim
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Kiwan Park: Seoul National University, Korea
Sunghee Jun: Seoul National University, Korea
Jerry Jisang Han: University of Texas at Austin, USA
Jiyoung Lee: University of Texas at Austin, USA
Hwain Kim: Korean Air, Korea
Joonkyung Kim: University of Toronto, Canada

Asian Case Research Journal (ACRJ), 2015, vol. 19, issue 01, 203-230

Abstract: Caffé Bene was founded in 2007, during which the coffee shop market in Korea had been experiencing rapid growth. Caffé Bene had to compete with existing brands, including Starbucks, The Coffee Bean and Tea Leaf, and other coffee shop chains native to Korea. Sun-Kwon Kim, the founder and current CEO of Caffé Bene, tried to differentiate his brand on the basis of a new concept of European ambience mixed with Korean culture, new and localized menus, and celebrity endorsements; all of which were unheard of in the retail coffee industry at that time.This novel approach allowed Caffé Bene to gain great popularity in a short period of time. Despite its extraordinary success, however, Caffé Bene faced numerous challenges, including managerial issues caused by excessive expansion and rapid growth, dilution of differentiation as a result of new entrants that mimicked Caffé Bene's unique strategies, and an overall sluggish growth rate in the coffee shop market. In this case, the challenges that Caffé Bene faced and the strategies it employed to successfully deal with them are discussed.

Date: 2015
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DOI: 10.1142/S021892751550008X

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