There’s a train station near me with two coffee shops, sitting just opposite each other. On the surface, they’re direct competitors – both sell coffee, pastries, and a place to sit for a bit. But in reality, they operate in entirely different niches, each with a distinct strategy that works because of the other.

Go back a couple of years, and this wasn’t the case. Back then, one was a small cafe and it didn’t last. It didn’t commit to a clear offering – it was hard to see whether it was a sit in cafe, a place to grab a coffee on the way to work or something else entirely. The seating wasn’t particularly inviting, pricing wasn’t clear, and for first-time visitors, even figuring out where to order was a bit of a puzzle.

One of the biggest killers in fast food and drink is uncertainty. People choose McDonald’s or Starbucks over an independent cafe not because they think the food and coffee are better, but because they know exactly what they’re getting. No social awkwardness, no confusion – just predictability and consistency. A cafe that lacks a clear identity and feels uncertain to navigate is doomed.

Fast Forward: A Well-Executed Coffee Strategy

Now, in the same location, a well-known cafe brand has moved in. It’s a small chain with a clear identity: a welcoming spot for work from home types, parents with young kids, and anyone looking to settle in for a while. Across the street is a tiny coffee bar from another small local chain with a completely different focus. No indoor seating, just a few outdoor tables, and a laser focus on high quality coffee and boutique pastries.

Despite being two coffee shops side by side, they don’t really compete. The larger cafe’s true competition isn’t the tiny coffee bar, it’s home offices, co-working spaces, and child-friendly cafes. The smaller place is fighting for the attention of coffee purists who would either brew their own or begrudgingly grab a subpar flat white from the station.

The first cafe’s mistake? Trying to be everything to everyone and ending up nothing to anyone. The two successful cafes win because they choose who they’re for – and, just as importantly, who they’re not for.

In a competitive space, clarity wins. Know your market. Make the choice. Stick to it. It can be a hard choice because it feels like you’re turning away business from potential customers who aren’t the right fit. But the businesses that try to hedge their bets are the ones that disappear.

 nathan@nbstrategy.co.uk.