Case Study On The Failure Of Starbucks In Australia

1179 words - 5 pages

Case study on the failure of Starbucks in Australia
Name ()
Tutors ()
Course ()
Date ()

History of Starbucks
Starbucks is the largest coffee chain operator in the world. Founded in North America in 1971, Starbucks took a great leap in its growth in 1992 by having 140 stores with a growing store count of an extra of 40-60 percent a year. It has grown further to command the largest share in the international coffee market having penetrated in 44 countries with more than 1500 stores. In the year 200, Starbucks would open a new store somewhere in the world every single day. It has its largest market share is in North America serving about 50 million people a week, followed by markets in the ...view middle of the document...

Such was in Australia. Starbucks entered its market in the year 2000 and managed to open 84 stores. However, in mid-2008, Starbucks announced that they would swiftly close nearly three-quarters of their Australian stores far from the fact that the company’s earnings declined due to global economic constraints characterized by rising fuel costs and escalating interest rates which afflicted their consumers who had cut back spending on luxurious gourmet coffee. All this tragically happened within the spun of a month. Australia proved to be their biggest loser in terms revenue.
First as a reason for their failure is that they focused on product optimization as they used the same old tactics to brand their product in Australia as in America which failed quite miserably. With a coffee culture already pre-existent, Australia needed an organic experience that far surpassed their usual taste. Starbucks found itself lagging behind other coffee companies in terms of popularity and sales. Gloria Jean’s, McCafe and Hudson’s among others took the lead in the market and remained favorites to the Australians. (Miller, Claire 2009).
Second, Starbucks failed to do in Rome what the Romans do which is to create a social connection for the Aussies who ordinarily go out of their way to enjoy a wonderful cup of coffee with their fellow mates. Selling low quality coffee at premium prices set them up for market failure.
Third, Starbucks failed to root a solid foundation in the market and faced cut-throat competition. Being a foreign global brand, they had trouble competing with the local and familiar boutique cafés who were careful to provide just what the Australians needed. Their tactics simply couldn’t match up to their opponents.
They also compromised on quality. The American, Seattle-based coffee chain serve mediocre coffee augmented with large amounts of milk and flavored syrups contrary to what Australian coffee lovers demand: real espresso, high quality and authentic coffee. The country is the largest consumer of instant coffee in the world with more than one billion cups of coffee consumed in a year. The US giant simply overestimated the returns they would have received from this statistics and failed to initiate strategies that they would use to guarantee grand sales in the already saturated market. Their prime goal would have been to provide unique and unmatched high quality coffee to the Aussie people.

Conclusion
The failure of Starbucks in Australia gave a model lesson to the business world....

Other Essays Like Case Study on the Failure of Starbucks in Australia

Starbucks Case Study

968 words - 4 pages Case Study: The Globalization of Starbucks From the famous green and white logo, to the coffee house style environment, Starbucks has built an empire located on every street corner. We also cannot forget the red cup debacle just this Christmas! Starbucks is a true icon in the world of coffee. Starbucks created a true lifestyle for the world that some small businesses can only dream of. Starbucks currently has more than 21,000 stores in

Starbucks Case Study

2632 words - 11 pages STARBUCKS CORPORATION : CASE STUDY IN MOTIVATION 1) Meaning : Formal Team is formed when two or more persons come together. They have a common objective or goal. They are willing to work together to achieve this similar objective. Formal Team has its own rules and regulation. These rules must be followed by the members (employees and managers). A formal team has a system of co-ordination. It also has a system of authority. It has a clear

Starbucks Case Study 3

956 words - 4 pages A growth strategy is designed to help an organization expand its markets served, products offered and increase its employee and market share. Starbucks is an organization that is on the continued rise of success but in order for Howard Schultz to make sure good decisions are being made for the company certain growth strategies are used. I believe that Starbucks uses two different strategies, concentration and both forward and backward vertical

Starbucks Case Study

2673 words - 11 pages addition the company has also lacking the ability to look for a business portfolio for various regions, like in the case of Starbucks Coffee so as to spread business risk. In addition, the company is largely dependent on its main competitive advantage which is coffee retailing. Such aspect could make them slow to diversify in other aspects when the need arises. Opportunities             With the management system and the marketing

Over Study in Australia

651 words - 3 pages NOTE NOTE: Answers to the exercises are at th the end of the section PreRequisite Knowledge and Terms in Mathematics Booklet use with the textbook by Fit Fitzpatrick will be taught in lectures ADDITIONAL MATERIAL sample examinations (Semester 1 and and Final Examinations) revision book (Semester 2) differentiation and integration booklet (Semester 2) NON ASSESSABLE TESTS dates to be advised (on program) content

The History of Wheat Production in Australia

1415 words - 6 pages Wheat is one of the most important food sources for humans. For thousands of years we have grown, milled and baked wheat, transforming it into countless types of foods. It is grown on almost every continent in the world, and is the worlds most cultivated plant. Originating in the Middle East and becoming more popular as people migrated, wheat has become of the most important plant staples today. It is also one of the most popular staples because

The Case Study of Lv

892 words - 4 pages mystery of the chain of luxury goods industry. Chinese production of Louis Vuitton affixed to the French label was exposure which raises questions and complaints from consumers. Consumers feel that they have been cheated and cause the public controversy. International luxury brands have always stressed the origin. In fact, many luxury brands have been in China for the production of agents. According to industry insiders revealed, on the one hand

The Failure of Culture

1130 words - 5 pages narrative or conclude that truth is part of the genre of art, but only if materialist nationalism is valid; if that is not the case, class, perhaps paradoxically, has significance. Derrida’s essay on subdialectic narrative states that context is a product of the collective unconscious, given that sexuality is distinct from consciousness. Therefore, Hamburger[5] implies that we have to choose between the prepatriarchialist paradigm of reality and

Moral Aspects Of Technology(Case Study: Moral Impact Of Mobile Phone Communication On The Society)

3892 words - 16 pages HU 341Moral Literacy and Moral ChoicesTerm PaperMoral aspects of TechnologyMotivation:It might appear strange that while our synopsis and the presentation dealt primarily with Communication, especially personal communication as applied to the special case of mobile communication, this term paper deals with the idea of technology as a whole. However, it can be justified on the grounds that what is true for one technology will in essence be true

Case Study on Fedex

1973 words - 8 pages Federal Express – delivering the goods Kevan Scholes This case study looks at how new business models can create vast improvements in competitiveness. However, the models must be suited to the business environment at the time and will have a ‘shelf-life’ as the business environment changes. The case study looks at one on the world’s most successful adopters of a new business model that transformed the airfreight and package delivery sectors

Case Study on Mac

796 words - 4 pages The marketing process A McDonald's Restaurants case study The 4Ps At this point the marketing mix is put together: Product The important thing to remember when offering menu items to customers is that they have a choice. They have a huge number of ways of spending their money and places to spend it. Therefore, McDonald's places considerable emphasis on developing a menu which customers want. Market research establishes exactly what this is

Related Papers

Case Study On Starbucks

5204 words - 21 pages product-based and service-based businesses. Your assignment should be between 2,000 to 2,500 words. Sources and references to support this assignment must be quoted. Introduction The objective of this study is to classify and make a comparison of two global business models in the Marketing and Promotion Mix categories. The organizations that will be used in this study are Starbucks Corporation (Restaurants, Retail Coffee and Tea, Retail

Near Failure In Nagasaki Case Study

1180 words - 5 pages Management 3120 Professor Jim Walsh September 29, 2014 Facts * Mission planned for Aug. 11th. Moved to Aug. 9th due to weather conditions. * Maj. Charles W. Sweeney was the pilot in command. Flew the leading aircraft, Bockscar, which would drop the bomb. * Navy Cmdr. Frederick L. Ashworth: senior weaponeer on board Bockscar. Had managed field-testing of the atomic bomb. * Primary target: Kokuro. Secondary target: Nagasaki

Starbucks Case Study 1347 Words

1347 words - 6 pages decision-making or decentralized the operation? In 2008 around the time of the economy going down, (“Case Study: Starbucks’ Structure”) “possibly coupled with other problems, including overexpansion… Founder Howard Schultz worried that the addition of so many locations had watered down the Starbucks experience” (para. 5). I agree with Howard Schultz in that the over expansion really hurt Starbucks a lot by playing down the experience in that a

Starbucks Case Study 2568 Words

2568 words - 11 pages coffee ice cream with Dreyer’s. • Selling CDs in Starbucks retail stores. Starbucks uses minimal advertising and has grown on word of mouth and brand recognition. According to Garza by 2004 Starbucks had reached 1,344 locations. (Garza) KATHLEEN LEE 1 CASE STUDY: STARBUCKS Updated history and Current Status Today, according to the Starbucks website, they have 16,706 stores (as of Dec. 27, 2009) in 50 countries. In 2009 they made strives