The lack of attention and willingness to explore the established coffee culture in Australia resulted in the poor performance, and eventual closure of the majority of their locations. Starbucks did not have sufficient knowledge of preferences , and relied on the idea that Australia was westernized enough to accept them immediately.
Australia has one of the worlds largest coffee markets, but Starbucks failed to adapt their coffee menu to Australia’s coffee culture and rolled out their business plan on a new continent thinking there was no need to adjust.
Another problem that caused the failure of Starbucks in Australia is that Starbucks overestimated their point of difference of their coffee to that offered by the local coffeehouses. As a result, Starbucks charged their coffee at a very price compared to local coffee houses.
You may be wondering “Why is there no Starbucks in Australia?”
Even then, such a retreat in Australia was embarrassing for the brand. When Starbucks leave the Australian market, or at least a large number of shops were shut down, the Australian consumers didn’t care. It’s partly because Australians are spoiled for choice when it comes to coffee . Australia’s coffee market is one of the biggest in the world.
Why did Starbucks fail in the early 2000s?
There was a Starbucks everywhere they looked so it did not have any exclusivity factor to attract their new market, and so they just reverted to other coffee shops. Another reason was the lack of understanding of their target market .
Why did Starbucks turn out to be a disaster?
It’ll be all good.” Well, it turned out to be a disaster because Starbucks didn’t give the Australians a chance to get well-acquainted with the brand and develop that “need” and “loyalty”. Scarcity increases value – but Starbucks wasn’t scarce at all and had too many outlets.
This of course begs the inquiry “What went wrong with Starbucks in India?”
One article argued that One of the problems with Starbucks is that they thought that their business model could just roll out to a different environment and that there was no need for them to adjust . In contrast, Mc. Donald’s entered India with a menu tailored to Indian consumers.
It’s fair to assume that Starbucks must have done some research before aggressively expanding into Australia with its sugary menu, but the company failed to understand the most important aspect of a business – the customers . My name is Leo Saini. I’m a copywriter and I love gaining and spreading knowledge.
In 2008, Starbucks had to close down around 70% of its stores down under – leaving only 23 open . Now, I understand that this was really embarrassing for the company, but imagine the stress that the laid-off employees might have gone through at that time. It’s been a decade since the big closedown and things have mellowed down a bit.
Should Starbucks practice due diligence when entering Australian market?
Starbucks should practice due diligence when entering Australian market so that it could optimize its business as well increase its profitability , (Mercer, 2008). The company (Starbucks) entered Australian market in the year 2000. According to Starbucks culture, their coffeehouses were elegant and gave a homey feeling to their customers.
How many Starbucks locations are there in Australia?
Since the 2008 closures, the company has started to slowly open more locations in the country. Today, Starbucks boasts 39 locations across the Australian continent including Brisbane, Melbourne, Gold Coast and Sydney areas.
Starbucks opened its first shop in Australia in 2000, and that number only grew over the years .