Starbucks: Failure Abroad

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Starbucks: Failure Abroad

When one thinks of a global corporation, one thinks of a company who has got it together. They must right? How else could a corporation overcome transnational barriers and socio-cultural issues and still make a profit? Turns out not all global companies have this ability. Some do for the most part but are still vulnerable to mistakes. Such is the case with Starbuck’s failure in Australia. We will introduce you to the company, overview their history and expansion efforts, and explain in short why they failed miserably at something they have done literally thousands of times before.
General Information
Starbucks Coffee International, Inc. purchases, roasts, and sells whole bean coffees, brewed
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Starbucks Franchise Opportunity
Starbucks does not expand by way of traditional franchising. They do however have another opportunity they offer to those seeking Starbucks outlets. This idea resembles the franchise, but is still different; they call it a Starbucks Licence Store. Around 44 % – 54 % of the worldwide Starbucks stores are Starbucks Licensed Stores. Starbucks only offers the ability to license stores based on location. Generally it is only possible to license Starbucks stores in areas where corporate stores cannot operate, such as universities or airports.
The Starbucks licensed plan (resale plan) has its own strict rules. Starbucks receives royalties and licensing fees from the licensees, and in turn the licensee obtains the ability to offer Starbucks products to their consumers. Starbucks prohibits the licensee stores from offering other firm’s products in their stores so they can control the quality of coffee in all coffee shops more easily. In addition, all employees of both corporate stores and licensed stores must receive the same training. The training is developed by Starbucks and implemented both domestically and internationally alike. Licensed stores make it possible for Starbucks to expand easily while still maintaining the quality of product and service in every single store (

Problems with International Expansion

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