Essay about Starbucks Failure in Australia

Economic conditions in the US and certain international markets could adversely affect Starbucks’ business and

Starbucks has been the world’s premier roaster and retailer of coffee since its founding in 1987. Today they operate stores in over 50 countries. They have 8,812 company-owned stores and 7,583 licensed stores. Sales accumulate on average to about $10 billion dollars.

The story of Starbucks in Australia is a helpful lesson for everyone in business. It is considered a tale of a business that was seeking world domination in its area that somehow walked into a new market deprived of first testing the waters. What went wrong for the business down under has been analyzed in a lot of research by a lot of experts in that area. When Starbucks had come onto the scene of the Australian market in 2000, it was certainly one of the biggest coffee chains that were worldwide, opening up one new store each day anywhere in the world, notes Patterson. Its achievement in the US, which had not up to that time liked a strong society that was coffee-drinking, had provided the brand great sureness to come in other markets counting China(1996) and Japan(1998). The corporation now has some where around 15,000 stores in 44 lands. Nonetheless in mid-2008, Starbucks' organization proclaimed that it would have to start closing 61 of its 84 Australian stores (Clark, G. ,2000). The closings all had taken place quickly in one month. Fatalities were huge, counting 685 jobs and a$143 million. Just 23 Australian stores were left open to operate in major locations. What went so wrong?

starbucks Corp., an international coffee and coffeehouse chain based in Seattle, Washington, has expanded rapidly since its opening in 1971. These outrageous success was due to its well-developed strategy vision which lay out the company's strategic course in developing and strengthening its business. Starbucks is a global corporation that sells authentic coffee in 30 countries, reporting revenues of nearly $5.1 billion in 2006. The main goal of Starbucks is to embrace diversity by applying the highest standards of excellence. Starbucks strives to perfect the relationship with the working class by making the service as fast as possible because they believe that every customer has their own personal rate. One

1. In the beginning, how was Starbucks different from other coffee options for coffee drinkers in the United States? What activities and assets did Starbucks leverage to differentiate itself from competitors?

In general the coffeehouse industry in the United States was experiencing an increase in coffee consumption per capita due to the “Starbucks effect”. At this time Starbucks was operating approximately 20,000 stores in the United States and was living a fast expansion strategy worldwide.

Even so, just two weeks earlier Howard Schultz announced that the company will be expanding internationally. The plan is to open more than 1500 stores in Germany, France, and Britain over a 3-year span (Forbes, 2008). It is estimated that this expansion will boost revenue by more than 20 percent (MSN Money, 2008). In spite of Starbucks’ struggle among its love-hate relationship between customers and protesters, one thing that Starbucks

Starbucks Australia has also gradually been trying to engage more with the local communities where its stores are situated by initiating community projects and volunteering in the way that McDonald’s has been doing for many years.

Starbuck’s strategy focused on three components; high-quality coffee, intimate service, and ambient atmosphere. Starbucks worked closely with growers in Africa, South and Central America, and Asia-Pacific regions to insure the quality of its product. Starbucks called all employees' "partners" and worked hard to train them with the skills necessary to best serve the customer. The atmosphere at Starbucks was crafted after the European-style espresso bar. The company goal was to create ambience through the Starbucks "experience" and by making the area comfortable, yet upscale.

Please answer all the following questions as they relate to the case. Please utilize as much outside resources as you deem necessary to reinforce your answers—especially the last question. Remember that this case is over 10 years old and Starbucks has changed since then.

The CEO (Chief Executive Officer), Howard Schultz pointed that the main reason from the decline of “Starbucks Experience” was that the number of Starbucks shops increased sharply from only 1,000 to 13,000 within ten years. Other people considered their brand has been commercialized, and the customers hadn’t had enough enthusiasms to appreciate every moment of their coffee any longer. He suggested that Starbucks should re-find its origin. Nevertheless, his advice apparently was opposite to the

When Starbucks decided to enter the Australian market place it experienced many challenges as it did

The original idea for the Starbucks format came from the 1980´s when the company´s director if marketing, Howard Schultz, came back from a trip to Italy enchanted with the Italian coffeehouse experience, the idea was to sell the company´s own premium roasted coffee and freshly brewed espresso-style coffee beverages, along with a variety of pastries, coffee accessories, teas, and other products in a tastefully designed coffeehouse setting. The focus was to sell a “third place experience”.

Surely people were aware that the beverages at Starbucks were more expensive than at many cafés but they still frequented the outlets, as it was a place ‘to see and be seen’. Here’s a map showing countries with Starbucks

Starbucks strives to provide every customer with the best experience possible. It values its customer’s thoughts and feelings in its effort to exceed expectations. It wants to establish and maintain good relations with every customer. In its desire to focus on the customer it has a relaxing ambiance which adds to an enjoyable, tranquil experience. Starbucks also aims for perfection with every cup of coffee served. It wants to have the highest consistency of satisfaction with every cup. Additionally, Starbucks provides a gathering place for neighborhoods. For many, it is a place that is part of people’s daily