Essay on Case Study on the Failure of Starbucks in Australia

1166 Words Mar 25th, 2013 5 Pages
Case study on the failure of Starbucks in Australia
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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 Asia-Pacific, Europe and Latin America (Simon,
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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.

The failure of Starbucks in Australia gave a model lesson to the business world. It was just another multi-national seeking world dominance that made a debut in a market without having learnt its uniqueness and dynamics. They did not establish a target market or make the effort to deliver products that suited the Australians. This came in expense of the consumers’ needs therefore the Australians did not hesitate to go for the familiar better alternatives With headlines like ‘Coffee culture grinds Starbucks’ Australian Operation’, the company found itself in dire straits and tried to

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