This paper of research and analysis walks through the various functions operating behind and with the failure of Starbucks in Australia.
It includes several problems confronted by this company, the background of the case study, objectives of the research, cultural information, strategic analysis, and an overall PEST analysis.
The proposal for this case study gives a suggestive approach for Starbucks Australia in manifold issues. The interpretation of the findings approaches development and a strategic plan for the business market.
Project Title Of Case study: Starbucks Australia
This research project explores the multiple reasons that lead to the failure of Starbucks Australia.
Recognized Problems With Starbucks Australia
Every company goes through pitfalls for making it to the actual success. There’s always a lot of things to go through.It is needless to say that Starbucks had failed miserably in the Australian market.Despite being the largest coffee chain worldwide, they may have miscalculated the measures that should have taken in time. Though Australia holds the biggest consumer market for coffee dealers, it still failed in Australia.This research plans to discover and interpret the problems worked behind their major failure. Also, it would explore the cases of organizations hitting a new market.
Background Of Starbucks Australia
Starbucks is one of the biggest coffee chains inheriting in America worldwide. In the year of 1971, Starbucks first opened its doors in Seattle, Washington.By 2019 there are around 30000 locations of Starbucks worldwide. Jerry Baldwin was the first person to find it. The CEO was Howard Schultz. By the year 1992, the organization has grown towards commercial success, and when 1997 came, the company saw a growth of tenfold. It is the second most worthy fast-food brand in the American continent with a brand value worth more than $25 billion.
Three years later, in 2000, the plan of Starbucks Australia came into reality. Australia has always been a good market for investing in Coffee business. They have a strong liking for their coffees. At that time there was 84 Starbucks store in Australia, especially for serving espresso to the market consumers of the country.
But, the Australian coffee business market was already saturated by that time with already having the existence of more than 6000 independent cafes. Those have already created a standard for strong espresso coffee experience for the people.
It was 2008, and Starbucks still did not get any recognition from the customers. The time came when the company was forced to close its 61 stores in Australia after facing a loss of $143m.
At present, there are only 22 locations left amongst them.This report sets its goal to go through the case of Starbucks to get and analyze the reasons behind this failure.
Research Objectives Of Case Study of Starbucks Australia
The real intentions of this case study are:
Recognize the causes behind the failures of Starbucks Australia
To be acquainted with the failure causes, we are going to analyze secondary documentation and critical research through several surveys.
Examining the other competitive entities in this platform.
The survey explores the approaches of other fast food companies and local cafes in the same region. Also, an overview analysis of the Australian market is added to it.
Be informed of the reasons related to cultural differences between customers worldwide.
Secondary research sources like journals and studies will be viewed to get the idea of cultural differences in American and Australian communities. The facts and papers will be critically analyzed based on the twofold comparative approach.
The Fondness of Australian citizens in case of coffee products
The surveys and analysis were driven from them will be looked at thoroughly to understand the preferences of Australian customers.
Adding recommendations for the company on the contemporary market strategies
The insights drawn from the studies and research will help in making specific recommendations for the company to adapt to solve the problems.
Australian Culture Of Coffee:
Australians are very typical when it comes to their coffee tastes. To them, coffee means a way of life and not just a fuel to get you through the hectic days.
Australians demand their coffee top retains its original flavor, color, and aromas with the quality of good roasting and brewing. Over 90% of cafes in Australia are independently owned by people, which means a subtle versatility among the regular cafeterias there. This cafes provide the coffees which are better in quality and it also matches the customer needs.
Australian coffee is generally based on espresso and dripped styling, much stronger than regular American coffee. Apart from their exquisite taste, they actually grow their own Arabica beans, found in the north of Queensland and also in New South Wales. As the warm climate and volcanic stones work in favor of the growth and flourish of coffee.They have a certain nutty, sweet, and medium body flavors.
Also, the Latte Art in contemporary times has become an obsession of the generations.
Strategic Analysis Of The Case Study Starbucks Australia
Australia is a challenging market for freshers, has a set of boundaries. The company might have neglected these barriers.For entering the market, one company should investigate the bridges between the business environment and market strategies of the company.
There should be some strategic tools for backing the company up while providing necessary help in the time of dire need.Such kind of analysis might be done in the form of a PEST analysis or for the interpretation of the actual position of the company in the market, a SWOT analysis will be required.
PEST Analysis For Starbucks Australia
The fast-food industry in Australia earns the government around 32% of GDP every year. The Federal government has the power to influence the market climate too. Starbucks had already received optimistic support from the government for opening many outlets in a short span of time.
After the downfall of the economic conditions, it was difficult for companies to withstand these drastic conditions. Although Starbucks opened its pages in the attractive economy in 2011.
Generally, the Australians are very aligned to their local and ethical cultures. As multilingualism exists in the country, it is a crucial fact for brand endorsements.
As one of the most developed nations, around 59% of consumers like to reach the services through online mediums in Australia.
Though Starbucks is successful in the other country, it fails in Australia as they are not been able to meet the coffee culture of Australia and the taste of coffee as per the consumer demand of the Australian market. If they had spent the money on analyzing the customer coffee needs and the taste of coffee rather than spending money on setting up stores nearly all over Australia they should be able to get success in Australia too