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Why Starbucks Failed in Australia

Original Content Publication Date: 07/26/2018

Summary

Australia has proven to be one of the toughest markets to break into for the coffee-empire Starbucks. Starting in 2000, Starbucks opened their first store in Sydney that quickly turned into 87 locations across Australia by 2008. But customers weren't keeping up with the rapid growth nor did they care to be. Starbucks launched too quickly and left no room for their Australian consumers to develop a taste for the brand. 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. They tried to grow their empire too quickly, opening multiple locations instead of slowly integrating them into the Australian market and ultimately paid the price, closing 61 stores in 2008.

Main Points

  • Starbucks rolled out their business plan in a new market thinking there was no need to adjust
  • They tried to grow their brand too quickly without allowing their new consumers to develop a taste for the brand 
  • They failed to adapt their coffee menu in a new market/culture

Discussion Questions

1. What could Starbucks have done differently in 2000 to produce a different outcome for the growth of their brand in Australia?2. What are some of the biggest challenges a company faces as they attempt to integrate into new markets with different consumers?

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