This Article Contains Free Knowledge Videos on Reasons for Starbucks Failure in Australia
Based on Public Facts
In July 2000, the first location in Australia opened in Sydney. After a massive downturn in 2008, Starbucks announced in July 2008 that it would close 61 of its 84 stores in Australia in the following month. Nick Wailes, an expert in strategic management of the University of Sydney, commented that “Starbucks failed to truly understand Australia’s café culture.”. The remaining Australian Starbucks stores were sold to the Withers family in 2014.
Why Starbucks Failed in Australia – Video Guide 1
Starbucks can be found all over the world, from Shanghai to Guantanamo Bay. But there is one continent that was uninterested in the coffee giant. Australians largely rejected Starbucks’ attempted takeover, which led to an embarrassing retreat for the brand.
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Why Starbucks Failed in Australia – Video Guide 2
Based on Now You Know That Video Report
1) At the time of Starbucks’ arrival, the Australian consumer was fully formed. The culture of coffee consumption has evolved over the course of a century, with the first arrival of European immigrants.
2) Many Australians prefer to drink coffee in small cafes with their “fellow” baristas, with whom they can chat about daily routine.
3) Starbucks decided not to tailor their business model to the Australian market. They thought that what works in the United States will work in another English-speaking country.
4) After opening their first cafe, Starbucks decided not to wait for a long time. New coffeehouses appeared almost every month in all big cities. The Australian consumer did not feel a deficit in the Starbucks.
5) From the very beginning, the total income of all cafes did not show that the next new place is really needed. Company’s losses in the first years grew constantly.
6) The financial crisis was a heavy blow even for the toughest nuts. Starbucks entered 2008 with huge wounds. As a result, the number of cafes decreased from 87 to 26.
7) Most Australians do not like sweet coffee drinks. They also do not need 16 oz of coffee-like liquid. Starbucks ignored some drinks that are traditional for Australia (like Long Black or Macchiato).
8) Starbucks did not want to equate their prices to the level of local players. Almost any position from the Starbucks menu was more expensive than from the local baristas, while the latter offered drinks that Australians really love.
9) In the person of Starbucks, many consumers saw the pressure of another culture.
10) Consumers are becoming smarter. People know how to roast coffee, what sorts of coffee are, and what depends on the flavor. The requirements of an ordinary man in the street increased, which did not really benefit Starbucks.
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