CS 1 Read 6 Starbucks Australia

Australasian Marketing Journal 18 (2010) 41–47

Contents lists available at ScienceDirect

Australasian Marketing Journal journal homepage: www.elsevier.com/locate/amj

How the local competition defeated a global brand: The case of Starbucks
Paul G. Patterson *, Jane Scott, Mark D. Uncles
School of Marketing, Australian School of Business, University of NSW, Sydney, NSW 2052, Australia

a r t i c l e

i n f o

Keywords:
Service brands
Service quality
Global branding
International business
Starbucks
Coffee

a b s t r a c t
The astounding growth and expansion of Starbucks is outlined, both on a global scale and within Australia. The focus then shifts to the abrupt closure of three-quarters of the Australian stores in mid 2008. Several reasons for these closures are described and examined, including that: Starbucks overestimated their points of differentiation and the perceived value of their supplementary services; their service standards declined; they ignored some golden rules of international marketing; they expanded too quickly and forced themselves upon an unwilling public; they entered late into a highly competitive market; they failed to communicate the brand; and their business model was unsustainable. Key lessons that may go beyond the specifics of the Starbucks case are the importance of: undertaking market research and taking note of it; thinking globally but acting locally; establishing a differential advantage and then striving to sustain it; not losing sight of what makes a brand successful in the first place; and the necessity of having a sustainable business model.
Ó 2009 Australian and New Zealand Marketing Academy. Published by Elsevier Ltd. All rights reserved.

1. Introduction
‘‘Shunned Starbucks in Aussie exit”

then shifts focus to describe the extent of the store closures in
Australia, before offering several reasons for the failure and lessons that others might learn from the case.

(BBC News, 4 August 2008)
2. Background
‘‘Weak coffee and large

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