Starbucks Failure in Australia
Starbucks Failure in Australia
Introduction
There are a number of different reasons why Starbucks failed in Australia and will be spoken of in more detail over the course of the report. Since World War II, Australians have developed a taste for coffee that many of the European migrants that moved to Australia brought with them.
Starbucks first began in 1971 its main goal was to offer a coffee experience that no other coffee shop has done before. As stated in the case study, Starbucks emphasis on customer service included eye contact and greeting each customer within 5 seconds, cleaning tables promptly and remembering the names of regular customers. Starbucks was to reinvent the sense of romance atmosphere sophistication and sense of community and also create a ‘third place’ in people’s lives. This ‘third place’ would be somewhere between home and work where they could sit and relax and have a coffee.
Unlike America, Australia already had a thriving coffee industry when Starbucks entered into Australia in 2000. It is fair to describe Australia’s coffee culture and industry as a mature and sophisticated market, and as stated in the case study, getting a morning cup of coffee from a Café was already a ritual for many a Australian consumers. Australia’s overall market is worth well over $3 billion dollars, $1.8 billion of this relates to the coffee retailing market. In Australia every year over one billion cups of coffee are consumed in cafes, restaurants and other outlets nation wide.
Summary
There are a number of different coffee brands in Australia and there are over 1400 cafes and restaurants serving a variety coffee types. Australia generated $9.7 billion in income during the 2006 and 2007 due to the sales of coffee. Even with such a high number of sales, success in the coffee industry is not a guarantee. Coffee shops have a very small margin of profit, and many cafes fall into the category of about four per cent profit. Due to the
Introduction
There are a number of different reasons why Starbucks failed in Australia and will be spoken of in more detail over the course of the report. Since World War II, Australians have developed a taste for coffee that many of the European migrants that moved to Australia brought with them.
Starbucks first began in 1971 its main goal was to offer a coffee experience that no other coffee shop has done before. As stated in the case study, Starbucks emphasis on customer service included eye contact and greeting each customer within 5 seconds, cleaning tables promptly and remembering the names of regular customers. Starbucks was to reinvent the sense of romance atmosphere sophistication and sense of community and also create a ‘third place’ in people’s lives. This ‘third place’ would be somewhere between home and work where they could sit and relax and have a coffee.
Unlike America, Australia already had a thriving coffee industry when Starbucks entered into Australia in 2000. It is fair to describe Australia’s coffee culture and industry as a mature and sophisticated market, and as stated in the case study, getting a morning cup of coffee from a Café was already a ritual for many a Australian consumers. Australia’s overall market is worth well over $3 billion dollars, $1.8 billion of this relates to the coffee retailing market. In Australia every year over one billion cups of coffee are consumed in cafes, restaurants and other outlets nation wide.
Summary
There are a number of different coffee brands in Australia and there are over 1400 cafes and restaurants serving a variety coffee types. Australia generated $9.7 billion in income during the 2006 and 2007 due to the sales of coffee. Even with such a high number of sales, success in the coffee industry is not a guarantee. Coffee shops have a very small margin of profit, and many cafes fall into the category of about four per cent profit. Due to the