Cross Cultural Management docx.

Running head: MANAGEMENT
MGT205
Name of the Student:
Name of the University:
Author Note:

1MANAGEMENT
Executive Summary:
The objective of this report lies in providing an overview of the reasons that led to failure of
Starbucks in the Australian market. The report showed through discussion how the Seattle based
coffee shop help in capturing a market share in the already established caffeine market in the
Australian subcontinent. The report also pin pointed things that went wrong for Starbucks in
Australia along a mention of its failure in capturing the cultural differences between Australia
and United States. The report provides an analysis on the cultural difference between the two
countries through Hofstede’s cultural dimension. The report further mentions the lessons learnt
by Starbucks as a part of the recommendations along with a mention of the future
recommendations.

2MANAGEMENT
Table of Contents
1. Introduction:................................................................................................................................2
2. Key Challenge Faced By Management: Identification of Problems and Symptoms..................2
a. Things that Went Wrong..............................................................................................................2
b. Cultural Differences between the Two Countries.......................................................................4
3. Analysis through Hofstede’s Cultural Dimension.......................................................................5
4. Recommendations:......................................................................................................................8
a. Lessons for Starbucks:.................................................................................................................8
b. Future Recommendations:...........................................................................................................9
References:....................................................................................................................................11

3MANAGEMENT
1. Introduction:
The objective of the report is to provide an analysis on the slow expansion of Starbucks
in Australia along with identification of reasons for its market failure in Australia. Market
failures has mostly been associated with information asymmetries, non-competitive market,
problems related to principal agent and public (Weeden & Grusky, 2014). The case study
portrays how it is easier in finding Starbucks Café across the world except for Australia. In fact,
in the year 2008, Starbucks closed almost 70 percent of the underperforming locations leaving
aside only 23 cafés across the whole continent. In spite of the intense love for coffee of the
Australians, Starbucks was unable to find a foothold in the continent. The case study, portrayed
that the reasons could have been the rapid launch that did provide the Australians with an
opportunity for developing an appetite for Starbucks. In reality, Starbucks Corporation of Seattle
did not match the taste of the Australians as it offered sweeter coffee varieties which could also
be considered a reason for its failure.
This report focuses at providing a detailed analysis of the reasons for Starbucks’ failure
through analysing the cultural differences between the two countries. The report also tries to
provide necessary recommendations that helps in capturing a better market share.
2. Key Challenge Faced By Management: Identification of Problems and Symptoms
a. Things that Went Wrong
There are two reasons that can be cited for the failure of Starbucks in the Australian
market. The first reason can be focused at the fact that the Starbucks café did not consider paying
attention to optimization of its products. They tried to implement things that were preferred in
the United States without trying and adapting to the preferences of the Australians (Mescall,