Failure of Starbucks in the Australian Market

INTERNATIONAL MARKETING &
ENTREPRENEURSHIP
TERM PROJECT
Starbucks In Australia
Mithun Selvarajah
185833700

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INTERNATIONAL MARKETING & ENTREPRENEURSHIP
Executive Summary:
The report aims to provide an insight into the failure of Starbucks in the Australian market. The
report portrayed how Starbucks failed to capture the already established coffee market in
Australia. The report commenced with a brief overview of the company. It also provides analysis
by focusing on the marketing strategy, vision statement and problems with international
expansion. The report also attempted to point out the things that went wrong in Starbucks
Australia and pointed out the reasons why there has been no Starbucks store in the Australian
subcontinent. The report further ends with recommendations that provided measures as to how
Starbucks can be successful by bringing in the necessary changes.

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INTERNATIONAL MARKETING & ENTREPRENEURSHIP
Table of Contents
Introduction:....................................................................................................................................3
Brief Overview of the Company:....................................................................................................3
Analysis:..........................................................................................................................................4
Marketing Strategy of Starbucks:....................................................................................................4
Vision Statement of Starbucks:.......................................................................................................4
Problems of International Expansion:.............................................................................................5
Things that Went Wrong in Starbucks Australia:............................................................................5
Reasons for No Starbucks Store in Australia..................................................................................6
Recommendations:..........................................................................................................................9
Conclusion:....................................................................................................................................10
References:....................................................................................................................................12

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INTERNATIONAL MARKETING & ENTREPRENEURSHIP
Introduction:
The report aims at providing a review on the failure of Starbucks in the Australian
market. Market failure represents a situation where the allocation of the goods and the services
are not effective (Weeden&Grusky, 2014). Market failures have been associated with non-
competitive markets, information asymmetries, externalities, problems of the principal-agent,
non-competitive market, public or externalities. As far as the Seattle based Starbucks
Corporation is concerned it had to undergo immense struggle in cracking the Australian market.
In the year July 2008, sixty-one stores closed down in Australia. It was in the year May 2014 that
Starbucks announced the ongoing losses in the Australian market that resulted in the stores being
sold out to Withers Group. The report provides a descriptive analysis of the failure of Starbucks
in the Australian market.
Brief Overview of the Company:
Starbucks Corporation has been a one-stop destination for coffee lovers. It ensures an
inviting atmosphere from day to day stress and acts as a comfortable and cozy place for meeting
the friends or enjoying me-time over a richly roasted and brewed cup of coffee. Starbucks is an
American company found in Washington in the year 1971 and has operations across 30,000
locations across the world (starbucks.com 2018). It is the sole representative of the ‘second wave
coffee’ that distinguishes it from the other coffee serving venue in terms of quality, taste and
customer experience. The locations of Starbucks primarily serve cold and hot coffees of different
varieties. Availability of the fresh juices, frappucino beverages, snacks and pastries including