Starbucks Australia Expansion Report

This report is a feasibility study on Starbucks' expansion project in Australia. It examines the project's necessity, considering Starbucks' previous unsuccessful attempt in 2002 and its eventual success in 2016. The report analyzes five key aspects: project need, options analysis, project definition, project approach, and budgeting/scheduling. The project need is justified by the significant coffee market in Australia and the competition from other coffee chains. Options analysis evaluates different expansion strategies, including opening new stores in major cities or focusing on existing outlets. The project definition outlines the scope, constraints, and deliverables, including improved product quality and service. The project approach details the management strategy, governance framework, reporting structure, procurement strategy, and communication plan. Finally, the report addresses budgeting, timelines, risk management, and the plan for realizing benefits. The report concludes that strategic expansion into major Australian cities, leveraging the brand's recognition and high-quality products, is a viable approach to success.

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PROJECT MANAGEMENT PRINCIPLES
STARBUCKS AUSTRALIA EXPANSION PROJECT FEASIBILITY
STUDY REPORT
EXECUTIVE SUMMARY

EXECUTIVE SUMMARY
This is project feasibility report of Starbucks expansion project in Australia. From the report, one
will discover that Starbucks actually needed this project. Also, even with its previous failures
with the project back in 2002, the project succeeded in 2016 and is still functioning and
operational. The report focuses on 5 main aspects of the project which are: the project need,
project options analysis, project definition, project approach, project’s budgeting and program
schedules and lastly references section. These sections have been explained in detailed by the
subheading of each section which will help the reader to understand the report deeper.

1. PROJECT NEED
Starbuck is one of the largest international companies in the world that has always thrived year
after year. It has outlets in almost all parts of the world. It specializes in the preparation of both
drinks (coffee, refreshing beverages, tea, bottled drinks) and food (especially those enriched in
protein) (Gopalakrishna et al, 2016). The company coffee brand is one of the best in the world.
However, it faces high competition from other coffee selling businesses in the world (Glowik,
2017). Almost a decade ago, the company had decided to open outlets in Australia. The project
was to open up new shops in the major cities of the country which became a successful project at
that time. However, the shops did not last long because after a short while a large number of
them closed (Gopalakrishna et al, 2016). This was as a result of the increased competition from
other coffee making businesses.
For instance, Gloria Jean's coffee house which still maintained its 450 branches in Australia and
Coffee Club maintained its 350 outlets while Starbucks only 22 outlets only. This shows that
Starbucks was almost outdone by the competitors. Research has shown that there are at least
6500 independent cafes in Australia which generate a total of $4 billion annually from the sale of
their coffee. In addition to that, there is a good number of citizens that strongly depend on coffee
before the start of their daily routine apparently, on average, most Australians take around 3-4
cups of coffee daily. In that case, Starbucks also has to find a way to share that profits made
annually. Basically, this is one of the reasons why the company wanted to open more outlets in
Australia (Santamaría et al, 2008). The company wanted to accumulate is shops in Australia just
like any other coffee making companies and as much as it has done in many other countries
(Glowik, 2017). However, the project was faced with many challenges which were closed after a
few years.
Starbucks Mission Statement
“To inspire and nature the human spirit- one person, one cup and one neighborhood at a time
(McGinn et al, 2010).
Starbucks Vision Statement”

“To establish Starbucks as the premier purveyor of the finest coffee in the world while
maintaining our uncompromising principles while we grow”
1.2. Service Delivery Requirements
Every business organization must ensure that the services or products t offers to its customer are
of the best quality. Businesses should have trained, experienced and qualified employee to serve
their customers (Gibson et al, 2007). With this kind of manpower, the quality of the product or
service will certainly be of good quality and professional (Pala et al, 2012). Also, the employee
should be able to respect and serve the customers with dignity. This will certainly come from the
employee skills and attitude. In the case of Starbucks, the quality of its product (coffee) and
services should be beyond what the customers expect. The company closed its outlets simply
because they could not manage the competition from other companies. The companies managed
to extract some the techniques that Starbucks used and made them their own. This improved their
coffee quality and improved their service delivery as well. However, Starbucks should have
improvised other better methods to improve their coffee quality and service delivery but did not.
1.3. Project Objectives
Every business organization must have objectives and goals for a certain project or change. The
objectives are basically the guidelines for the business. They give the employees a purpose for
them to continue working in the business. The setting of objectives provides the entire
organization with a long-term goal and purpose to work towards. Furthermore, the objective
setting provides a business with new ideas on how to improve and develop its operations. When
Starbucks started this kind of project, some of its objectives included:
• To maintain Starbucks standing as one of the most recognized and respected brands in the
world
• To be the leading retailer and brand of coffee in each of its target markets by selling the finest
quality coffee and related products and by providing each customer with a unique Starbucks
Experience
1.4. Critical Success Factors

These refer to business aspects that increase its growth, development and success chances. This
also applies to the case of every project. Every project manager has to ensure that the project’s
success factors are utilized effectively and efficiently. In the case of Starbucks expansion project,
the following are some of the critical success factors:
• Strong market share position and Global brand recognition
• Production of high-quality products and services
• Strong customer base loyalty
• Diverse and unique product mix
• Great appeal for of its shops and outlets
• Reasonable prices of its products
1.5. Organizational Change
This is about reviewing, controlling and modifying the business strategic structures and
operations. This refers to aspects dealing with communications, management techniques, supply
chain methods, investment methods and market competition among other things. Many
businesses desire to implement organizational change with the aim of improving and developing
the organizational operations. Therefore, in the case of Starbuck Company, the expansion project
was aimed at increasing its outlets, extending its market share, increasing profits to name a few
things. This means that the company had to deal with changes in the different departments. Like:
• The communication department- effective and efficient communication was required
especially from the new stores
• Finance and accounting department- funding was needed for the expansion to be possible
• Human resource department- involves the hiring of new employees in almost all
organizational departments

• Management team- new managers had to be hired and even others transferred to the new
store locations
2. OPTIONS ANALYSIS
2.1. Options Considered
Before any project manager decides to start working on a project, they have to evaluate and
analyze any possible solution. The business should also look for other better ways to solve the
problem or a different way to inflict change in the organization. Therefore, the organization’s
management and the project manager should be able to choose the best scenario or option that
will serve the purpose and achieve projects objective. In that case, Starbucks had already decided
to expand its operations in Australia. With this as the main aim, the company had some of the
following options that were weighed according to their ability to achieve the business’s
objective.
Option 1: To open new stores in the chosen locations
Option 2: To work on improving and developing the few store that are already existing in those
locations
Option 3: To open new stores in both the new chosen locations as well as other locations (small
cities and towns) in the country
2.2. Options Evaluation Criteria
The criteria that accompany should use in accessing its project options should be able to achieve
the project’s objective and goals. Also, they should be in a position to uphold the company’s
vision, mission, values and objectives. In other words, this is the criteria that Starbucks Company
used as well. It was a result of an agreement between the company management team, business
stakeholders and business owners.
locations option Criteria Reason
Sydney Opening new stores High population High population

and outlets levels
Strong customer base
loyalty
Great tourist
attraction site
levels
Great tourist
attraction site
Melbourne Opening new stores
and outlets
High population
levels
Strong customer base
loyalty
Great tourist
attraction site
High population
levels
Strong customer base
loyalty
Strong customer base
loyalty
Great tourist
attraction site
Brisbane Opening new stores
and outlets
High population
levels
Strong customer base
loyalty
Great tourist
attraction site
High population
levels
Strong customer base
loyalty
Great tourist
attraction site
New South Wales Opening new stores
and outlets
High population
levels
High population
levels
Great tourist
attraction site
Gold Coast Opening new stores
and outlets
High population
levels
Strong customer base
loyalty
Great tourist
attraction site
High population
levels
Strong customer base
loyalty
Great tourist
attraction site

2.3. Options Evaluation
The evaluation of Starbuck’s expansion project included analytical assessment of the
project costs, benefits and the risks involved. The evaluation was agreed upon by the
stakeholders, business owners and the management. The evaluation was decided upon
three main factors which are:
• Choice according to the population levels
• Choice according to the degree of consumer base loyalty
• According to the tourist attraction levels of the town
2.4. Recommended Option
The location options that are capable of meeting the company’s expansion needs is any
city or town that is considered major or one with high population. Some of these cities
and towns are Sydney, Melbourne, Brisbane, New South Wales and Gold Coast to
name just but a few. These are preferably the main towns suitable for Starbucks
expansion need. These towns are said to be some of best tourist attraction site in
Australia. The company’s product brands are also very popular and famous in these
towns. This reason increases their possibilities of increasing the customer base, market
share and segment. In addition to that, these cities will offer the company an opportunity
for future growth and more expansion. Also, these towns will certainly be able to
achieve the company’s expansion objectives and goals.
3. PROJECT DEFINITION
3.1. Scope Description
Starbuck’s expansion project scope is to develop, increase and improve its product
market in Australia by building and opening new stores. The new stores will be able to
accommodate more customers, offer better service delivery and provide better quality
drinks and food. The stores will be located in very strategic areas of the town and will be
many in numbers. The project should work on methods of increasing the popularity of
the company’s product.
3.2. Constraints and Dependencies

Few constraints have been identified for the Starbuck’s expansion in Australia. All the
individual and organizations involved in the project are advised to remain mindful of
these limitations to ensure that they do not affect the project scope, budget or time
schedule. Some of the constraints are:
• Inadequate qualified, experienced and skilled employees
• Project must have been completed in less than one year
• The project must be completed within budget, time and scope.
Some of the dependencies are:
• Project budget and project cost
• Project start time and project end time
3.3. Scope Management
This involves the control, directing, organizing and planning all the activities and aspects
needed in a project scope statement. The following steps were taken:
• Planned the scope management
• Gathered the project needs
• Defined the project scope
• Project Deliverables
• Came up with work breakdown structure
• Validated the scope
• Took control of the project scope
3.4. Project Deliverables
Several deliverables or results will come as a result of the Starbucks expansion project.
For instance:
• Better quality Starbucks beverages and foods
• Better quality services
• Better priced products
• Increase in the company’s profits in general
• Increased product market share and segment
3.5. Project KPI’s

Some of the main KPI’s for Starbucks expansion Australia project are:
• Produces and delivers better quality beverages and foods
• Offers better quality services
• Offers a variety of and consistent beverage brands and food types
4. PROJECT APPROACH
4.1. PROJECT MANAGEMENT STRATEGY
4.1.1. Project Structure
This basically gives a definition and list of what the project team members will be using
in the whole process. In the case of Starbucks expansion project:
• The team members were to communicate to the stakeholders and business owners
through the project team leaders.
• The project team should ensure that any activities they undertake do not affect the
project's budget or scope. Therefore change management should be effective and
efficient.
• The team members should perform their roles exactly as assigned
• The team should plan and be prepared for any risk that may arise
4.1.2. Project Governance Framework

It provides a project manager with a structure of procedures, decision making models
and materials for managing the project with the aim of being completely successful (Too
et al, 2014). It is used to control the project activities and team (people involved) and
ensuring that they are consistent and comprehensive.
4.1.3. Project Reporting Structure
This helps in indicating who should report to who. In Starbucks project, the reporting structure is
of the vertical form, i.e.: project director, project manager, group leader, rest of the project team
members.
4.1.4. Procurement Strategy
This involves the understanding of the projects objectives, aims, purpose and constraints as well.
In addition to that, the input in the strategy should be from both the business owners,
stakeholders and project team (Rajeh et al, 2014). The following was the procurement strategy
for Starbucks during the expansion project in Australia:
 The objectives were as an input result from the stakeholders, business owners and project
team members.
 The constraints were identified, evaluated and analyzed extensively and later solutions
were sort
 Some risks were identified as well e.g. product unpopularity and solutions sort as well