Starbucks Failure in Australia Essay

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Starbucks Failure in Australia

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
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Service Marketing Issues
As Stated previously, one of the main reasons why Starbucks failed in Australia is due to the fact that they lost sight of their customer orientated focus. This has a lot to do with Starbucks Service & Marketing issues. In 2008, Starbucks close down every store in the US simultaneously for three and half hours for staff training, this unfortunately was too late for Australia. On July 29, 2008 Starbucks announced to the public that it would be closing off 61 of its 84 Australian shops or 73% by August 2008. With this massive loss of Starbucks Stores in ausralia not only did it cost a Starbucks Company, but it also costs Australian citizens 685 jobs. In 2008 was the time when many became aware of Starbucks decline in business due to the store shut downs, but what many didn’t see was that by 2007 Starbucks was already hemorrhaging business. Over the seven years Starbucks was operating in Australia they accumulated losses of around $143 million.

One of the main reasons why Starbucks was able to hold on for the eight years that they were in Australia was because of its US parent companies support. Even though Starbucks close down many of its shops, they still kept over and 23 stores around Sydney Melbourne and Brisbane. However many have passed them important question that is 23 stores enough to support itself in the long-term