Reasons Starbucks Failed in Australia: While the majority of Australians are coffee lovers, however, they’re not big fans of Starbucks. Learn about eight reasons Starbucks has failed in Australia.
Many foreigners who reside in Australia find it difficult to find a Starbucks shop to get their daily beverage. I experienced the same thing when I was on the continent. I was disappointed when I found out that the sole Starbucks store I could locate in the region, was shutting down.
I came up with this article to clarify the reasons Starbucks did not succeed in Australia. In the final post, you’ll discover what they did to remedy the situation when it was unsuccessful on this continent. Enjoy!
8 Reasons Starbucks Failed in Australia
Speedy entry
When Starbucks began expanding its operations across Australia It opened many outlets in large cities as well as in regional locations. The quick entry led to its decline since it was unable to maintain its worth. The company did not provide Australians enough time to build an appreciation to the company’s brand.
Because of the rapid development of many Starbucks stores, the coffee chain was made accessible for Australians which diminished its importance. Instead of taking this approach it would have taken the time to expand, while taking into account the needs of its customers.
It was possible to start with about 20 outlets in the major cities of Australia for a short period of time. This would have allowed them to build a loyal customer base. If, for example, the company had devised a an approach to track purchases and reward loyal customers they would have been successful in Australia.
Failure to research the market
Starbucks also made the error of opening its stores in Australia without examining how to market coffee. Starbucks was of the opinion that Australians would be a fan of the coffee as they are fluent in English similar to Americans.
Although many people on the continent are devoted to coffee however, it is true that the Australian market is quite distinct from that of those in the US market. A thorough analysis of this market might have stopped Starbucks from crashing in Australia.
The coffee culture in Australia
It is believed that the Italians and Greeks who emigrated to Australia brought with them a culture of coffee that a majority of the continent were able to embrace. When Starbucks opened outlets in Australia, they was unable to grasp its Australian cultural ethos of coffee. This is one of the eight reasons Starbucks did not succeed in Australia.
The Aussies don’t view coffee as a mere product. It is for them an experience. For them, it is an experience. Australian coffee culture is more concerned with socializing, and less to be concerned with coffee. A majority of Australians have acquaintances with baristas at local coffee shops on a personal basis and get their caffeine from them. It’s not easy for these clients to pick an imported brand instead of a barista they’ve had for a long time.
The majority of Australians are also known to meet in local cafes with colleagues to relax and sip a cup of coffee. When Starbucks launched its cafes on this continent, it was unable to be competitive with Australia’s Australian the coffee scene. If it were only Starbucks had taken the time to study the Australian market prior to opening its shops in this region it would have gotten a grasp of this particular coffee culture.
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Sugary coffee
In contrast to Americans, Australians do not drink a lot of sugary drinks particularly at the beginning of their day. When Starbucks launched outlets in Australia and began serving sweet drinks the same way they did in other countries like America.
Since Starbucks coffee didn’t appeal to the palates of the majority Australians the majority of people preferred local cafes instead of this particular brand. [Reasons Starbucks Failed in Australia]
Inability to adjust to the needs of local customers was a factor in the demise in the success of Starbucks to meet the needs of customers in Australia. Starbucks ought to have adjusted the majority of its offerings to meet the needs of customers in order to avoid this.
High prices and low wages
The majority of Starbucks coffee drinks are sold at the price of. The coffee chain didn’t perform well in Australia as the majority of consumers weren’t willing to shell out more on drinks when they can purchase the same beverage at local cafes at less cost.
When Starbucks opened a variety of coffee stores across this continent, they provided jobs for Australians. The issue with this company is that it offered very little salaries for Australian baristas. This is among the reasons why eight of Starbucks were unsuccessful in Australia.
Competition from local cafes
While Starbucks was a household name, however, it was in competition with cafes that were local to Australia. This was due to the fact that Australians had a myriad of choices to choose from prior to deciding on Starbucks. A lot of Australians thought that Starbucks had a simple menu in comparison to what local cafés offered.
The Great Recession
Starbucks has shut down most of its outlets in Africa in the Great Recession in 2008. The economic downturn impacted Starbucks across the continent as many customers were unable pay for its beverages. They also weren’t willing to invest their money in the latest coffee brand.
Because it was a tough period for businesses everywhere, Starbucks made losses on many of its stores and then shut them down. There were only 20 Starbucks stores remained in Australia after the economic crisis.
To stop the closing of many locations, Starbucks would have considered making adjustments to prices to prevent losing customers.
Australians failed to warm up to the brand’s culture
Alongside other than the Australian coffee culture we discussed, Starbucks also has its unique culture. For instance, the company creates custom drinks and experiments with various flavors.
Because the majority of Australians weren’t in with the company’s style of operation, it negatively impacted Starbucks stores across the continent.
Now that you’ve learned the eight reasons why Starbucks did not succeed in Australia Let’s take a take a look at what the company did after it failed.
After Starbucks was hit with losses in the millions in Australia and took its lessons from its failures. It devised new strategies for operating cafes in Australia. The company hasn’t abandoned Australia as it is opening its stores slowly in shopping centers.
Starbucks, the world’s largest coffee shop, has also opened shops in tourist destinations to draw visitors to the continent. The strategic location of coffee shops in Australia is now allowing Starbucks not to directly compete against local cafes. [Reasons Starbucks Failed in Australia]
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