Starbucks' Australian Experience

Starbucks' Australian Experience
Case Code: BSTR304
Case Length: 24 Pages
Period: 2001-2008
Pub Date: 2009
Teaching Note: Available
Price: Rs.400
Organization: Starbucks
Industry: Food and Beverage
Countries: Australia; Global
Themes: International Business, Globalization Business
Starbucks' Australian Experience
Abstract Case Intro 1 Case Intro 2 Excerpts


Starbucks in the Land of the Kangaroo

Entry & Expansion
Starbucks entered Australia through its wholly-owned subsidiaries Starbucks Capital Asset Leasing Company, LLC and Starbucks Coffee Company (Australia) Pty. Ltd. (a joint venture between Markus Hofer (Hofer) and Starbucks Coffee International). Company owned and operated retail stores were opened in quick succession...

Promotion of Starbucks in Australia
The Starbucks brand was intended to be an "affordable luxury"-the customer was offered specialty coffee in a special ambience which was available at a premium price. In-store, Starbucks attempted to maintain the same kind and level of experience that its customers, world-wide enjoyed...

Strategic Retreat
With its assertive expansion strategy in Australia, according to analysts, Starbucks had become a symbol of Americanization and commercialization. The fact that it was available everywhere was one of the causes behind the fall of its premium image...

What Went Wrong in The Australian Brew?

Starbucks became the 'third place' for Americans who got hooked to the unique blend of dark roasted Arabica coffee beans freshly brewed and served as an "affordable luxury"in an ambience very similar to the Italian espresso café. It was a new experience for the Americans who were used to the 'on-the-go' instant coffee taste. Spurred by this success, the company began its expansion drive in the Asia-Pacific Rim region. It was yet to set foot in the European markets when it entered Australia in 2000...

Economic Forces Push Starbucks Farther Down

In September 2008, it was reported that in the quarter ended June 2008, Australia's economy had grown at its slowest in over three years. Household consumption dropped by 0.1 percent in the same quarter, compared to a growth of 1.1 percent on an average in the last fiscal. Since 1993, this result was said to be the worst...


Starbucks, like most companies, faced difficulties in the international markets that it entered. While in China and Japan it had to compete against the well-entrenched tea-drinking tradition, in France it was the sophisticated coffee culture which proved a challenge for the company...


Exhibit I: Condensed Consolidated Unaudited Statements of Earnings/ (Loss) of Starbucks Corporation
Exhibit II: Comparison of Planned Against Actual Company-Owned Store Openings in the International Market
Exhibit III: Starbucks' Retail Product Line
Exhibit IV: Starbucks' Critical Success Factors in International Operations
Exhibit V: Comparison of Store Formats Based on Numbers as of FY End 2007
Exhibit VI: Australia & Coffee
Exhibit VII: List of 61 Closure Locations in Australia in 2008
Exhibit VIII: The Starbucks Logo
Exhibit IX: Coffee Lingo in Australia
Exhibit X: Indicative Region-Specific Population Density in Australia
Exhibit XI: List of 23 Post-Closure Locations in Australia

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