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STARBUCKS – LEAVING AUSTRALIA?STARBUCKS – LEAVING AUSTRALIA?

Teacher: Truong Thi Phuong TrangGroup: 36k01.11. Bui Thi Ngoc Anh2. Nguyen Kim Ngoc3. Tran Hoang Phuong4. Ho Quoc Huy

ContentsContents

Background

Suggestion

Starbucks enters the Australian market

The Starbucks product range

The international expansion of Starbucks

I. BackgroundI. Background

Starbucks Corporation is an American global coffee company and Italian-style coffeehouse chain

Starbucks is the largest coffee house company in the world, with 19,972 stores in 60 countries

Starbucks Coffee Company was the leading retailer, roaster, and brand of specialty coffee in the world

II. The Starbucks product rangeII. The Starbucks product range

The company has more than 30 blends and single – origin premium abrica coffeThe company has more than 30 blends and single – origin premium abrica coffe

The company has more than 30 blends and single – origin premium abrica coffeThe company has more than 30 blends and single – origin premium abrica coffe

Starbucks US Brands LLC holds and owns the property rights to approximately 120 Starbucks Coffee Company patents and trademarks

Starbucks US Brands LLC holds and owns the property rights to approximately 120 Starbucks Coffee Company patents and trademarks

II. The Starbucks product range

III.The international expansion of StarbucksIII.The international expansion of Starbucks

1996

2003

2005

2007

Starbucks entered Japan

The number of locations worldwide totalled 6,400.

- Starbucks became the most successful international brand in coffee- It expanded its distribution network via joint ventures with other retailers

The company began to feel the pressure of over -expansion and enhanced competition from lower priced fast food chain and orther pressure

2008

2010

2012

2013

Restored the distinctive Starbucks experience and of refocusing on its diversified product range

In early 2010 the company announced that it expected to open thousands of new stores in China

Starbucks Entered Indian

Starbucks is planning to enter the Vietnamese market

VI. Starbucks enters the Australian marketVI. Starbucks enters the Australian market

Starbucks entered the Australian market in 2000.

Starbucks Coffee Company Australia was initially a

joint venture between Australian businessman

Markus Hofer and Starbucks International.

The first branch was in Sydney's CBD and eventually

84 outlets were opened - mainly in the major cities.

1. Reasons for Starbucks entering the Australian market

1. Reasons for Starbucks entering the Australian market

The growth in the coffee market, and Australia's strong cafe culture.1.

2.

3.

Australia became a nation of coffee drinkers, with consumer demand for coffee growing by 29% over the previous five years.

The growth of the cafe business, with the average cafe making over 20% profit per year.

2000, it was one of the biggest coffee chains globally

Mid 2008, Starbucks closed 61 of its 84 Australian stores.

2. Problems encountered in the Australian market

2. Problems encountered in the Australian market

Site selection – city location - won by the other brands

Failure - overestimation of its own brand popularity

Underestimation of the existing coffee market in Australia

1

2

3

Starbucks did not adapt itself to Australian culture

Australia - mature and sophisticated coffee market

Follow the American product lines

Not try to customise – Australian taste - drink high quality, European-style coffee

Pricing

policy

Pricing

policy

Startbucks can’t competeStartbucks can’t compete

Fierce competition - lower prices

and high quality of other chains

So expensive

Up to AUS$ 3.4

Product PlacePricing Competitor

Lost $140 million on its Australian venture. In 2007, Starbucks lost $36

million on revenue of $65 million, resulting in a loss of 681 jobs

Lesson – “one-model-fits-all‘”market philosophy was no longer a valid strategy.

Scaled back its operations

Downsized and consolidated its remaining businesses

The future for Starbucks in AustraliaThe future for Starbucks in Australia

1

2

3

V.SuggestionV.Suggestion

Customer’s taste,

preferencies

Multinational strategy

Customer’s taste,

preferencies

Competitor’s trengths

and weeknesses

Adapt to a wide variety of products

and marketing strategies

Studied consumer preference

s

Potential markets

Recognize the higher value of Starbucks products

LessonLesson

Lesson

Think global, but act localThink global, but act local

In-depth research In-depth research

Strengthen business's successStrengthen business's success

Consider viability of the business modelConsider viability of the business model

Product - uniqueProduct - unique

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