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Introduces Starbucks’ global reach and explains how the company expanded quickly into Australia. It sets up the question of why the chain struggled so badly there.
Starbucks has coffee shops all over the world there are more than 28,000 locations and 76 markets from Shanghai to Guantanamo Bay and in China a new Starbucks location opens up every 15 hours but there is one continent thatseems uninterested in the hype over the seattle-based coffee chain and that continent is Australia it's proven to be one of the toughest markets in the world to break into so tough in fact that Starbucks closed more than two-thirdsof its stores on the continent back in 2008 so what went so wrong with Starbucks and Australia to answer that let's go back to July of 2000 when Starbucks opened its first Australian shop and Sydney from there itexpanded fast by 2008 Starbucks had 87 stores across the continent
Explains how Starbucks grew too fast in Australia without adapting to local conditions. The section covers mounting losses, store closures, and the impact of the 2008 financial crisis.
in one country is that they thought that their business problem could just roll out to a different environment and there was no need for them to adjust but that was the problem they tried to grow the empire toofast Starbucks rapidly opened up multiple locations instead of slowly integrating them into the Australian market when they launched they launched too rapidly and didn't give the Australian consumer an opportunity to really develop an appetite for the Starbucks brandsthey also moved into regional areas into outer suburbs of major cities and so for the Australian team it was almost like it was too available for them and so there wasn't this point of differences want is made forStarbucks and it wasn't an organic growth which is what we very much saw in the US and its first seven years in Australia Starbucks accumulated a hundred five million dollars in losses by 2007 Starbucks Australia was hanging on
by a thread taking big loans from the US totaling up to fifty four million dollars and in 2008 Starbucks announced it was shutting down 61 stores but of course 2008 was a difficult time for businesses due to thefinancial crisis along with Australia closures Starbucks also closed 600 underperforming American stores but even still such a retreat in Australia was embarrassing for the brand when they're shutting down 70 doors for the Australian consumer when they when they
Describes Australia’s established café culture and why Starbucks’ sugary, expensive menu did not fit local tastes. It contrasts Starbucks with the preferences Australians had already developed.
did leave the market or at least a large number of bestowals were shut down they didn't really care it's partly because Australians are spoiled for choice when it comes to coffee Australia's coffee market is one of the biggestin the world the industry is expected to hit more than six billion dollars in total revenue in 2018 they've been immersed in nuances of cafe culture since the mid 1900s when Italian and Greek immigrants began traveling to thecountry the immigrants introduced Australians to espresso by the 1980s Australians were fully engulfed in cafe culture they've also grown accustomed to specialty menu items like a flat white or an Australian macchiato so cafes in Australia were born outof like the Italian culture of you know meeting of friends and knowing your local barista and it being kind of like a local meeting place where everyone knew each other and that coffee was just a part of that
and then Starbucks came in with what was more of an american-style like coffee culture which is essentially just like coffee is a product Coffee is a commodity coffee is like like cooking up in the morning it's caffeination Starbuckshad a basic menu and offered more sugary drinks which most Australians didn't like in Australia so we don't really want a coffee that's the hundreds of ounces lots of sugar and everyone plus Starbucks charge more than local campaignsso Australians instead opted to pay less for coffee they liked from a local barista they trusted and so when you come in with this peak like and they're all gonna be to go focus it just was the completewrong market for what what the Australian was used to but there is one American coffee company that's thriving in Australia founded in Chicago and now based in Australia Gloria Jean's got the traction in Australia that Starbucks couldn't Gloria
Shows how Gloria Jean’s succeeded in Australia by adapting to the market and offering a broader coffee menu. It then shifts to Starbucks’ plans for Italy and its attempt to avoid repeating past mistakes.
Jean's has more than 400 Australian locations and serves more than 35 million consumers in Australia each year so what is Gloria Jean's doing in Australia that Starbucks isn't well the company attributed to success to two Australians who franchisedthe business in their home country shop started to show up in Australia in 1996 fast forward to today the company has a presence in every Australian state the reason its menu the chain offers a wide variety of espressodrinks and specialty coffee failing to adapt its menu to Australians coffee culture proved to be a mistake for Starbucks and the company faces another challenge later this year Italy Starbucks is opening its first store in Milan in late2018 home of the espresso Italy is rich in cafe culture but according to Starbucks it's not going to make the same mistakes that it did in Australia the company said that it would develop in Italy with humility and
respect for its coffee culture it announced I would be opening a roaster II which is not your average cafe it gives customers a chance to see coffee beans roasted and processed before their eyes so there's a chance thatit won't struggle like it did in Australia but Starbucks isn't admitting defeat in Australia either Starbucks is staging a comeback on the continent in 2014 Starbucks locations in Australia were purchased by the Mount Waverley base withers group Starbuckstold CNBC that since its sale to the withers group the company learned a lot so this time it's taking a different approach to putting Starbucks on the continent
Covers Starbucks’ comeback strategy in Australia, focusing on serving tourists rather than locals. The video closes by suggesting international visitors may be the key to the brand’s future there.
Chinese tourists like to be very successful in China and it makes a lot of sense for them to build out because there are people looking for something that's home it now with 39 locations in Brisbane Melbourne the GoldCoast and Sydney areas this time it's not looking to appeal to Australians but instead the coffee giant hopes to be a familiar face for tourists visiting popular vacation destinations in Australia free Australia is always been a high-volume touristmarket not the same thing in terms of international students at our universities potential opportunities for them and we're starting to see Starbucks enter into some large chocolate malls here in Australia as well Australia welcomed nine million tourists from2017 or 2018 and those international visitors spent more than 30 in dollars in 2017 alone so tourists could possibly be the key to keeping the company afloat and preventing another downfall
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