Why did Starbucks fail in Australia ?

Australia is considered one of the toughest markets to break into and Australians are spoilt for choice when it comes to coffee.

Here are a few reasons the Seattle based coffee chain could not establish themselves in Australia :

Tried to grow too fast – Starbucks opened multiple locations across the continent in a short span instead of slowly integrating them into the Australian environment. This did not give Australians a chance to develop an appetite for the product. Starbucks failed to create a "want" factor among its customers.

Not adapting – Starbucks thought that they can just roll the existing business model to a different environment and that there was no need for them to adjust. The company continued to offer its sugary drinks which were not received well. Australian cafes were local meeting places where people came together and coffee was just a part of that but Starbucks looked at coffee only as a commodity.

Too much competition – Starbucks had a basic menu without specialty items like “Australian macchiato” which were offered at local cafes. Their drinks were also priced much higher which did not attract the customers.


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