Sophisticated Australian coffee culture sinks Starbucks

Wednesday, 30 July, 2008

While it’s of little use to the 700 Australian Starbucks employees who are looking for new jobs today, you’d think any coffee franchise would undertake some reasonably comprehensive market research before opening 84 cafes, some in fairly close proximity to each other, and in very quick succession, particularly in a country that enjoys an established coffee culture.

Associate Professor Nick Wailes, a strategic management expert at the University of Sydney, said Starbucks had failed to understand the Australian market. “Starbucks’ original success had a lot to do with the fact that it introduced European coffee culture to a market that didn’t have this tradition. Australia has a fantastic and rich coffee culture and companies like Starbucks really struggle to compete with that.” The president of Starbucks Asia Pacific, John Culver, admitted: “I think what we’ve seen is that Australia has a very sophisticated coffee culture.”

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