Extended Essays 2021

This customer perception, as seen in Figure 1, of Starbucks’ being a high -end coffee chain does not adapt well

to the Australian market as Australians prefer having a relationship with their local barista through

independent cafés. Furthermore, before Starbucks’ expans ion, the coffee industry in Australia already had a

high market concentration, thus increasing the risk of Starbucks high-end, chain approach.

Figure 1 positioning map (Haskova, 2015)

However, the limitations of this model must be considered, such as its basis on a small sample of customer

opinions and therefore its possible unfair representation of data. Thus to an extent, Starbucks’ failure to

understand the Australian market induced its failure.

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