Extended Essays 2021

In the ANSOFF matrix in Figure 2, Starbucks was situated in the market development segment as it was

expanding into a new market. However, this expansion was unsuccessful as Starbucks failed to consider the

aforementioned differences between the Australian and US markets. If Starbucks had considered these

differences, it would likely have led to product development that appealed to the Australian consumer, falling

into the diversification category. Although risk increases the further a marketing plan diverges from market

penetration, this was the only appropriate option for Starbucks’ to succeed in Australia .

However, ANSOFF matrixes don’t take into account the competitors or reward of risk, thus conclusions

should not be drawn from merely this Figure. It can be concluded that Starbucks’ failure to adapt its product

to the Australian market hindered the success of its expansion into Australia.

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