Extended Essays 2021

Conclusion

When expanding into Australia, Starbucks’ failure was caused by a combination of its rapid growth strategy,

the GFC and poor marketing strategies. However, the success of competing brands and of Starbucks in China,

suggests that the GFC was not the main cause of Starbucks’ failure in Australia . Furthermore, the combination

of Starbucks’ failure to adequately consider Australia’s geographic consumer profile, and the many

shortcomings of its marketing mix, attributed to Starbucks’ failure. Faults within the marketing mix included

the lack of catering to the sophisticated Australian taste in coffee rather than American’s preference for sugary

beverages, the lack of above-the-line promotion, Starbucks’ inability to build strong relationships and the

higher price that Australian customers were not willing to pay.

However, due to the limited scope of this essay, other factors such as human resources and finance strategies

could not be investigated. Thus, future investigations may entail analysis on how Starbucks incorporates other

business factors such as leadership, human resource management and finance strategies and how this led to

the success or failure of Starbucks in other countries. Starbucks’ failure in its marketing strategies had a

negative impact on different stakeholders, including the dissatisfaction of customers, loss of jobs for

employees ’ and loss for the business owners’ and investors. Starbucks is now attempting to learn from its

mistakes to avoid underestimating the importance of adapting marketing strategies when entering a new

market and is attempting to re-expand into Australia. This is a lesson necessary for every company to consider

before expanding into new markets.

This essay successfully answered the research question “To what extent can the failure of Starbucks’

expansion into Australia be attributed to its marketing strategies?” Alongside the relatively minimal role of

the GFC, the fundamental reasons for Starbucks’ failure in Australia were its marketing and poor growth

strategies.

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