1.

Identify unique characteristics of Australian coffee drinker

Australia’s coffee culture : mature and sophisticated
 have a sophisticated palate, enjoying coffee that straighter and stronger
 prefer smaller boutique style coffee shops
 willing to travel for a favoured cup of coffee
 opted to pay less for coffee from a trustful local barista

2. Analyse the mismatch of Starbucks and Australian consumer behavior

US culture Italian culture

The core product – coffee was not impressive, Australian has strong established Italian coffee
it brought its ‘American’ offering culture and dis- cerning palates.
Rely on the customer experience to generate Australian, whose loyalty often lies with a
word-of-mouth & their lack of advertising. specific barista.
Starbucks’ product line is limited primarily to This is a very different model to the domestic
coffee and not adapting the menu to the target coffee brand which has much more of a café
market feel to it.
Not delivering on their core promise of serving There were hundreds of independent cafés and
superior coffee in comfortable suroundings. coffee chains, where the coffee was generally
better and the staff knew their customers by
name.

3. How do you interpret lessons of Starbucks case?

1. Crossing international borders is risky and Always be prepared: Research the market
clearly Starbucks did not do their homework, thoroughly before entry
or ignored their homework
2. ‘‘Think global but act local” When in Rome, do as the Romans do: adapt the
core product or supplementary services to
associate with the target audience
3. Establish a differential advantage and then Give customers reasons to continue
strive to sustain it patronising brands.
4. Don’t lose sight of what made you Don’t forget the thing that made the unique
successful in the first place from the begining
5. Consider the viability of the business model Having a sustainable business model is
essential