When Strategy Goes Wrong: Lessons from the Failed Strategies of Starbucks

Starbucks is known for their global reach and influence in the business world. However, despite their vast resources and expertise, Starbucks is not immune to failure when it comes to strategy. In fact, many MNCs have experienced costly setbacks and blunders due to failed strategies, which have impacted not only their financial performance but also their reputation and stakeholder trust.

In this blog, we will explore the reasons behind the failed strategies of Starbucks in Australia.

Everyone Loves Starbucks Unless You Are In Australia

Coffee in Australia is a vibe, it's about knowing the local cafe. About a speciality brewed espresso and meeting up with friends over coffee.

Starbucks come from the American School of Thought :

  • Coffee is a fuel
  • A necessity that you want every day
  • Everyone wants it quick

 Root Causes of Starbuck's Failed Strategy

Firstly, Starbucks failed to understand the Australian coffee culture, Australians strongly choose independent, neighbourhood coffee shops that serve specialised coffee blends and provide attentive service. The standardised menu and impersonal service of Starbucks did not appeal to Australian customers' regional tastes and preferences.

The price strategy employed by Starbucks in the Australian market was also uncompetitive. Starbucks struggled to compete in a market where consumers had a wide range of affordable options due to the company's drinks' much higher costs than those of neighbourhood cafes.

The Australian coffee market already had significant competitors for Starbucks, including independent cafés and well-known chains like Gloria Jeans and The Coffee Club. Because of this competition, Starbucks found it challenging to establish a presence in the market, especially given that it was unable to set itself apart from its rivals.


Due to a number of problems, including a lack of familiarity with the local coffee culture, an uncompetitive pricing plan, and strong competition from established players in the market.
more, culture is everything even a good product and iconic brand can't underplay it.


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