STARBUCKS FAILURE IN AUSTRALIA

Starbucks Failure in Australia

Starbucks Failure in Australia

Significance of Strategic Planning

The significance of economic to the strategic development in any business is the ability to benchmark economic environments that add to enhance revenue percentage, business increase and market wiz. Starbucks are not famous only for quality coffee and rapid expansion on the world, but by offering a "third place", i.e. a place where customers can take time off to enjoy a good cup of coffee. That is why in Starbucks is taken into account any detail, however, small it is reflected in its motto "everything matters". Since Starbucks customers come to form an impression, and that the reputation of the brand and quality coffee are two fundamental aspects for the company. Each store is carefully designed to highlight the quality of all things customers to watch, hear, smell or taste. The pictures, music, aromas, surfaces and coffee should send the same subliminal message to the customer feel satisfied and create a sense of loyalty to the brand. Starbucks maintain its image using fresh, colourful posters to evoke different seasons and enrich the brand with an impact of visual interest. Starbucks pay attention to everything around customers as the style of the chairs, the floor texture and so on (Werbach, 2009, Pp.36-45).

Starbucks Failure in Australia

Starbucks, founded in 1971, is the largest coffee chain in the world. It has about 16,226 local staff located in 44 countries. The Starbucks chain crisis took aggressive shape in 2800. The largest chain of coffee shops worldwide closed 61 of the 85 stores it has in Australia and cut about 700 jobs. The closure of more than 71% of its stores in Australia completed on August 3. It was part of a cost reduction plan that involves the dismissal of nearly 700 workers. There was, to date, 980 employees working at Starbucks Australian subsidiaries (Wailes, 2008, Pp.96).

Howard Schultz, CEO of the coffee chain, said in a statement that removal of the establishments "underperforming" in Australia is due to conditions in that country, they do not reflect the situation in other parts of the world. The remaining 23 branches will continue to operate in the three largest cities in Australia: Sydney, Melbourne and Brisbane. The chain faces on Australian soil, a culture of European-style cafes dominated by neighbourhood cafes, often stronger teas sold at lower prices. Globally faces forward in the cafeteria of McDonald's and Dunkin Donuts (Hota, 2008, 508-025).

In early July, the company announced the closure of 600 unprofitable stores in the U.S. The disappearance of these establishments, which must be realized for the first half of 2009, it was decided in response to declining clientele in its home market, resulting from the deepening crisis in the world's largest economy. Schultz himself is brutally honest in pointing out where Starbucks failed; admitting he now has too many U.S. stores, which is "cannibalizing" sales of branches that are close to each other (Mintz, 2008).

"When you have success at this level for so long ...