SBS: Why Starbucks just can’t crack the Australian market

I’d be fascinated to know what Starbucks executives tell themselves about why they failed to penetrate the Oz market. There’s a book in there somewhere. I remember telling American business author Shel Israel ten years ago (at a tech conference in Scottsdale, Arizona) that Starbucks was shit coffee. Maybe this should be your next book, Shel?  Personally I’ll only go to Starbucks when I’m desperate. LAX. Cedar City, Utah. Or if I need free wifi. Otherwise, I’ll seek out great coffee with unique ambience. A cafe should be an experience – it’s not just about the coffee. I always advise clients to be clear about what problem they are solving for their customers. I don’t think cafés are in the coffee business. I think they are in the experience business – and the coffee is just one aspect (albeit an important one) of that experience.

I go to cafes to work and to have meetings. The coffee is just a bonus. If the cafe doesn’t provide me with a decent meeting / work environment, then they aren’t meeting my needs – regardless of how good the coffee might be.

However the reverse is also true – if you’ve created a decent working experience (and I think Starbucks does that quite well), then the coffee  (and service) also needs to be great to keep me coming back.

So what can we learn from Starbucks’ failure in Australia?

1. Even huge companies get it wrong sometimes. Did they research the Australian marketplace before they launched here? Did they realise our coffee culture is markedly more mature than most of the United States? I’m guessing they believed their own hype and didn’t pay enough attention to the market conditions.

2. One size does not fit all. Starbucks might be been able to work in Australia if they had paid more attention to their coffee. It’s not that hard to get coffee right – thousands of cafes in Australia do it every day. It also shouldn’t be hard to make money from running a cafe.

Of course, it may be that coffee chains just don’t attract the interest of Aussies. Gloria Jeans was sold to a Singaporean company in 2013 for $36m.