Case Study Guided Answers
CASE STUDY QUESTIONS: Read and Complete case study “Starbucks and McCafe – a David vs. Goliath Battle?” on pages 350 – 352 of your text.
1. If you were the manager of or an adviser to Starbucks Australia, how could you use a SWOT analysis in deciding your strategy for the chain’s future in Australia?
In order to compete effectively in the Australian café market, Starbucks must be alert to: changes in opportunities and threats in the external environment; be equipped to take advantage of internal strengths; and be aware and realistic about its own internal weaknesses.
Conducting a SWOT analysis is a valuable tool in achieving these objectives.
Examples of issues in a SWOT analysis of Starbucks Australia:
Strengths
Strong financial and brand backing from the world’s leading retailer and roaster for speciality coffee in the world.
Company-owned and operated stores.
Operated in the Australian market more than 10 years, which means better understanding of it.
Loyal customers.
Consistent high quality of product and service.
The Starbucks atmosphere in stores.
Weaknesses
Still suffering some image problems due to it being perceived to be a US-based organisation and because of the closure of many stores in Australia.
High pricing.
Global expansion of Starbucks has slowed down.
Opportunities
Strong and still increasing speciality coffee market in Australia.
Increasing consumer interest towards speciality tea segments such as green tea and herbal tea.
Growing interest for premium roast coffee at home instead of instant coffee.
Potential to expand into other high-density areas outside the current concentration along the eastern seaboard of Australia.
Threats
Intense and increasing competition in a relatively saturated and maturing café speciality market.
Change in economic environment (i.e. GFC) affecting consumer spending.
Increasing cost of raw materials and currency fluctuations.
2. What competitive advantage(s) do you think Starbucks and McCafé each have? Do you
1. If you were the manager of or an adviser to Starbucks Australia, how could you use a SWOT analysis in deciding your strategy for the chain’s future in Australia?
In order to compete effectively in the Australian café market, Starbucks must be alert to: changes in opportunities and threats in the external environment; be equipped to take advantage of internal strengths; and be aware and realistic about its own internal weaknesses.
Conducting a SWOT analysis is a valuable tool in achieving these objectives.
Examples of issues in a SWOT analysis of Starbucks Australia:
Strengths
Strong financial and brand backing from the world’s leading retailer and roaster for speciality coffee in the world.
Company-owned and operated stores.
Operated in the Australian market more than 10 years, which means better understanding of it.
Loyal customers.
Consistent high quality of product and service.
The Starbucks atmosphere in stores.
Weaknesses
Still suffering some image problems due to it being perceived to be a US-based organisation and because of the closure of many stores in Australia.
High pricing.
Global expansion of Starbucks has slowed down.
Opportunities
Strong and still increasing speciality coffee market in Australia.
Increasing consumer interest towards speciality tea segments such as green tea and herbal tea.
Growing interest for premium roast coffee at home instead of instant coffee.
Potential to expand into other high-density areas outside the current concentration along the eastern seaboard of Australia.
Threats
Intense and increasing competition in a relatively saturated and maturing café speciality market.
Change in economic environment (i.e. GFC) affecting consumer spending.
Increasing cost of raw materials and currency fluctuations.
2. What competitive advantage(s) do you think Starbucks and McCafé each have? Do you