Starbucks' Australian Experience
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Case Details:
Case Code : BSTR304
Case Length : 24 Pages
Period : 2001-2008
Pub Date : 2009
Teaching Note : Available
Organization : Starbucks Corporation
Industry : Coffee Retailing
Countries : Australia; Global
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Starbucks: Down Under? Contd...
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Schultz resumed the responsibility of CEO of Starbucks on
January 7, 2008, after a break of eight years from the day-to-day operations of
the coffee chain.
Commenting on the closures, Schultz said, "While this decision represents
business challenges unique to the Australian market, it in no way reflects the
strong state of Starbucks business in countries outside of the United States."3
The strategy in Australia entailed closure of 'underperforming' stores and
focusing on three metropolitan cities: Brisbane, Melbourne, and Sydney and their
surrounding regions.4
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This announcement followed the unprecedented event -
Starbucks recorded a net loss of US$6.7 million for the quarter ended June 29,
20085, with earning per share (EPS) being US$0.01 (Refer to Exhibit I for the
company's consolidated unaudited earnings statement for the quarter ended June
29, 2008, and also for the year ended June 29, 2008).
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There was simultaneously a drop in traffic in US
stores, another first in the company's history. Comparable-store sales,
an important measure of performance for the company, also dropped during
the period.
For the same 13-week period in 2007, the company recorded a net income
of US$158.3 million with an EPS of US$ 0.21.6
This loss was attributed by the company mainly to exceptional costs that
would be incurred in the closure of under-performing stores in the US
and Australia... |
Excerpts >>
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