Discuss Starbucks’ failure in Australia, in terms of custom v. standardized business model and product adaptation.
A firm that is marketing multimillion-dollar wastewater treatment systems to cities has been unable to sell a new type of system. This setback has occurred even though the firm’s systems are cheaper than competitive systems and meet the U.S. Environmental Protection Agency (EPA) specifications. To date, the firm’s marketing efforts have been directed to city purchasing departments and the various state EPAs to get on approved bidder’s lists.
Talks with city-employed personnel have indicated that the new system is very different from current systems and therefore city sanitary and sewer department engineers, directors of these two departments, and city council members are unfamiliar with the workings of the system. Consulting engineers, hired by cities to work on the engineering and design features of these systems and paid on a percentage of system cost, are also reluctant to favor the new system.
Post your response to the following questions:
(a) What roles do the various individuals play in the purchase process for a wastewater treatment system?
(b) How could the firm improve the marketing effort behind the new system?
Click on the link to view this short video on Starbucks’ entry and struggle in Australia. Starbucks in Australia Video
Based on your review and analysis, post your response to these questions:
1. Discuss Starbucks’ failure in Australia, in terms of custom v. standardized business model and product adaptation.
2. The video mentions that Starbucks has not admitted defeat in Australia. Explain their repositioning strategy, and how focusing on a new target might lead to success.
3. If the revised strategy is working in Australia, what approach did Starbucks take to enter the Italian market?
Answer preview Discuss Starbucks’ failure in Australia, in terms of custom v. standardized business model and product adaptation.
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