Starbucks
In 2000, Starbucks entered Australia aggressively, planning to replicate the café culture that dominated American markets.
Starbucks' Australian failure represents the definitive case study of the Phenotype Fallacy - copying the visible expression of success without understanding the underlying organizational DNA that made it work in its original environment.
In 2000, Starbucks entered Australia aggressively, planning to replicate the café culture that dominated American markets. They opened 90 stores in seven years. In 2008, they closed 61 of them, losing $143 million. The failure wasn't operational - it was genetic. Starbucks' DNA (standardization, convenience, scale) was adapted to American conditions where coffee culture was weak. Australian conditions required different DNA: craft quality, local identity, barista skill.
The lesson is profound: your success in one market is phenotype - the expression of organizational DNA in specific environmental conditions. When the environment changes, the same DNA may produce failure instead of success. Starbucks tried to copy the organism without understanding the environment.
Cautionary Notes on Starbucks
- Failed to test DNA fitness in new environment before scaling
- Confused American phenotype with universal genotype
- Ignored local coffee culture DNA requirements