Jack Manning
Wander down any of Dublin’s inner streets and the success of Starbucks is striking. Their cafés bespeckle the city’s thoroughfares more than fifty times and their expansion is by no means slowing. As determined by The Irish Times, “Ireland is now home to more Starbucks, per head of population, than anywhere else in Europe.” Vying for dominance of the caffeine-craving market with Insomnia and Costa, the firm maintains a solid foothold by every metric. So where did the company go wrong in Australia? Sydney has more than eight times the population of Dublin, yet operates thirty-three less cafés.
Australians drink on average three or four cups of coffee every day. The country is home to 6,500 independent coffee houses which bring in $4 billion annually. Starbucks has seen success practically everywhere else in the developed world, operating almost 30,000 stores in 75 countries. Was this not a match made in heaven?
The story of the mega-chain’s relationship with Australia’s multi-billion dollar coffee market begins in Sydney, where their first store opened in 2000. It opted to spread at a somewhat frantic pace throughout Australian cities and suburbs – as well as in more rural regions. By 2008 Starbucks operated 87 cafés across the continent. This hasty strategy of capturing a portion of Australian market share through swift expansion rather than gradual and incremental integration proved to the firm’s detriment.
The firm did little to adjust its business model to adapt to the Australian market and as a result presented a café experience at odds with the indigenous coffee culture. It opted to copy-paste its formula of breakneck expansion and fast service, having seen tremendous results in North America, Europe and Asia. This conflicted with Australians’ long-established appetite for a slower, more relaxed and thoughtful café experience.
Rapid growth of a distinctly American mega-chain was perceived as a commodification of their more community-oriented coffee scene, and this left a for-once unwelcome bitter taste in Australian coffee-lovers’ mouths. Starbucks also charged more than native counterparts, and consumers were less than keen on the beverages’ higher sugar content.
All of this led to a spectacular crashing out of the market, seeing over $100 million in losses in its first seven years. After borrowing over $50 million from its American division to stay afloat, Starbucks shuttered a whopping 61 stores in 2008.
But the firm hasn’t thrown in the towel. In 2014 Starbucks entered into a partnership with the Withers Group, the multinational which operates 7-11, in an effort to reinvigorate the brand. It now operates in 39 locations – up from 22 in 2014 – in Sydney, Brisbane, Melbourne and the Gold Coast. The renewed attempt to instil love for Starbucks’ coffee in Australia focusses no longer on Australians themselves, but visitors enticed and comforted by a familiar brand. It chooses to open stores in locations abuzz with tourists – and no wonder. More than nine million international visitors make landfall down under every year, and, according to Tourism Australia, 2018 was the third consecutive year that tourism has outpaced the growth of the Australian economy.
Starbucks sees such swelling numbers of tourists – many of whom are doubtlessly already in love with the brand from back home – as their ticket to success on the southern continent. Is the company’s newfound tourist-centric vision a brew for success, or is it high time they wake up and smell the coffee?
The Trinity Student Managed Fund recently held its first Fintech Conference on the evening of Monday February 11th. The objective of this new event was to allow Trinity students to understand the impact of fintech on financial services and the opportunities that are available in the industry today. The evening consisted of a dialogue between a panel of revered leaders in the industry discussing topics such as the impact of blockchain and artificial intelligence on the industry as well as what the future holds.
Fintech (financial technology) is changing the financial services industry and creating new opportunities and challenges for everyone, from consumers to producers, advisors to clients.
Global investment in Fintech reached $57.8 billion in the first six months of 2018, highlighting the scale of the investment in this area. According to the Fintech & Payments Association of Ireland (FPAI), fintech in its broadest sense consists of every area of technology and innovation in the financial services sector, including payments, trading and foreign exchange, big data, risk, compliance, business intelligence, consumer-focused currency exchanges and peer-to-peer lenders. Ireland’s unique ecosystem has led to the development of a world class fintech industry with one hundred and fifty indigenous fintech companies.
Disruptive innovations such as artificial intelligence, blockchain, machine learning, cloud computing and the use of big data are transforming the way financial information is processed and collected. This affects the way we save and borrow, the channels we use to pay for goods and services, and how we engage in money transfers between wallets and accounts, domestically and across borders.
Digitisation has revolutionised banking as we know it today. Mobile payment revenue worldwide in 2015 was $450 billion and is expected to cross $1 trillion in 2019. Smartphones with intuitive apps have given customers the advantage of real-time transactions. Fintech allows consumers to make quicker transactions at a lower cost. According to Finextra, approximately 40% of the world’s population will have a smartphone by 2021, up from a third of the global population in 2017. Another benefit of fintech, with regards to blockchain, is the introduction of transparency. Fintech projects create auditable money trails which can help identify potentially fraudulent activity quicker and more easily than a human.
Payment apps integrated with bank accounts allow seamless mobile to mobile payments and transfers. Moreover, the benefits of fintech for students are endless. New banks offer customers the opportunity to budget, break down spending into categories and then group them into useful sections such as restaurants, groceries and transport.
In addition, financial inclusion has improved globally and fintech has brought a new paradigm to the design and implementation strategies for financial inclusion. According to the World Bank, there are 1.7 billion adults globally that live outside the financial system, yet two-thirds of them own a mobile phone that could help them access financial services.
Mobile banking will continue to drive financial inclusion as it enables consumers to skip the step of banking with a traditional institution and allows them to bank directly on their mobile devices.
The future looks to be bright for the fintech industry. Advances in artificial intelligence and data handling and analytics will drive even more innovation in the sector. The ultimate winner will be the consumer as financial and technology organisations embrace a broader view of banking.
Con Bartels
Conall Moran graduated from BESS last may. He now works at Accenture. During his time a Trinity he was highly involved in life on the business scene on campus and was Auditor as DUBES. Con Bartels caught up with him this week for a chat!
Get involved in society life. I ended up loving it with DUBES, but in a more general sense,
just get involved in some aspect of college life outside of the classroom. Whether it’s sports, societies or the SU it all just builds this experience which teaches you stuff you won’t learn in the classroom. Even when you head into the real world, it helps with stuff like public speaking, which has so much value outside the college. Making class presentations or
running in society elections gives you a huge boost you’ll realise when you get into the real world that you’re pretty good at it because of your experience public speaking in college.
Q: What steps did you take while still in college that helped you get the job you have now?
I looked at the people in the years above me who seemed to be on the right track and
asked myself what were they doing. Even the job I have now I applied for because I saw
people above me in college go through the same processes and end up working there. I
spoke to them to find out about these companies and their application processes.
The big thing I would recommend is getting to know older people in your college, the first
reason it’s fantastic is notes. It just makes your whole life easier. Especially for first years, it helps bridge the gap between all the help you get in school and then suddenly having none of that in college. You can learn so much from the older students because they’ve had a few years to make the mistakes you are trying to avoid. Again the best way to meet these
people is outside the classroom, through sports clubs and socs. Everyone wants to pass on
their advice to younger students because they may have not had that in your spot.
Q: What is the one regret you have from college?
I won’t say I wish I studied more or went to more lectures lets knock that one on the head. One thing I wish I did more was to ask lecturers for their straight-up advice and ask your lecturers more questions in general. Although I think other students are a great help, Lecturers really are there to help you and they want you to speak to them and ask them questions. I didn’t do it until my fourth year and I didn’t realise how helpful they were until I started talking to them. It helps you as well because you’re lecturers see you turning up and participating and having a first name basis really helps when it comes to assignments and exams. If there’s a problem then they are so much more likely to understand and help you.
Q. What has been your path since you graduated in May 2018?
So after I finished college I did the Washington Ireland program for the summer. From
June to August I was in New York. The program is in New York and D.C and it’s a mix of
political lobbying and business work, it’s unpaid but they provide accommodation for you. After that, I took some time off, which I would definitely recommend. Whether it’s
volunteering, travelling or staying at home just take some time to switch off. It’s good to get a different experience from uni and the work environment. I wouldn’t say college was the most intense or stressful period of my life but it’s a good feeling to go from all these deadlines and tests to nothing but the free time it’s very liberating. The tricky part is not getting too used to it.
So after the WIP programme, I took a month back home then two months travelling then
another couple months back home. A lot of people start work then take a break after a
while but for me, I wanted to wait to start work and then get straight into it because I had taken the time off and felt ready. It’s tough to start work and build up momentum if you plan to take a year out down the line soon. You can take that time off after college to really figure out what you want to do as well which is very important because a lot of people go into jobs straight away and find out too late that they don’t really like it or they are not the right fit. The nice thing about where I work now (Accenture) is they let me choose my start time if you’re able to have any say in it at all try and push back your start time just to have a period of now pressure from uni or work. Anyone I’ve spoken to who’s done the same has said they are so glad they took the time off. So I took an internship in the summer after the third year with Accenture and worked a lot with Electric Ireland. The application process for their internship was very easy I just sent my CV and a couple of months later I got an email to say that I had an interview. Because I had an internship I was able to get an insight into the interview process for the grad scheme and even though I still had to interview for the grad job I didn’t have to go through the same obstacles as many others did. I feel like grad schemes are a nice way to transition from college to real work, there’s a lot of young people and everyone is flexible and still finding their feet. You will meet a lot of people two or three years above you who can help you out just like in college really.
I still think it’s very tricky to value the validity of an internship because there’s so much
value in other stuff that you can do. I would definitely seriously consider doing an internship after 3rd or 4th year though. But go with your gut because for some people they will get more value and meaning from a summer abroad travelling than an internship. But the advantage from an internship is even if you come out of it thinking it was horrible you can still use the experience for next year and you can still put it down on your CV. You can also rule out that company or career for you. They can really be a lucky draw though.
Trinity Business Review 