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BSBMGT616 Assessment Task 2

Value Chain Analysis

Primary activities

Inbound logistics - Commercial espresso machines are being

developed frequently
- However, as these machines are usually
developed outside of Australia, importation and
custom operations are needed
- It has been reported that MacVille has
experienced issue related to importation and
operations
- It then sometimes results in delayed delivery to
customers
Operations - MacVille operates in Australia which commercial
espresso machines
- Management Information System (MIS) is used
to form part of MacVille’s infrastructure
- The MIS has allowed strategic planning, along
with strong internal controls in accounting and
finance
Outbound logistics - MacVille relies on a three year contract with a
delivery firm to deliver its goods to customers
- Sometimes there is a delay which is causing some
issues with customers
- The contract delivery firm seems to be struggling
to deliver the promised quality with their fast
expansion
Marketing and Sales - MacVille has used marketing communications
and promotions mix, particularly with social
marketing in the past year
- Technology developments are helping MacVille
to reduce costs
- They expand the message via internet marketing
activities
Service - MacVille has gained repetition from its full service
- The installation, after-sales service, complaints
handling and training all get top marks from our
customers
- Some of MacVille’s procurement policy has
helped in this regard, with MacVille outsourcing
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work where it cannot meet customer demand

- The policy of putting the customer first and
guaranteeing service calls within 24 hours has
been a key reason for the increased sales

Support activities

Infrastructure - The Management Information System has

Human Resource Management
Technology Development
allowed strategic planning, along with strong
internal controls in accounting and finance
- MacVille’s well-designed and pleasing stores are
complemented with good customer service
provided by the dedicated team of employees
- The committed workforce is considered a key
attribute in the company’s success and growth
over the years
- MacVille is known for taking care of its workforce
- There are many training programs conducted for
employees in a setting of a work culture which
keeps its staff motivated and efficient
- Also, the management tends to listen to all
employees when it comes to brainstorming
process in order to make an improvement for
MacVille
- MacVille is known for use of technology, not only
providing advanced espresso machines, but to
connect to its customers

PEST Analysis
Political
- Carbon tax introduced on all energy intensive products used in a commercial
enterprise
- Taxes on imported goods will be removed in line with the Government’s free trade
policy
- Political instability in a foreign partner country
Economic
- High growth of home consumer market
- The prediction of higher-than-expected growth in the economy, as a result of a
resource boom
- The prediction of a strengthening Australian dollar against all our major
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- Trading partners over the next few years

Social

- The lifestyle trend towards eating out more frequently as the population ages and
becomes more affluent
- Population growth rate
Technology
- New commercial espresso machines are being developed that use 30% less energy to
run
- Rate of innovation

SWOT Analysis
Strengths
- The MIS has allowed for sound corporate/strategic planning, along with strong
internal controls in accounting and finance
- The marketing communications and promotions mix seems to be working well,
particularly with the social marketing
- The installation, after-sales service, complaints handling and training all get top marks
from our customers
Weaknesses
- The lack of experienced personnel in importation and customs operations
- The lack of solutions from Human Resources Management has negatively affected
delivery processes sometimes
- A three contract with a delivery firm, that MacVille has signed with, to deliver its
goods to customers. Sometimes there is a delay in getting the appropriate vehicle to
deliver the espresso coffee machines, which is causing some issues with customers
Opportunities
- Moving into the new Sydney market, where the bulk of espresso machines are sold
each year, and from which a major competitor has withdrawn
- Strategic alliances with coffee bean suppliers, where market penetration could easily
be achieved and costs of advertising and service could be shared
Threats
- The raising Australian dollar having a severe long-term impact on tourism, which was
a major category buyer of espresso machines
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- Raising interest rates that are predicted for the coming years could impact negatively
on the disposable income of coffee-drinking patrons
- The concerns of the group were centered on a global corporation Nufix Inc. shifting
from instant coffee into the espresso bean and machine market. The resources they
would have at their disposal in marketing, finance and human resources could be a
serious threat to MacVille’s plans.
- Other competitors, such as BeanEx which is a large coffee bean supplier that had
recently started importing espresso machines for their customers

Existing and Potential Competitors/Allies Review

Currently, there appear to be three existing and potential competitors/allies to MacVille.

These businesses include: Home Espresso Trades, Ambrosia Coffee Roast and Java Estate.
The following paragraphs will present brief description of each business.
1. Home Espresso Trades
Home Espresso Trades has been known for selling espresso machines to the home market.
However, the business seems to only service those consumers in Sydney only. Home
Espresso Trades also incorporate other digital home entertainment products. Joint venture
of this company is shared space in four trade which shows per year. The risks that the
company is facing include incomplete financial commitment with partner and association
with a non-industry partner.
Strength
- Covers the consumer market for espresso machines to make a full range offer to
clients

Weakness
- Only sell consumer home espresso machines to the home market in Sydney only
- The company’s strategic partner is not focused on the hospitality industry

2. Ambrosia Coffee Roast

Ambrosia Coffee Roast is a coffee bean seller business. It sells all grades of coffee bean to
supermarket and hospitality outlets around Australia. The company’s joint venture is shares
in the cost of outdoor advertising for cafes and restaurants. This could be seen in the form
of shared branding of umbrellas and barriers. The risks that the company is facing include
poor brand association and long-term commitment in signage.
Strengths
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- Supplier is committed to the coffee bean industry, with some sharing of the client
base
- Sell widely to supermarket and hospitality industry around Australia
Weakness
- Product image is not quality but more commodity-based

3. Java Estate

Java Estate is known as a coffee bean seller which sell quality Arabica roasted coffee beans
to all states of Australia. Java is MacVille’s potential ally as it provides MacVille espresso
machine to client for no charge. The company pays MacVille cost price for the delivery and
installation of the machine. The remainder of the purchase price is paid on a repayment
program which takes 12 months. The risk that Java Estate is facing includes the amount of
money outstanding.
Strengths
- Australia wide partner
- Fully committed to hospitality and coffee bean market
Weakness

- Other coffee bean suppliers may not recommend MacVille machines with this strong
strategic alliance

Summary Notes from the Meeting with Supervisor

Value Chain, PEST and SWOT analyses and summary of potential co-operative venture allies
were presented to the supervisor.
- The supervisor was impressed with the detailed information. The supervisor was
happy with MacVille’s management and marketing/sales strategies through social
network. The supervisor said that we could do more promotional activities on social
network next year by having more budget on marketing or public relations.
- The supervisor agreed on problems and weaknesses that MacVille is currently facing.
It was suggested by supervisor that he wants MacVille to have a faster delivery as this
could become our strength and be able to compete with others in the market more
effectively. However, the 3 year contract has stopped us from signing with other
delivery firm that could offer faster, more effective delivery.
- He will present this problem to the executives and will talk if we should negotiate
with MacVille’s current delivery firm. So that, an improvement on delivery process
may be improved in some ways while we are waiting for the contract to end. From
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this issue, the supervisor also mentioned that next time before we sign a contract we
should have reviewed any delivery firms more carefully.
- The supervisor was a concerned with lack of experienced personnel in importation
and customer operations. The supervisor will report this problem to the executives
for changes that may happen as soon as possible.
- The supervisor was highly concerned with competitors within the market that may
attract our existing customers. However, as the supervisor has checked review of
potential allies, he mentioned that we may have not to worry much. This is because
we have quite effective strategic alliance plan.
- However, the supervisor suggested that we could review our strategic effective
strategic alliance plan in order to be able to partner with more coffee bean suppliers.