BSBMGT616 Task 3
Task: 3
PEST analysis of Mackville
Political factor
 Tariff relived on Imported
goods by Government’s free
trade policy.
 Possibilities of introducing
Carbon tax.
 Political instability in a
foreign partner country.
Social factor
 Population growth
 Lifestyle trend is increasing.
 Growth in home consumer
market
SWOT analysis of Mackville
Strengths
 Good reputation after sales services
 Excellent advertising and marketing
mix.
 State of art Management information
system
Opportunities
 Use of internet for advertisement.
 Withdraw of competitors from new
Sydney market.
 Increase in population growth rate.
Economic factor
 Australian dollars go up in
next few years.
 Prediction of booming
economy as a result of
resource boom.
Technological factor
 New expresso machine has been
developed that uses less energy.
 Consumer market has been raised.
Weaknesses
 Poor performance of contracted
deliver company.
 Lack of experience personnel to deal
with import and custom.
 Lack of solutions from human
resources management
Threats
 Raising interest rates could decrease
disposable income.
 Raising AUS dollar might have long
term effect on tourism.
 Global competition in espresso
market.
 Bean ex and Nufix.inc is entering in
espresso market.
Potential competitors/Allies and their strengths and weaknesses

Competitors Strengths Weaknesses

Home expresso Covers consumer Only sell consumer
Trader market for home espresso
espresso machines to home
machines to make market in Sydney
a full range to Company’s
clients strategic partner is
not focused on
hospitality industry
Java Estate Australia wide Other coffee bean
partner supplier may not
Fully committed to recommend
hospitality and MacVille coffee
coffee bean machines with this
market strong alliances.
Ambrosia coffee Sharing of client Product image is
Roast base commodity based
Sell products not qualitative.
widely to
supermarket and
hospitality sectors.

Summary statement of each competitors/allies

Home expresso Trader:

Main vision of this company is “to sell customer home espresso machines to home
market, only in Sydney, and incorporating other digital home entertainment
products.” While MacVille was intending to spread over Australia in both large and
small hospitality industry along with endorsing social responsibility.

Home espresso Trader covers all the consumer market for espresso machines to
make full range to clients. This company also incorporates other digital home
entertainment products and shared space in four trade shows per year. Each shows
cost $2500 each and sells worth $20000 machines while its total profit of $10000
incur for a year and a breakeven after two shows.

During the year of 2007 Home espresso has successfully gained inclined sales ratio
till 2010 and in the year of 2011, sales seem increasing from $1.0m to $1.6m and
remainted stable till $1.8m in year 2011.
 

Ambrosia Coffee Roast:

Vision: “to sell all grades of coffee beans to supermarkets and hospitality outlets all
over Australia.” While MacVille is specialised in selling coffee machines all over
Australia. However products of company are different but the vision seems similar.
MacVille have risk of long-term commitment in signage and poor branding with
Ambrosia Coffee Roast.

Ambrosia coffee share in the cost of outdoor advertising for cafes and restaurants,
with shared branding of umbrellas and barriers. Company serves its services at 50
cafes at $200 per café for each partner. 50 machines sold at $500 which generates
breakeven after 20 cafes and profit of $15000 for a year.

Studying sales trend analysis, Ambrosia coffee Roast has most fluctuating sales
status, during the year of 2007, sales has reached to $3.2m and it has breakdown to
$2.9m in 2009 but gradually its sale inflation rises up to $3.3m in 2011.

Java Estate:

Vision is “to sell quality Arabica roasted coffee beans to all states of Australia.” Its
quite similar to the vision of MacVille while it is also focusing in its quality with
innovation and wants to spread all over Australia. Java Estate provides MacVille
machines at no charge to their clients. Java Estate pays MacVille cost price for
delivery and installation of machine, then pays remainder of the purchase price on a
12-month repayment program.
200 machines installed in the year, interest costs $40000 p.a when 80 machines are
sold it reach to break-even point. Company earn profit $100000. Sales trend analysis
shows Java estate has slightly progressive sales ratio elevating from $9.1m in the
year 2008 to$16.3m in the year 2011.

Meeting notes:

PEST and SWOT analysis were presented to the supervisor in the meeting and
following points were discussed:

- Supervisor said to focus on promotional activities on social network in coming

year by having more budget on marketing or public relation.
- Supervisor agreed on weaknesses and problems of MacVille and wants
MacVille to enhance delivery of products as this could strength the
competitive factors of company.
- General manager will present this problem to the executives so that
negotiation could be done with MacVille current delivery firm so that
improvement on delivery process may be improved in some ways.
- Supervisor also mentioned that next time before signing a contract with
delivery firms company need to review its profile carefully.
- Reporting of issues of lack of experienced personnel in import and customer
operation will be done to executives for immediate changes.
- Supervisor was much concerned with competitors which may attract existing
customers however, supervisor was very tranquil about the potential allies as
company have quiet effective strategic alliances.
Recommendation for strategic alliances:

Company can go for strategic alliances with Java Estate as it has similar vision of
providing its services all over Australia in reliable and cost-effective way. Even,
Supervisor also suggested that we could review our strategic alliance plan in order to
be able to partner with more coffee bean suppliers.