Task 2

1. Cost and benefits: An analysis of costs and benefits for the organisation, based on the
information provided.

Being a significant chain of chocolate stores in Melbourne, it is imperative for Cocoa Delights
to analyse both risk and benefit before undertaking any activity. It is the vision of Chair of the
Board of Cocoa Delights, it is the vision of the firm to strengthen their presence in every
Australian capital city by 2020. They are aiming to open more than 100 stores in the entire
country. In order to fulfil this vision, the company aims to launch expansion program and
collaborate with Haigh’s Chocolates.

Collaboration with Haigh’s Chocolates will act as a greater opportunity for Cocoa Delights to
align more number of customer. Extensive advertisement and considerable price of products
are the greatest strength. This is also expected that collaboration with Haigh’s Chocolates
can serve Cocoa Delights with the ability to open more than 100 stores within 5 to 7 years.

At the same time collaboration with Haigh’s Chocolates will also help Cocoa Delights to access
low cost media in order to advertisement their products and thereby create brand awareness
among the customers. As Haigh’s Chocolates is running business for several years. Therefore,
the company have in-depth knowledge regarding the market of three different capital cities.
This can help Cocoa Delights to access those market by exploring the buying patter along with
the fundamental requirements of customers.

Franchising is the greatest source of capital, this will help Cocoa Delights to mitigate the issue
of lack of ample store manager in a timely and cost effective manner. At the same time, with
the assistance of strong financial base, Cocoa Delights can also be able to satisfy the financial
requirements. Financial stability can help Cocoa Delights to provide reward to the store
managers based on their performance.

2. PEST: A completed PEST analysis.

Political

Recently, Australian government is taking intense care towards waste management.

Therefore, it is the prime responsibility of the management of Cocoa Delights to handle their
wastage materials in an effective manner. At the same time, government has also introduced
 National Energy Retail Law, related to energy usage. According to this regulation, it is
imperative to lower the rate of using energy as it is really harmful for the environment.

Economic

The economic factor play a significant role in running a business properly in the external
business environment. It has been observed in the IBIS report that the rate of interest is
increasing in a sustainable manner. This is the reason, for which the disposable income is also
decreasing drastically. The inflation rate in Australia has also been increased by 2%. The rate
of unemployment is also increasing in a drastic manner. This can hamper the productivity of
the companies like Cocoa Delights due to shortage of manpower.

Social

Social factors are also highly significant in order to assess the ongoing trend among the
customers. In the context of Australia, the social trend of eating chocolate is increasing
promptly. This is acting as a greatest opportunity for Cocoa Delights to increase their rate of
sales.

However, the customers are also becoming extremely health conscious in recent times.
Therefore, it is imperative for Cocoa Delights to promote the probable health benefits of
eating dark chocolate in the community. This is the way, through which awareness can be
raised among the people.

Technological

Prompt technological development is acting as a driving force for the corporate entities to
initiate speed in their internal business process. However, The broadband roll out is
decreasing drastically. Still, prompt technological development has also resulted in amplifying
the option of internal retailing.

3. Risk: A completed risk analysis, including approaches available to manage the identified risk
(risk management strategy).

As Cocoa Delights is aiming to expand their business in the capital cities of Australia, it is
imperative for them to carry out an in-depth risk analysis, which can serve them with the
 capability to develop and implement proactive strategies that are highly required for
overcoming the challenges.

One of the major aspect of risk assessment is that, it can help Cocoa Delights to accomplish
their fundamental mission and vision in a timely and cost effective manner. Company is very
much need in terms of satisfying the requirements of the staffs. With the assistance of ample
monetary resources, Cocoa Delights can offer the store managers with the rewards, which is
the key of generating a sense of responsibility among them. the intensity of risk related to
lack of equivalent financial reward us quite high for Cocoa Delights as it can affect their
productivity by generating reluctant attitude among the staffs. This can also affect the ability
of the company to run the new stores appropriately for not having ample store manager.

Executing joint venture with that of Haigh’s chocolate can lead Cocoa Delights to encounter
certain risk. The rules of running business by companies are different from each other. This
can affect the consistency of Cocoa Delights.
Moreover, Haigh’s chocolate does not follow any strong advertising strategy order to promote
their store. The risk of not having effective advertisement strategy is also high which can also
have a negative impact on Cocoa Delights. Collaboration with Haigh’s chocolate can also
create certain barrier for Cocoa Delights to undertake their promotional activities, which is
truly a threat towards amplifying their public image.

4. Fit: A description of the likely fit of the opportunity with organisation goals and capabilities.

The strategic management comprises of the most significant decision of the organization so that
the sustainable competitive advantage is facilitated. If the Cocoa delight would collaborate with
the Haigh the franchising would generate the better business opportunities for cocoa. The
separate legal agreement would be devised.

5. Impact: A description of the likely impact of the opportunity on current business activities and

customer base.

In order to promote growth of their business, Cocoa Delights is aiming to initiate joint venture
with Haigh’s chocolate, which can have a firm impact on strengthening the financial condition.
The trend of eating chocolate is high in Australia, which is acting as a great opportunity for Cocoa
Delights to increase their statistics of sales. The profit margin of the company us 45%. It is true
that joint venture with Haigh’s chocolate can pose certain legal issues for Cocoa Delight.

The different segment of the market can be targeted if the joint venture would be established.
The same industry would be hunted and the new assets would be developed and agreement may
generate the more customers and goodwill in the market.