Situational Analysis of Single Origin Roasters: PEST and SWOT Analysis

This report provides a situational analysis of Single Origin Roasters, including PEST and SWOT analysis. It explores the political, economic, social, and technological factors affecting the company, as well as its strengths, weaknesses, threats, and opportunities. The report also discusses marketing strategies for the company, including segmentation and positioning.

ADVANCE MARKETING

Contents
Introduction...........................................................................................................................................3
PEST analysis........................................................................................................................................3
SWOT analysis-....................................................................................................................................6
Marketing strategies-.............................................................................................................................8
Conclusion...........................................................................................................................................12
References...........................................................................................................................................13

Introduction
This report has a discussion on situational analysis of both internal and external analysis.
Certain framework are undertaken to analyse the organisation`s environment such as SWOT
analysis and PEST analysis of Single Origin Roasters, Sydney. A SWOT analysis is a visual
representation of business understanding of the environment in which it operates. This report
elaborate the issues related to supply chain. Single Origin Roasters is cornerstone of Sydney
speciality that provides coffee according to the taste of people living around. This coffee
house uses coffee that is roasted in-house (Broadsheet, 2018). The company sells its retail
packs form next door to espresso bar. The company started operating in 2003 in the Surry
Hills and it induces the few customers with a twirled taste by blending the fruit (SINGLE O,
2019). The company has a stellar and small array of undertaking that named as botany roast
works where the company roasts for passionate hospitality. Single` O has its origination with
the roasted beans such as Boris (Broadsheet, 2018). A business has to focus on changing the
threats into its opportunities and strengths by deriving solution.
PEST analysis
Political factors- Single Origin Roasters operations are vulnerable to several political risks of
Australia. The political trend includes Food safety regulations, NAFTA regulations, and trade
regulations. A coffee manufacturer looks for coffee producing countries so that they can
import their raw material. The way coffee houses are producing coffee that have become
more and more submitted to the high standards of the quality. Even a small coffee shop faces
pressure of trading in an ethical way. As there are huge number of people who ask for fair
trade coffee and it is a considerable way for coffee houses to different themselves with the
help of fair pricing. In order to ensure the quality in Australia, a coffee house has to go
through key certification schemes that includes rainforest Alliance and Australian certified

organic. The trend of coffee has changed after world war-II because the Australian
government controlled the import of coffee and the government brought new immigration
program. This resulted into launching of Italian-style coffee lounges.
Economic factors- Single Origin Roasters is exposed to several economical risks such as
volatility in the commodity prices, market prices, natural disasters, foreign exchange rate of
importing the raw material for coffee, and union unrest. With the estimated population of
24.281 million in 2016 and it is expected to increase toll 26.425 million until 2022. The GDP
of the Australia is around AUD 1677.47 billion in 2016 where the nominal GDP in 2016 was
AUD 1692.43 billion. The purchasing power of people based on per capita GDP is USD
1187.32. The industry statistics reports that the coffee industry generates a revenue of $10
billion with an annual growth of 2.2% and it employs 139091 employees (IBIS World, 2018).
(Source: SCUTT, 2016)
Social factors- Australia has a unique culture of coffee, which is highly influenced by large
Italian immigrant population. The country has experienced a boom in the number of local

cafes who are famous for roasting their own coffee. The cafes are Campos Coffee, Coffee
Alchemy, single origin, Allpress Espresso and Toby Estate. The demand of the coffee is
affected by change in preferences of the customers, transition from fast food to healthier
foods (Market research report, 2019). Moreover, the population of the country is the diverse
collection living in younger society. Increase in education in today`s era among Australians is
more than before. The café culture has been continuously penetrating the Australian homes in
2017 with maximum customers who prefer high quality coffee products. Single origin look
forward to replicate the café experience at their homes with fresh ground coffee pods and
coffee beans that continues strong growth (Market research report, 2019).
(Source: Inside small business, 2015)
Technological factors- Technological advancement focuses on “going green.” It has been
analysed that in Australia, Single origin roasters, Allpress Espresso, and Campos coffee are
the top-quality roasters that does not mean that their coffee is best but they marketing

strategies are strong enough to induce the customers. The Single Origin Roasters can put their
coffee at the great cafes with best machinery. Better brewing technological advancements can
make the coffee production more effective that allows the coffee manufacturers to experience
greater profits. Enhancement in coffee machines is compulsory, as its coffee manufacturing is
not limited to MNCs (Market research report, 2019).
SWOT analysis-
Strength
 Single Origin Roasters is well known for using coffee beans “Geisha” which is among
the prized coffee in the world. The notion of this coffee house is to serve freshly
brewed and fine quality, which is conveniently availed to western public. The strength
of emerging local coffee shops forced the Starbucks to close down 61 stores in total
84 stores. As Starbucks has nothing new to offer to the Australian public (Training
News, 2017).
 Single Origin Roasters has the advantage of professionally trained baristas where
Sydney`s culture is so advance that ordering a coffee can be an enthusiastic
experience. This coffee house runs its business independently rather than following a
chain (Training News, 2017).
 The company is able enough to provide services to the target demographic, which is
an immense advantage. Single Origin Roasters is located in Sydney where large
number of Australians do their jobs that increases the demand of coffee (SINGLE O,
2019).
 On a personal note, the employees of Single Origin Roasters are satisfied because of
friendly environment and high wages pay. Apart from this, the organisation aligns
with the values of target market. The company has carefully selected its staff and
business environment that care about quality and proactive lifestyles of the customers.

The company undertakes to take care of staff by offering them training, rewards,
higher wages, and compensation (Mai, 2016).
Weaknesses
 The pricing of coffee beans is quite vulnerable according to economic trends and the
cost of suppliers. The price of coffee beans is quite volatile because of external
influences that further can beat the budget of customers (Training News, 2017).
 The company has to maintain the quality of coffee beans and ambience where the
coffee equipment make noises. It is necessary for the company to establish that
equipment that makes minimal noise (Melanie, 2017).
 The supply chain of the company is weak and uncertain due to significant changes in
the temperature, which means coffee yielding may differ from year to year. Poor
growing conditions are likely to affect the performance of the suppliers (Melanie,
2017). Although organisation might book their orders in advance with wholesalers
and growers which are likely to be remain balanced from the multiple competing
challenges created due to shortage of inventory (SINGLE O, 2019).
 Coffee beans are manufactured and farmed in humid climate conditions especially in
developing countries. The ordering cost of coffee beans is quite volatile in the entire
supply chain. One of the important challenge is the impact of climate changes. These
changes outbreak the coffee rust and fungus has the power to wide out 70% of coffee
bean production in entire South America (Melanie, 2017).
Threats
 Growing number of special cafes and other coffee shops has contributed to severe
competition. Absurd taste due to climate changes can lead to decrease in the demand
of coffee that affect the sales of the organisation (Training News, 2017).

 In 2000, Starbucks entered the Australian market that is a bid threat to the existence of
Single Origin Roasters. Single Origin Roasters faces high competition from most
coffee roasters of the local market.
Opportunities
 An increasing trend towards premium food has reflected the change in the products
that has been offered. Single Origin Roasters is considered as an environmentally
aware organisation, which produces convenient coffee for the individuals to
encourage them to live a proactive lifestyle. Greater demand for coffee and its
affordable nature of most of its raw materials and technology will support (Training
News, 2017).
 Among all existing local coffee manufacturer, it is reported that Single Origin
Roasters have effective promotional strategies. Coffee house has the opportunity to
expand it at global level or internationally by incorporating the culture of that
particular country in its products. The company can incorporate the culture of that
particular country in its marketing strategy according to their lifestyles (Lauren,
2016).
 Cafes culture affects the sales positively. As Aussies love their coffee so much. As
95% of the coffee shops are independently are owned by professionally trained
baristas that are perfectly made. Environmental consciousness acts as a push to have a
more sustainable coffee (Lauren, 2016).
Marketing strategies-
Segmentation-

Market segmentation is a process of dividing the market into small and distinct groups with
differentiated buyers, needs, characteristics, behaviour, and needs, which needs marketing
programs.
Segmentation Criteria Targeting of customers
Geographic Region
Density
Australia
Urban population
Demographic Age
Gender
16-40
Both male and female
Life-cycle
stage
Bachelor youngsters, people sitting in
office, newly committed young couples
Occupation Professionals, employees and students
Behavioural Degree of
loyalty
“Hard core loyal”
Benefit sought Reviving the quality of coffee, chatting
with friends and relatives
A quality place to work
Personality Ambitious, easy-going and determined
User status Regular users
Psychographic Social class Middle and high level income
Lifestyle Aspirer
Explorer
Reformer
Mainstream

In order to target the chosen segment that lie between 17-40 years with middle and high level
income, the company has to prioritise its ambience, as target audience wants ambience and
services as their priorities because working professionals generally carry their laptops with
them to discuss and conduct a meeting in the cafes.
In the era of cutthroat competition where only commercial advertisements are not sufficient
t5o build a brand image among the customers. Coffee house has to use combined strategies to
stand out from the saturated market. To position a brand value, coffee house has to satisfy its
customers with maximum possibilities (Training News, 2017).
(Source: Loop loyalty, 2018)
Small and local coffee shops has to establish strong image in the eyes of the customers and its
communities that attract large volume of high level of loyalty. Marketing a coffee house is a
need of more subtle as compared to other business. Coffee houses provides a social
experience that greatly rely on word of mouth advertising and recommendation from the
existing people visiting it. Most importantly, marketing strategies starts with the development
of products and services. They can be benefited from a good ambience and customer friendly

services, as word of mouth is an effective method to turn the large groups into loyal
customers. The company should offer free-Wi-Fi in its shop (Coffee roaster, 2017). For
instance- the company can install electrical outlets on the each table so that they can bring
their laptops. The coffee house can also maintain live bookshelves for entertainment such as
host poetry reading and other events with a feel of community. If the consumers have, more
than one coffee option in Sydney so the coffee shop has to make sure that single`O coffee
shops offers such services that is not offered by other coffee shops (Coffee roaster, 2017).
Loyalty and incentive program- loyalty program is a must concern that has to be undertaken
by coffee shops to win the customer`s trust and their values such as punch cards with a
promise to receive every Nth coffee cup free that can ultimately attract the coffee drinkers.
Coffee shop should undertake the incentive program to beat the next level of competition.
The organisation must engage a couple of sales promotional coupons and advertisements are
from time to time that can give a boost the new visits. The organisation can place its coupons
in newspaper but most importantly, it should not decrease the price severely that May only
lead to spoiling of brand image. If possible, reveal the menu outside the café and set a
sidewalk in the outside seating area. The organisation can also conduct a fun activity once in
a week or go to live entertainment and literary events and the group meetings and finally
submit the information to the community calendars in the area. Digitalisation has made things
easier as these cafes create instagram and Facebook pages, which has the system of tagging
the people and the places too. This attract many youngsters and other internet users as coffee
shops started using social media platforms very frequently. Coffee shops use websites and
Google ads to attract people. Always try to eliminate printing barriers that will incorporate
the use of barcodes and coupon code, which the workers can scan from the mobile of the
customers (Single`O, 2018).
Positioning-

In order to position the café in the minds of the customers, it is most important to make the
place attractive and visible. There are many local cafes, which are dark, dirty, gloomy, and
hidden from the public. In such cases, it is not at all clear what the café wants to offer and
what advantage will it give to its customers. Single`O can try to not locate its other expanded
cafes in the crossroads and middle of roads, as some of them can be just a stag of noise and
pollution rather than peace and serenity. Café must offer free testing samples to gain a brand
value among the customers and attract new customers. A better behaviour, a great, and a fast
servicing of food can assist the organisation to create a brand value. The visual display plays
an important role in attracting the attention while walking and driving even when they are
looking for something else nearby. The common attribute of good coffee house is they look
very familiar, attracts the people with easy-going style that can want to either stay or drink
more (coffee Loop loyalty, 2018).
Conclusion
From the above analysis, it can be seen that the report is about the single O that is a local
coffee in house café located in Sydney. The report evaluates the external forces of the market
through PESTLE framework and SWOT analysis. Positioning the coffee house is not easy;
one has to figure out number of marketing opportunities. Australia promotes new business
ventures as it is ranked at 18th position that support the new business. The report has a strong
marketing plan for the organisation; the marketing plan firstly has identified the potential
customers, and then applied various marketing strategies to position the brand as a valuable
brand among the customers.

References
Broadsheet, (2018) Single O Cafe and Sideshow. Available on:
https://www.broadsheet.com.au/sydney/cafes/single-origin-roasters-cafe-and-sideshow
[Accessed on: 24/03/19]
Single`O, (2018). Cup of Excellence. Available on: https://singleo.com.au/cup-of-excellence/
[Accessed on: 24/03/19]
IBIS World, (2018) Cafes, and Coffee Shops - Australia Market Research Report. Available
on: https://www.ibisworld.com.au/industry-trends/market-research-reports/accommodation-
food-services/cafes-coffee-shops.html [Accessed on: 24/03/19]
Mai, K., (2016) All coffee, all day at the OG Single Origin. Available on:
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24/03/19]
SINGLE O, (2019) About US. Available on: https://singleo.com.au/about/ [Accessed on:
24/03/19]
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https://www.businessinsider.com.au/australia-q2-gdp-2016-9 [Accessed on: 24/03/19]
Inside small business (2015) Coffee consumption in Australia – which, where when and how
much?. Available on: https://insidesmallbusiness.com.au/latest-news/coffee-a-national-
obsession-which-where-when-and-how-much [Accessed on: 24/03/19]
Market research report, (2019) Australia PESTLE Analysis & Macroeconomic Trends
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[Accessed on: 24/03/19]

Coffee roaster, (2017) How to Start Your Own Coffee Roaster Business. Available on:
https://toughnickel.com/starting-business/How-to-start-your-own-coffee-roaster-business
[Accessed on: 24/03/19]
Melanie, (2017) Supply Chain Obstacles of Coffee. Available on:
https://www.unleashedsoftware.com/blog/supply-chain-obstacles-coffee [Accessed on:
24/03/19]
Loop loyalty, (2018) Creative coffee shop marketing strategies that cost less than $50 a
month. Available on: https://blog.loopyloyalty.com/creative-coffee-shop-marketing-
strategies-that-cost-less-than-50-a-month-6e54119cd519 [Accessed on: 24/03/19]
Lauren, (2016) A newcomer`s guide to coffee in Australia Available on:
https://www.sydneymovingguide.com/coffee-in-australia/ [Accessed on: 24/03/19]
Training News, (2017) Australian coffee culture, a brief history. Available on:
http://www.tcptraining.com/training-news/australian-coffee-culture-a-brief-history [Accessed
on: 24/03/19]