Risk Review for MacVille's Expansion Plans

This document provides a risk review for MacVille's expansion plans, including goals, stakeholder feedback, PEST analysis, SWOT analysis, and research information. It also includes a draft of communication for consultation with stakeholders.

Assessment Task 1: Risk review
1. Introduction To Macville:
MacVille Proprietary Limited is a beverage chain based in Queensland, Australia which
embarked on a strategy to expand its business into other states of Australia. The café in order
to expand its market uses the strategies of acquisition and merger by taking over smaller
cafes located in either developed or emerging local markets. MacVille being a proprietary
limited company has a well structure organisational leadership structure with the present
CEO, Paula Kinski as its head. The organisational structure of the company also consisted of
board of directors which took decisions in crucial matters like taking over new subsidiaries to
expand business. The restaurant chain had a very strong risk management strategy in place
which was divided into three steps namely, review, analysis and risk management planning
and monitoring of the risk management plans. The company was financially very strong
which was evident from its strong market position and well layered organisational structure.
The company expanded its policies like the risk management policies to the newly acquired
subsidiaries as well. The company had a very strong occupational health and safety policies
which ensured that the employees of the company suffered minimum injuries. The company
due to its strong employee centric organisational culture and reduced operational disruptions
due to reduced accidents, was able to provide high level services to the customers which
resulted in satisfaction to the latter. The management of the company extended its risk and
OHS policies to subsidiaries as well. This was evident from of the fact the company sent the
assistant manager of Brisbane Queen Store to carry out a research on the current operations
of the Hurley’s café in Toowoomba. The assistant manager gained information about the
operations in place at the Hurley’s café and its present risk management policies.

2. MacVille’s Expansion Plans:
MacVille applied the strategy of acquisition and merger to expand its business to new
markets with Australia. The company was eyeing to take over Hurley’s Café in Toowoomba
also in Australia to take the advantage of the growing restaurant market in the town. The
management of MacVille followed a stringent risk management policy both for its own stores
and future subsidiaries. The management assign the assistant manager of the Brisbane Queen
store to carry out a risk management analysis of the Toowoomba store.
3. Goals for Expansion Plans
a. To appropriately manage the risks involved with the operation of the Toowoomba store.
The aim of the risk management plan was to carry out a strict risk analysis of the
Toowoomba store to recognise the operational risks. The assistant manager of the
Toowoomba store was assigned with the responsibility of analysing the actual operations
which were in place in the Hurley’s café and pointing out those methods which could attract
risks to the company post acquisition of the café.
b. To give the new manager significant insights into the store’s operations:
The management of the store assigned the assistant manager of the Brisbane Queen
store the responsibility of visiting the Hurley’s café. The manager was supposed to meet the
present in-charge of the café to get insights into the present operations of the store. The
assistant manager was than supposed to communicate the findings to the CEO and the
manager. The CEO and management board of the café was then supposed to take decisions
regarding the measures which have to be taken to improve the risk management operations in
place in the Hurley’s Café in Toowoomba.

c. To ensure there is a smooth transition to the MacVille systems.
The management body of MacVille Pty Limited under the leadership of Paula Kinski,
CEO aimed to undertake an analysis of the actual risk management policies in place at the
Hurley in order to ensure that the business does not face any issues pertaining to risk
management post acquisition of the Hurley’s.
d. To encourage the new manager to give ongoing support for risk management.
The management of MacVille Pty Limited wanted to gain participation and support of
the newly promoted assistant manager in risk management. This is why the firm assigned the
new assist manager of visiting the manager to conduct risk analysis of the store at
Toowoomba which MacVille was aiming to acquire.
4. Stakeholder Feedback Table
Stakeholder Internal/external Role in process Issue/concerns
The board Internal Responsible for
the overall risk
management.
Potential asset loss
both tangible and
intangible.
Paula Kinski Internal Chief Executive
Officer.
Potential loss of
reputation and
promotion
prospects.
Queensland
management team
Internal Management team
to assist in the
transition and
Potential loss of
reputation and
promotion

ongoing
management.
prospects.
Ron Langford External Councillor and
landlord.
Potential loss of a
tenant.
James Mansfield Internal Hurley’s store
supervisor.
Potential loss of
promotion.
Hurley’s staff Internal Employees. Potential loss of
employment.
Goldsmith
Partners
External Legal and
compliance
advice.
Potential loss of a
client & potential
for being sued for
advice given.
4. PEST Analysis.
i. Political –
The Government of Australia is a stable government both the central and state level.
The government bodies make laws and policies for the business organisations to comply with
as well as incorporate in their strategies. For example, as mentioned by Ron in the case study,
the Government of Australia was launching a new law which mandated the industries to
reduce amount of waste water which means that companies were required to take measures to
ensure water spillage. Similarly, the Government also passed a law to strengthen the

broadband network. This would allow the businesses in the industrial areas like Brisbane
acquire internet connections at lower rates.
ii. Economic
The economic conditions which impacted the business operations of firms like
MacVille as well its subsidiaries were gross domestic products rate. For example, the GDP of
Australia was USD 1.32 lakh crores as in 2017. This meant that companies in the country
were experiencing higher productivity which could be considered as signs of growing
demand for products in the market. The second economic impact which impacted the
business of organisations like MacVille is per capita income. The per capita income of
Australia was 53799.94 USD as in 2017. This means that the people in Australia were
experiencing high levels of disposable income which means that they would be able to afford
to spend more amount of money in premium restaurants like MacVille which would boost the
revenue generation of the restaurant. Thus, it is evident that the economic conditions have
significant impacts on the operations of chains like MacVille.
iii. Social –
The social factors have strong impacts on the business organisations and their
business generations. For example, the rising number of retirees meant that the restaurants
like Hurley’s café would get access to higher consumer base. Secondly, it can be pointed out
that the rising per capita in the society meant that the people have more disposable income to
visit cafes. This means that income of the residents has direct impact on the revenue
generation of the restaurant.
iv. Technology –

Technology has several important impacts on the business operations of business
organisations. Access to high level of technology enable the restaurants and cafes
introduce and develop more improved products. For example, the trained chef in the
Hurley’s café introduced a variety of gourmet and healthy rice wraps. Similarly, the café
introduced a range of frosted which once again involved use of technology. Thus, it is
evident that technology has strong impact on the operations of the business organisations
like MacVille and its future subsidiary called Hurley’s Café.
5. SWOT analysis
i. Strengths –
1. Situated in strategically important location.
2. The café was able to prepare innovative food items like gourmet rice wraps.
ii. Weaknesses –
1. The café did not have proper management policies pertaining to financial management and
human resource management.
2. The Hurley’s cafe did not market its products.
3. The café did not follow any data management policy and employees could freely accede to
sensitive data.
4. Did not have proper risk management policies in place.
iii. Opportunities –
1. The firm could adopt the risk management policies of MacVille Pty Limited.
2. The firm should market its products.
3. The firm should restructure its operations to ensure higher level of sustainability.

4. The firm should should adopt a stronger financial, data and human resource management
policies.
iv. Threats –
1. Changes in laws to reduce wastage of resources of water.
2. Rising competition in the area from emerging restaurant chains.
6. Research information needed for expansion:
a. Explain Site visit with James Mansfield
Fit-out:
The Hurley’s Café was located on a strategic position which could be accessed in
cars. However, the way was extremely congested.
Cash handling:
The café management followed a very slack cash management strategy. The café
owners withdraw cash from the capital of the café and did not maintain proper records. The
staff did not deposit cash into the bank and there have been incidences of thefts.
Promotions:
The staff did not indulge in the promotion of the products of the café.
Employment:
The management of the Hurley’s café did not maintain proper records of the
employment of the employees. There was no written employment contract between the
cage’s management and the employees. The employees were not given any formal training.
However, the owner of the café did provide mentoring to the employees.
Water usage:

The staff of the café did not follow sustainable measures in using water and wasted
immense quantities of water.
b. Details of Interview with Ron Langford
By-laws:
The Government of Australia rolled out laws which mandate the companies to reduce
their water wastage.
Government legislation, economic:
The Federal Government made laws to make broadband connection accessible to
people. The laws would make it companies like Hurley’s café to use internet for their
business use. They could in fact enable consumers use laptops within their premises which
would maximise their satisfaction.
Expansion options:
The cafés could expand their footpath dining. This meant the restaurants like Hurley’s
café could expand their sitting arrangements to footpaths to entertain more customers to
generate higher revenue.
Competition:
Ron mentioned to the assistant manager that more restaurant were opening in the area.
This meant that the competition level in the town of Toowoomba to Hurley’s café would
stiffen.
Technology plans:
The restaurant could boost their internet accessibility by using the broadband
programme which the government of Australia was set to launch.

c. Extract from Toowoomba regional council –
Tourist numbers:
The number of tourist numbers are increasing.
Unemployment:
The rate of unemployment in Toowoomba was falling owing to opening of new
restaurants in the town.
Population growth:
The population of the town was increasing.
Regional growth:
The town was experiencing increase in growth owing to emergence of new
businesses.
d. Extract from MacVille NSW
Problems with acquiring and re-branding existing stores:
The MacVille was acquiring new cafes to expand its business and re-branding them
after its own brand name. However, the lower standard of operations and risk management in
these smaller cafés would likely result in increase of risk for the company post acquisition.
.

7. Draft of communication for consultation with stakeholders
Stakeholder Internal/external Role in process Issue/concerns
The board Internal Responsible for
the overall risk
management.
Potential asset loss
both tangible and
intangible.
Paula Kinski Internal Chief Executive
Officer.
Potential loss of
reputation and
promotion
prospects.
Queensland
management team
Internal Management
team to assist in
the transition and
ongoing
management.
Potential loss of
reputation and
promotion
prospects.
Ron Langford External Councillor and
landlord.
Potential loss of a
tenant.
James Mansfield Internal Hurley’s store
supervisor.
Potential loss of
promotion.
Hurley’s staff Internal Employees. Potential loss of
employment.
Goldsmith
Partners
External Legal and
compliance
advice.
Potential loss of a
client & potential
for being sued for
advice given.

a. Human resources management risk.
i. No written policy and procedures manual and limited staff training – could
lead to errors and inappropriate actions.
ii. Authorisation system not clearly defined – could lead to fraud.
iii. Lack of sales promotion techniques – impacts of the stores financial
viability.
b. Financial operations risk.
i. No separation of duties – could lead to fraud.
ii. The banking was not done every day and was kept on the premises
overnight without a safe – assets not protected could lead to thief.
iii. Not all takings from the cash register by family staff members were
recorded – unacceptable behaviour in a company store and could lead to
misappropriation of funds.
c. OHS risk.
i. Manager two hour drive to and from weekly manager’s meeting – could
lead to physical injury.
ii. Unstable and broken chairs – customers injured – compliance breach and
customer suing, reputation loss.
iii. Carpet that was worn through was simply taped over with gaffer tape -
compliance breach and customer suing, reputation loss.

No established process for dealing with injuries happening at work – staff need a quick and
organised response to injuries – staff work loss, unions suing, reputation loss.
d. Supply chain risk.
i. Impractical to deliver fresh pastry from the company’s central bakery plant
in timely manner – brand loss, quality service loss.
ii. Supply of company branded supplies – brand loss.
e. Local governance and compliance risk over.
i. Water use – company could be fined – reputation/brand loss.
ii. Incomplete employment records – unions could sue – government
penalties – reputation/brand loss, $50,000 fine.
iii. Confidentially of records not guaranteed – privacy law breach.