Business Study Report

This report provides an analysis of the business environment, production costs, macro business environment, and sustainability practices of Costa Group Holding Limited.

BUSINESS STUDY REPORT

Table of Contents
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
Introduction to business..............................................................................................................4
Production costs and scale..........................................................................................................5
Macro business environment ......................................................................................................7
Sustainability practice of the business........................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business study is very necessary because the business work in competitive world and it is
very necessary for the business to cope up with the changes taking place in the business
environment. Thus, it is very necessary for the companies to time- to- time evaluate the changes
taking place within the external environment. The present report is based on Costa group holding
limited. This is the Australia’s largest horticulture company and the major supplier in the food
retailing.
The present report will start by outlining an introduction to the environment and the
details relating to the company. Further the production cost and the scale of production will be
discussed in the report. Next the discussion will be made on the macro environment in which the
business is being situated. In the end the sustainability of the different practices used by the
business will be discussed.
MAIN BODY
Introduction to business
Business environment includes the different forces which are either internal or external to
the business but affects the working of the company to a great extent. The business environment
is the one in which the company exists and run its operations. There are many other different
companies which work in the same environment with same product or the substitute products.
Business and its products- the business chosen here is Costa group which was established
in the year 1888 and is headquartered in Australia (Myers and Palmarini, 2017). The company
deals in the retail sector as well as food and beverage sector. the company is mainly the grower
and distributor of the fresh vegetables and fruits to the other countries as well. The company
operates in many different countries including Australia, Morocco, Spain, China, Hong Kong
and many others.
The product and services of the company includes mainly growing and producing of a
wide range of fruits and vegetables like tomatoes, bananas, avocados, citrus fruits, mushrooms
and a variety of related food products (Kristofco and Brooks, 2017). The major consumers of the
company are like the business which deals in food making companies, direct consumers of
Australia and many others. most of the consumers are situated in local areas only and also in
other countries like China, Spain, Hong Kong and many other nearby areas.

Competitors- the major competitors of Costa group are Dongfang Modern, Mfc, IMG
Citrus, Total produce plc, Dole food company and many others. The competitors are also located
in the local area and also at the international level. From the research it was outlined that the
Costa group in its Mushroom market is having approximately 25 % of share as compared to the
other competitors like Bonduelle Fresh Europe, Greenyard, Monaghan mushrooms and others
(Mushroom market huge growth, 2018).
From all this information it can be said that the environment for Costa group is highly
competitive because there are many of the competitors dealing in the same business in large
number. Thus, it can be said that the market for Costa group is operating in perfect competition
market. This is a type of market wherein there are large number of sellers selling identical or
homogeneous products and services to a large number of buyers. Also, as the competition is very
high and intense there are more substitute products for the consumers to choose from. This is
majorly because of the fact that all the competitors produce homogeneous goods that is all the
goods and services are same (Prajogo, 2016). Thus, these can be substituted with the goods and
services of the other competitors.
The cost of these substitute decides the price of the company because if the substitute is
available at low cost then the consumer will prefer the substitute product. Thus, the demand of
the products of the Costa group will be elastic. This is majorly because of the reason that the
price of the substitute product affects the quantity of the goods and services of the company. This
implies that Costa group need to mark-up its price above its marginal cost. This is because
marginal cost is the cost of an additional unit produced and if cost is added then it is necessary
for the company to add in the price charged by the consumer.
Production costs and scale
The company deals in the manufacturing and producing the different type of fruits and
vegetable and other food products. Thus, this involves a cost of production and this is the
expense for the company. For production there are many different factors and resources are
required and all these factors are known as factors of production. The production process starts
with the procurement of raw materials, processing them through the different machines and
equipment. Thus, all these require some or the other cost being attached to this whole process
(Schaltegger, Lüdeke-Freund and Hansen, 2016). This cost levied in the whole process of
manufacturing is known as the production cost.

For the production there are many factors of production applied which are like land,
labour, machines, human resource, money and many other different factors. Also, the cost which
are levied in the production system are like variable cost and the fixed cost. The variable cost is
the one which is levied in accordance of the level of output being produced. In simple terms the
variable cost is the one which is varied with the production level that is if the production is high
then the variable cost is high and if production is low then it will also be low. The other cost is
the fixed cost that is whatever be the level of production the cost will be levied. Even if the
production is not taking place then also this cost will be incurred.
Thus, for Costa group some of the factors of production are fixed that is event the
company stop the production process then also these will be levied (Banica and Hagiu, 2015).
On the other hand, some of them are variable that is varies with the changes in the quantity of
production. For Costa group the fixed factor of production is the land and the machines. These
are fixed factor of production for the company because once the land is purchased it has to be
maintained even if the production is not done. This is because of the reason that even if the
production is not done then also the land will be used and also depreciation will also be charged
to the land. On the other side, the machines also once purchased are with the company only. If
the production ids nor done then also the minimum charges of the maintenance will be incurred.
Therefore, these are the fixed factors of production for Costa group.
Similarly, the variable factors of the production are the human resource and the money.
These are variable factors of production because of the fact that if the production quantity is
altered then these costs can be managed and but down (Buxel, Esenduran and Griffin, 2015). For
instance, Costa group increases the production of the company then the human resource and the
capital employed within the production process will increase these costs. This is because if
production quantity is increased then the money will also be required in excess and the human
capital will also be needed in accordance with the increased production unit. On the flip side, if
the production is cut down then also these factors of production can be brought to lower level.
This is because if the production is less than the human capital involved in the production can be
brought down and also the money will not be used if the production is decreased.
With this it can be concluded that the fixed cost for the Costa group is high as they have
to maintain the fixed factors of production even if the production is not performed (Audretsch,
Belitski and Desai, 2019). The overall cost structure of Costa group is very high as they have to

incur high fixed cost. This is majorly because of the reason that the company is of large size and
the production process is also large. It means that the company need to maintain the factors of
production and this increases the cost of the company.
Macro business environment
The macro business environment includes all the external forces which impact the
working of the company and their operations. It is very crucial for Costa group to analyse and
evaluate these changes in these factors as they impact the working of the company.
Currently the political system of Australia is stable because it has a federal system
wherein the power is distributed between the national government and the six states. The
political stability fosters the operations of the company because there are not many changes
within the government changes (Aithal, 2017). Thus, there are not many changes in the
government rules and policies and hence Costa coffee does not have to take much measures to
change the working.
Also, currently the inflation is high in Australia and this is not much good for the
company. This is because of the reason that in inflationary situation the price level is high and
the consumers not purchase much good and services. Thus, this decreases the sales of Costa
group. Also, when there is recession in economy then also the sales of the company decrease.
This is majorly because of the reason that in recession people do not have job, and they are not in
condition of purchasing good quality of products. During the time of recession, the demand of
inferior goods increases and the demand of the normal good decreases. This is because inferior
goods are of low price and when there is recession then the people are not able to afford the
normal goods.
In case of export also there are also many issues because there is difference in the
currency of different countries (Cao, Duan and Li, 2015). If at time of transaction the rate of
exchange is low and at time of exchange the rate is high then Costa coffee has to pay high price.
Also, in case if Costa group imports the different factors of production then also the rate of
exchange affects the price of the production. The currency rate fluctuates very frequently and
this impact the working of the company. This is because of the fact that if at time of transaction
the rate is different and if at time of execution of the contract the rate is changed then it will be
disadvantageous to the company. It is majorly because of the reason that at time of execution of
the contract the rate of exchange is high then the company has to pay high prices.

Sustainability practice of the business
The sustainability practices of the business made a more effectiveness for work to
maintain growth of company. Costa coffee have a higher and great production process for
produce and prepare their food products to sales out in market in order to attract more customers.
For analysis the negative and positive impact from business in order to sustainable business
practices are as follows:
Production process:
Production process of costa coffee is generated the negative impact on company and
group because in the production process they used various machinery and land for sets machine.
In that government and legal activities are highly affected to group (Pearson, Pitfield and Ryley,
2015). There are various laws and regulations which can highly affect to business and its growth
because in that company need to follow those laws. This can create the negative impact on
business process to manage work properly. Like: property law is affect to business because
company have to pay extra amount of tax on land as well as electricity for using machinery. In
this company pays more bill of electricity this creates the negative impact on the business and for
its growth factors. Property laws gives negative impact on the business. In that case costa group
need to complete formalities about the laws and taking updates about the laws and regulations in
effective manner. This creates the negative impact on the businesses to create positive impact.
On the other side, data protection is also gives negative impact on business and its
production process because costa coffee group is use online transactions for creating more group
work as well as taking online order and transactions. In that case mitigation for protecting from
hackers is to not update their software. This help to protect their transaction from hackers. In that
case company update their software when their software needs updates and create any mistake
for business and its production process (Liu, Wang and Wilkinson, 2016). After addressing those
mitigations company have more advantage which is reduced negative impact of hackers from
their business and not affected by any laws and regulations within the business.
Consumptions of goods produced by Costa coffee:
Coffee and any food items are the popular beverage and an important commodity. This
can create negative and positive impact of the business. The consumptions of goods and services
which are produced by company is give positive impact on costa coffee group because this help
to increase the profit margin of company. With the help of proper consumption of goods are

created a positive for company. This help to provide higher economic growth and boost
innovation and creativity for business in order to manage work properly. This also can use as a
positive impact by creating consumption. Costa group use this as an advantage because
customers are love those products and services which are produced by company. In that case
company can expand their business in other country and the same place (Edgington, 2018). This
help to give positive impact on customers and youngster because group is target to youngsters.
They are love to drink coffee and products of costa group. They love to visit at cafe of costa
coffee. With this company also can increase their price of products because their consumptions
of good is also high and customers are already attracted with this. This creates more benefits for
company and costa coffee group in effective manner. This creates higher effectiveness for work
to manage those works in appropriate manner.
Those given information has important for sustainable practices by using the business and
create long term business viability in right and effective manner.
CONCLUSION
From the above study it had been concluded that the study about their has helped to
develop effective and useful work in proper manner. The report had been introduced by the
general environment and layout of business by creating negative impacts. The report has also
included by the production costs and scale for company to manage their work effectively at
workplace. This had been created and reflects about the fixed and unlikely to vary much
according to the quality of goods and services which has sold by company. The report had been
also analysis the macro business environment and overall stability of the political system in the
country, inflation rate and experting impact of business. At the end of report has highlighted the
sustainability practices for business in order to reduce negative impact by using mitigations and
also shows the positive impact with consumption of goods and services. This positive impact had
been created as an advantage for company and also company used more effectively those
advantage for more sustainability of company.

REFERENCES
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entrepreneurship in Europe: A multilevel nested analysis. Entrepreneurship theory and
practice. 43(6). pp.1148-1165.
Banica, L. and Hagiu, A., 2015. Big data in business environment. Scientific Bulletin-Economic
Sciences. 14(1). pp.79-86.
Buxel, H., Esenduran, G. and Griffin, S., 2015. Strategic sustainability: Creating business value
with life cycle analysis. Business Horizons. 58(1). pp.109-122.
Cao, G., Duan, Y. and Li, G., 2015. Linking business analytics to decision making effectiveness:
A path model analysis. IEEE Transactions on Engineering Management. 62(3). pp.384-
395.
Edgington, D. W., 2018. Japanese business down under: Patterns of Japanese investment in
Australia. Routledge.
Kristofco, L. A. and Brooks, B. W., 2017. Global scanning of antihistamines in the environment:
Analysis of occurrence and hazards in aquatic systems. Science of the Total
Environment. 592. pp.477-487.
Liu, T., Wang, Y. and Wilkinson, S., 2016. Identifying critical factors affecting the effectiveness
and efficiency of tendering processes in Public–Private Partnerships (PPPs): A
comparative analysis of Australia and China. International Journal of Project
Management. 34(4). pp.701-716.
Myers, L. and Palmarini, N., 2017. Loneliness: findings from IBM’s Institute for business value
2017 study on loneliness in the aging population. Public Policy & Aging Report. 27(4).
pp.158-159.
Pearson, J., Pitfield, D. and Ryley, T., 2015. Intangible resources of competitive advantage:
Analysis of 49 Asian airlines across three business models. Journal of Air Transport
Management. 47. pp.179-189.

Prajogo, D. I., 2016. The strategic fit between innovation strategies and business environment in
delivering business performance. International Journal of Production Economics. 171.
pp.241-249.
Schaltegger, S., Lüdeke-Freund, F. and Hansen, E.G., 2016. Business models for sustainability:
A co-evolutionary analysis of sustainable entrepreneurship, innovation, and
transformation. Organization & Environment. 29(3). pp.264-289.
Online
Mushroom market huge growth. 2018. [Online]. Available through: <
https://www.openpr.com/news/1401403/mushroom-market-huge-growth-costa-group-
bonduelle-fresh-europe-drinkwaters-mushrooms.html >