Data Analysis and Decision Modelling

This document provides an analysis of Merlo Coffee in Australia, including its strengths, weaknesses, opportunities, and threats. It also offers recommendations for the company to differentiate itself, grow its business, and improve its reputation.

Running head: DATA ANALYSIS AND DECISION MODELLING 1
Data Analysis and Decision Modelling
Name
Institution

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Analysis
Merlo Coffee established its presence in Australia more than three decades ago. The main
business model is selling fresh roasted coffee and distributing coffee beans across restaurants and
cafes in Australia. The company’s philosophy has not changed over the years as they are known
for their quality coffee that they outsource from various places across the world. (About
Australia's Favourite Coffee Roasters, 2016). The company has a motivated team that is not only
friendly to customers but also knowledgeable and skilled in coffee production. Merlo Recipe can
be traced back to Italian tradition since the owner moved from Italy to set up shop in Australia.
The company’s process with respect to sourcing, roasting and blending is what gives it value.
Over the years, Merlo Coffee has managed to introduce other blends with distinct flavors.
The company is among the members of Australian Coffee Traders Association and
Australian Specialty Coffee Association. Today, Merlo Coffee is one of the leading brands in
Australia in the category of owned and operated coffee roasters. The company has a significant
market share as it delivers their product to more than 1500 cafes and restaurant across Australia.
In Queensland, the company has 15 stores that offer fresh roasted coffee daily (The Merlo
Roasting Process, 2016). The company has adopted new technology and it is using its online
platform to deliver coffee beans across the country and around the world. More so, the company
is known for its corporate social responsibility practices that enables it to have a good reputation
among its customers.
Findings
SWOT Analysis

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SWOT analysis refers to the strengths, weaknesses, opportunities and threats with respect
to a particular business. In this case, the SWOT analysis is centered on Merlo Coffee in Australia
(Business Queensland, 2016).
Strengths
One significant strength for Merlo Coffee is their unique process (Ward, 2018). The
company enjoys a unique formula that is balanced with rich flavor. The company believes that
coffee tastes better when it is fresh. As a result, the company roasts daily using the same process
and packs them before they are distributed. The company has relied on a single formula
borrowed from Italian tradition and makes the company an expert in the industry. Moreover, the
company has good relationship with their customers as they offer various perks such as free
coffee on shifts, training, discount and rewards (Work With Merlo, 2016).
Weaknesses
The company has a weak business model as a result of lack of uniqueness with the
quality of coffee. This implies that competitors can easily disrupt the market buy copying their
recipe and use efficient means to squeeze them out of the market. Also, the company lack an
elaborate marketing strategy because the organization has three departments which include
management, roasters and sales department. Merlo Coffee struggles with efforts of ensuring that
the company has an environmental awareness strategy that is focused on sustainability. Lastly,
the company lacks a differentiation strategy that is unique to their business model.
Opportunities
The company boasts of numerous award for being a market leader in the coffee business
industry in Australia. The company has been in existence for a long period of time thus creating

DATA ANALYSIS AND DECISION MODELLING 4
a sense of specialty in terms of roasting coffee. The company can increase its business potential
by relying on online platforms to market their products and attract more customers. The
company has a good potential to grow in other markets internationally to compete with other
multinational companies. The company’s culture and incentives offered to the staff gives the
company an opportunity to attract the best team.
Threats
Since the company supplies most of cafes and restaurant with coffee beans, it poses a
threat to their business because if these businesses decide to compete directly then the company
will lose revenue. There are many providers of fresh roasted coffee in the Australian market
which pose a direct competition for the company. The company should increase its safety
concern because they sell consumable products that may lead to health issues among their
customers. Merlo coffee faces a threat with respect to expanding the businesses to other parts of
the country and internationally.
Recommendations
Merlo Coffee should aim at differentiating itself from other players by offering unique
products that cannot be copied by other players in the industry (Boehe & Cruz, 2010). One way
the company has managed this is through value addition by offering their consumers with unique
flavors. Besides, the company needs to innovate new ideas to make their business sustainable for
the future. This will involve introducing complementary products in their business.
Merlo Company can grow its business by tapping to new marketing strategies that are
aimed at targeting specific users based on their taste and preferences. Marketing is an important
aspect in a business and the company has no data with respect to their marketing initiatives other

DATA ANALYSIS AND DECISION MODELLING 5
than sponsoring activities and donating to the society (Ryan, 2016). Therefore, the company
should introduce a marketing department which should conduct extensive research to understand
their customers and be able to deliver what their customers need.
The company should hire a public relation firms that will improve the reputation of the
company with respect to issues surrounding environmental awareness. Besides, the company
should consider improving their ethical responsibility by indicating their sourcing strategy in
order to improve the relationship with their suppliers. The company should put itself in a position
to know how their coffee are planted to when they serve their customers and ensure each and
every stage follows acceptable ethical practices.
Moreover, the company should strive to grow the business beyond Queensland to other
parts of the country and international markets. It is significant for the company to grow and gain
market share that will give it competitive advantage. There is huge opportunity in the coffee
market and with the required leadership and expertise, the company can expand and increase its
value for their shareholders. Safety measures should be the company’s priority (Kotsanopoulos
& Arvanitoyannis, 2017). Merlo Coffee should strive to hire and train experts in handling of the
coffee throughout their supply chain process to ensure that their coffee is not contaminated
which could pose threat to the community and bad reputation for the company thus losing on
revenue. Lastly, Merlo coffee should ensure that it conducts extensive research and development
initiatives to tap into the new market and consumer trends so as to modify the business model to
suit the needs of the market.

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References
About Australia's Favourite Coffee Roasters. (2016, July 26). Retrieved from
https://www.merlo.com.au/about/
Boehe, D. M., & Cruz, L. B. (2010). Corporate social responsibility, product differentiation
strategy and export performance. Journal of Business ethics, 91(2), 325-346.
Business Queensland. (2017, Jun 20). Examples of SWOT analysis. Retrieved from
https://www.business.qld.gov.au/starting-business/planning/market-customer-research/
swot-analysis/example
Kotsanopoulos, K. V., & Arvanitoyannis, I. S. (2017). The role of auditing, food safety, and food
quality standards in the food industry: A review. Comprehensive Reviews in Food
Science and Food Safety, 16(5), 760-775.
Ryan, D. (2016). Understanding digital marketing: marketing strategies for engaging the digital
generation. Kogan Page Publishers.
The Merlo Roasting Process. (2016, July 26). Retrieved from
https://www.merlo.com.au/roasting/the-merlo-roasting-process/
Ward, S. (2018, September 26). SWOT Analysis Example ( Strength, Weaknesses, Opportunities
and Threats. Retrieved from https://www.thebalancesmb.com/swot-example-strengths-
weaknesses-opportunities-threats-2947985
Work With Merlo. (2016, July 26). Retrieved from https://www.merlo.com.au/about/work-with-
us/