Economics and Finance Assignment
Added on 2020-04-07
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New Zealand Diploma in BusinessEconomics and FinanceASSESSMENT 1Individual Assignment[Type the document title]0
Task 1Analysis of macro environment for economyPart 1The key growth indicators and development sources: - The project is under taken toopen a coffee shop at the location near to colleges and schools in New Zealand. Just bestcoffee will be unique in nature from all other competitive firms as it will serve differentflavours at its location to attract more crowds from schools and colleges. Lower cost witha variety of product will be an effective tool to attract youngsters to spend more time in acoffee shop. A wide range of products from espresso to latte blend will be served atcoffee shop at a very reasonable price (Barham and Weber, 2012). As the country isoffering more and more courses to attract international students, so it is expected a rapidincrease in more international students in coming 3 to 5 years which will be thepermanent customer base for the coffee shop due to its nearness to colleges and schools.The atmosphere of the coffee shop will be very entertaining and upscale, which willattract more customers and facilitate growth to the business. The interior design of thecoffee shop shall be focused to create more relaxed and entertaining atmosphere. Forserving the customers, a technical system with skilled and knowledgeable people will beused, which would cause an increase in the service efficiency. The coffee shop will beopen 8AM to 10PM, 365 days a year (Burbach, 2005).To improve their potential for future growth: To become a continuous growingbusiness, the company will come with a unique idea of “Creating your own coffee”. Inthis process, the customers will be allowed to make their own flavour of coffee. Thisunique concept will definitely attract more customers and make a unique position in thecoffee industry (Zealand, 2014).The customized product will be very effective in gainingknowledge of customers as the business will get to know that which type of flavours are1
more popular and is in demand among the customers. Expertise will also help thebusiness to grow further and make a loyal customer base.Part 2Effect of factors like Inflation, public finance management, fiscal policies, exchange rate,debt level management: - Food prices in New Zealand are increased by 2.3% year on year inAugust 2017, following a 3% rise in previous month. The prices of non-alcoholic beveragescould see an increasing trend from last few years (Wilkinson, 2015). The average inflation rateof food and beverage industry is 2.48% from 2000 to 2017. So, the prices of the products shouldbe set keeping in view the inflation trend.The country net foreign debt is one the highest in developed world at nearly 90% of GDP. Manycountries with this level of debt are experiencing severe fiscal and economic stress. The debtlevel of the country is not in a good position, so, there is always a high risk for operating anybusiness in the country (Stratton andWerner, 2013). Country does not have sufficient assets topay off its debts which are an unfavourable situation for any business to invest in the NewZealand.Exchange rate is defined as the rate at which the country’s currency is exchanged with the othercountry currency. Traders are betting that the New Zealand dollar will drop against US dollar.But New Zealand (NZ) dollar currency is still one of most traded product in the world.The public finance is controlled by management when they introduced fiscal policies andchanging the expenditure and structure of doing expenses by the people and the government alsocan manage the money and there will be more disposable income among people to spend on theirfood and related items and for their personal consumption which is a good indicator for just bestcoffee company.Part 3Critical key indicators that can affect the business: - The Company shall emphasis on strongdemand of customized high quality coffee. The owners will provide sufficient start-up capital.2
With aim of establishing loyal customer base and high quality coffee, the company willhopefully be seeing its net worth doubling in 2years.The expected gross margins would be 65%approx. which will allow business to operate smoothly and provide enough cash for its futuregrowth (Shang and Wang, 2013).The company can also target to open more branches near toother school and colleges and can target new markets like corporate office and other culturalevents to achieving high profits. These tools can be of great help to survive in the stiffcompetition market.Part 4Globalization and Technology: - In the modern era, technology plays a very important role ingrowth of any business. The use of technology in coffee making is the necessity now days aspeople are demanding more and more variety of products and they do not want to wait for longto get coffee served, so only modern technology can help in speeding up coffee making processwith high quality (Reinecke et al, 2012). The technology can be imported from other countrieswith the help of globalization. Globalization helps in removing barriers of bringing differentcountry cultures together. Since, NZ has many migrants from countries like India, China,Australia etc., so, the country can import technology of types of coffee likeable by the saidcrowd and serve them their favourite flavours according to the customer’s taste and preferences.So, with the help of globalization and technology, Just best coffee can directly link themselveswith the international students.Task 2Growth and performance: - The Just best coffee performance can be clearly reviewedby comparing its sales with previous month sales and compare it with other coffee housesof same level. Performance can also be measured in terms of no. of coffees sold in amonth, increase in customer base. The business will continuously grow if they will keepattracting new customers by providing high quality standard product with best servicesand variety in products. The only reason of underperformance of Just best coffee wouldbe poor or average quality of product served to customer or late serving of coffee, since3
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