Market Analysis in Australia

This study describes the market analysis for a coffee shop in Australia, focusing on political, legal, and economic factors. It discusses the registration, licensing, and permits required, as well as the impact of government policies and taxation. The analysis also considers the supply and demand for coffee in Australia and the opportunities for a new coffee shop.

Running head: MARKET ANALYSIS IN AUSTRALIA
MARKET ANALYSIS IN AUSTRALIA
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Coffee- A world-wide beverage, the consumption of coffee is more than 400 billion cups
each year. The following study describes the market analysis for coffee shop in local vicinity
of Australia. The study predominantly focuses on the political, legal and economic factors
influencing the launching of coffee shop in Australia. The political factors highlight the
registration of business, licencing and permits. The legal factors include the laws enforced for
the protection of the business. Lastly the economic factors predict the growth of the business
for the future prospects. Overall analysis has been analysed for the sustainability of the new
coffee shop that will be launched in Australia.

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“In Australia, What can go best with one cup of coffee? It’s another cup of coffee.”
Coffee is considered as the global commodity and the culture of coffee shops are emerging
across the world. Countries are inclined to have their own flavour of coffee shop literature,
each shop with their own history, culture and influenced by the immigration of commodities
and people around the world. An interesting case in Australia which describes the world as
“the coffee capital” which is said by Perfect Daily Grind. It has also been argued that the
Australian culture of coffee shop has achieved a footing which represents “time out”
sophistication, intimacy and warmth, with barista which represents the culture icons.
Developing Coffee shop in the local vicinity of Australia requires the external
analysis of the market. The external analysis includes the political, economic and legal issues.
The essay provides information on market size to assist with strategic decision. The political
business environment helps to identify the issues related to policies of the government such
as globalisation, landscape and the taxation policy of the government. When opening a new
business such as coffee shop.
The Political and Legal factors influencing the launching of new coffee shop. The
political and legal related to the opening of new coffee shop in Australia- Under the
parliamentary democracy “the Commonwealth of Australia is federal constitutional
monarchy”.The trading agreement involvement of government influence the tax policies
which must be considered for new market. When considering Australia, it is democratic
capitalism where the state keeps interfering significantly in the economy through various
responsibilities (Watts and Casanovas 2018). Australia is a secure place for business with a
transparent legal and tax system.
The Constitution of Australia associates with the specific powers of federal
Parliament to provide laws with relation to the national matters. The three tiers of

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government that is the federal parliament, the state parliament, and the local council also
impacts the business it becomes an external source for every new business. The Australian
state, federal and local laws protect business, the customer and the business man from unfair
trading. These codes of practice of industry embedded within the law helps the business
operate competitively, fairly and confirms that the customers are protected and informed with
proper information (Seid 2018).
There are some important legal requirements that concerns with the launching of new
small business.
Registered Business Names
Business Licensing and Permits
Business Laws and Business Regulations
Federal Taxes
Local and State Taxes
The Federal Parliament-The Federal Government has the authority to make
immigration, communication, defence, trade, foreign affairs, taxation, and postal services.
The federal government is responsible for raising the money by collecting tax on goods,
services, incomes and company profits.
According to the “Business Names Registration Act 2011”on 13th October the
foremost task when opening a new business is to register the business name. After the
registration the business need to attain “Australian Business Number”(ABN) and Tax File
Number (TFN) which enables certain permits and license which depends upon the business
and industry. The new system expects to make the business name registration easier,
cheaper and efficient. The registration system benefits the business by accessing them to

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maintain only one application while registering the business name. There are certain
boundaries while registering the names, the business names will not be registered if-
The name is identically or even merely identify, an already registered business or
company name cannot be registered again with the same name, if the word is restricted such
as (Anzac), if the ministry declare it as an undesirable name, if the business name is deceive,
mislead or offensive. Therefore, the coffee shop needs to register before proceeding further
into the business(Udin et al 2019).
When opening a new coffee shop this taxation system and trading system must be
taken care off.The Australian government policies are formulated with consultative and open
business manner which results in large predictable and transparent policy-making process this
makes easy for new business initiators to operate further in the their local vicinity. The
business must focus on the company tax, capital gain tax, goods and service tax and payroll
tax.. The business groups have well-funded and active lobbying groups which is dedicated to
influencing government policy this gives to the new initiators a good scope to focus on the
social and environmental activism (Roos and Cheeshire 2019).
The Intellectual Property of Australia-The Intellectual Property laws protect the
business giving legal rights to the business which includes designs, trademarks, formulate,
patents, secret process and copyrights.
The Consumer law in Australia puts a great impact on the Australian business,
therefore it is necessary to understand these act which can also impact the business strategy.
The Australian Consumer Law (ACL) seeks to protect the consumers from unfair practices
practiced by the business and it correlates with the Australian Competition and Consumer
Commission to control and enforce the laws and regulations related to consumer laws (Scott
2018). Other laws which include the free charge bills including Australian Business Number

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on receipt it also commands refunds for the returned goods and the goods which does not
meet the expectations of the consumers.
The State parliament creates law which is enforced within own territory or state for
the things including electricity, mining, agriculture, railways, hospitals, roads, shops,
restaurants, water and schools. The State/territory governments inflates money from tax but
the state government receives more than the half from the federal government (Sadgrove
2016). The state government deals with all the new construction which are built in the local
vicinity hence confirmation and legal documentation are to be maintained for opening of the
new coffee shop.
The Local government is responsible for the handling of the community requirements
such as public recreation facilities, town planning and town planning. The state government
is responsible for the power of local governments and takes decisions that in which
geographical are the government is responsible for. Therefore, before building up the coffee
shop the laws of local government are determined.
The Economic Factors influencing the coffee shop business. Interest Rate- The
interest level of Australia is observed as low which directly supports the economy of

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Australia. It is the best time for the new entries to grab the opportunity in the new market.
Rate of interest:
(Source: Rba.gov.au 2019)
Trade- Trading in Australia has always become a risk in Australia, the trade tension
will remain unpredictable.
Inflation- According to the Australian Committee it has been noted that the inflation
rate still remains stable and low and it is highly expected that it will gradually pick up over
the coming years, while it is also expected that the economy will grow by 3 % (2019) as it is
supported by the business investment vastly spending on employment and infrastructure
(Graedel et al. 2019). Therefore, it is observed that it is a good opportunity for the launching
of new business in the market.

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Inflation rate over the years:
(Source: Abs.gov.au 2019)
Supply and Demand- According to Australian reports around three quarter of
Australian population have at least one cup of coffee each day. Almost more than 75% of
population have coffee each day. Moreover 28% drink coffee three times a day. The above
researches shows the supply and demand of coffee in Australia. The new coffee shop has
good opportunity to open at the instance in Australia.
Elasticity- Based upon the determinants of elasticity of price it is affirmed that the
demand for coffee is considered to be elastic. It is because there is a close substitute for
coffee that is tea therefore there is higher chance of switching from coffee to tea by the
consumers of coffee if the price increases (Rhoades and Smart 2018).The price of coffee is
increasing in Australia specially Starbucks, still an interesting fact about coffee is with the
increase in price the supply and demand is not decreasing rather it is increasing with the
upcoming years. There are huge fans of coffee in Australia due to knowing scientific
advantages of coffee as per the studies.

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Therefore, it can be concluded from the above discussion that from the following
legal, political and economic market analysis due to the higher consumption of coffee in
Australia it is a good opportunity for the launching of new coffee shop in Australia. In
Australia though the price of the coffee is increasing Australian have a high demand for
coffee. The legal and political issues are concerned while opening the shop which will help
the shop to adopt legal support from the federal government and will help to avoid from
unethical and illegal practice if practiced during the business.

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Reference List
Abs.gov.au. (2019). ABS Chief Economist - 70 Years of Inflation in Australia. [online]
Available at: http://www.abs.gov.au/websitedbs/d3310114.nsf/home/abs+chief+economist+-
+70+years+of+inflation+in+australia [Accessed 24 Mar. 2019].
Graedel, T.E., Reck, B.K., Ciacci, L. and Passarini, F., 2019. On the Spatial Dimension of the
Circular Economy. Resources, 8(1), p.32.
Rba.gov.au. (2019). [online] Available at:
https://www.rba.gov.au/publications/rdp/2018/pdf/rdp2018-05.pdf [Accessed 24 Mar. 2019].
Rhoades, G. and Smart, D., 2018. The political economy of entrepreneurial culture in higher
education: Policies toward foreign students in Australia and the United States. In The Social
Role of Higher Education (pp. 125-160). Routledge.
Roos, G. and Cheshire, A., 2019. Conclusions for South Australia From the Analysis.
In Harnessing Marine Macroalgae for Industrial Purposes in an Australian Context:
Emerging Research and Opportunities (pp. 171-179). IGI Global.
Sadgrove, K., 2016. The complete guide to business risk management. Routledge.
Scott, C., 2018. Enforcing consumer protection laws. In Handbook of Research on
International Consumer Law, Second Edition. Edward Elgar Publishing.
Seid, S.H., 2018. Global regulation of foreign direct investment. Routledge.
Uddin, M.N., Techato, K., Rasul, M.G., Hassan, N.M.S. and Mofijur, M., 2019. Waste coffee
oil: A promising source for biodiesel production. Energy Procedia, 160, pp.677-682.
Watts, D. and Casanovas, P., 2018. Privacy and Data Protection in Australia: a Critical
overview.

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