Strategic Management Analysis of Revelator Coffee for Expansion in Australian Market

This report analyzes the environment and strategies for the expansion of Revelator Coffee in the Australian market. It includes a PESTLE analysis, Porters Five Forces Framework, competitor analysis, customer analysis, and micro-level analysis. The report concludes that Australia is a favorable market for expansion.

Strategic Management

STRATEGIC MANAGEMENT 1
Introduction
In this report, Revelator Coffee has been taken into consideration to analyse the environment
in order to adopt the effective strategies for the expansion of the business. Revelator Coffee is
an American roasting company which operates in US (Revelator coffee, 2019). Now, it wants
to distribute its coffee drinks in Australian Market with the aim of expansion of coffee
business. Different business tools are used to analyse the environment such as PESTLE,
Porters Five Forces Framework. Resources and Core capabilities of the product will also be
analysed.
Macro environmental Analysis
PESTLE Analysis
Political
 Revelator Coffee operates in US
within the limited areas. While
expansion, political factors affect the
growth of the product such as trade
relationship. For example- it is
difficult to enter the American market
as per the high sentiments. But it is
easy to enter the Australian market as
per flexible rules and regulation.
Economic
 Australia is a mixed economy with a
GDP of $1.69 trillion. The purchasing
power of consumx`er is high due to
which the demand of coffee drinks is
high (Australian Government, 2018).
 Price of product is affected on the
basis of inflation rate and different
income levels. The company invest
the large amount in promoting the
product to satisfy the consumer.
Social
 Australia is the places of diverse
Technology
 Australian is known company for

STRATEGIC MANAGEMENT 2
people due to which the taste and
demand of consumer is differ as per
their background.
 Australia people follow the western
culture that is why; they would like to
spend more time in café’s.
adopting the advance new technology
at the fast rate.
 Coffee companies of Australia also
adopt the advance technology in order
to promote the product through social
media.
Legal
 Australian Government have their
own rules and regulation regarding
related to supply of coffee such as
health and safety laws, consumer
protection.
 It is required for the company to open
the store with the government license.
Environmental
 Australian Government develops the
environment polices in order to
protect the environment.
 Australia has many deserts while
most of areas are polluted. The
changing weather of Australia affects
the supply of coffee (Tang, 2018).
Porters Five Forces Framework
Threat of new entrants
 Moderate degree of threat
 Low cost
 Require to invest the high cost in
order to develop the brand image
Bargaining power of suppliers
 Low degree
 Easily available ingredients
 Low switching cost
Bargaining power of consumers The threat of substitute

STRATEGIC MANAGEMENT 3
 High degree
 Low switching cost
 Large number of companies /offer the
same taste of drink (Lasserre, 2017)
 High degree
 Soft drinks such as Cold drinks, milk
shakes, and other shakes.
The threat of competitors
 High degree
 Large number of companies such as Starbucks, Unilever, and many others.
Competitors Analysis
Costa Coffee, McDonald, Starbucks and many others are the main competitors of the product.
Costa coffee earned £1.167 billion which is less as compared to $21.025 billion of
McDonald. As per the facts and figures, Nestle earned the high amount $ 91.43 billion as
compare to its competitors.
Strategic Group Analysis
McDonald, Starbucks, and Costa Coffee are the companies who provide the similar nature of
product with the different strategies such as cost leadership and market development.
Environmental Stability
Coffee shops of Australia use the solar system in order to protect the environment. The cafe
shop develops the more sustainable environment by using the different packaging, and
managing waste (Revelator coffee, 2019).
Customer Analysis
Mostly the people of young age, teenagers, families, and tourist are the main customer
segment of the coffee. Australians value healthy products but they are also willing to pay for

STRATEGIC MANAGEMENT 4
good taste. The coffee product satisfied the demand of consumer in taste but fail to satisfy the
demand of healthy product. Coffee drinks cannot be considered as the healthy product for
consumers that is why it is fail to meet the demand of healthy product (Aithal, 2016).
Micro Level Analysis
Strength and Weaknesses
Strength
Good taste
Attractive packaging
Weakness
Low brand image
Competitive companies
Distinctive Skills
 Coffee product has the capacity to attract the customer and being a leader.
 Flexibility
 Ability to delegate
 Provide the quality of services (Tallman, 2015)
Capabilities and competencies
Capabilities
Provide quality of product
Satisfy demand
Reduce stress
Competencies

STRATEGIC MANAGEMENT 5
Focus on quality
Continuous Advancement of Product
Care of its employees
Attractive services
Resources
 Employees
 Ingredients
 Coffee Machines
 Furniture (Revelator coffee, 2019).
Value chain analysis
Primary Activities
Inbound logistics
 Franchises to distribute product
 Warehouses to store the product
(Ansoff, Kipley, Lewis, Helm-
Stevens, and Ansoff, 2019)
Operations
 Producing the coffee drinks
 Attractive Packaging’s
Outbound Logistics
 Use different type of glasses to
deliver the coffee drink
 It uses fresh material for drink
Marketing & Sales
 Promote the services by social media,
newspapers, and radios.
Service
Packaging glasses and serving glasses are attractive in order to maintain the quality of coffee

STRATEGIC MANAGEMENT 6
drinks.
Supporting Activities
Procurement
Coffee Machines are used to deliver the
quality of services
Milk, coffee powders, chocolates are the
ingredients that used for quality of services
Technology Development
High investment on Coffee Machines
Packaging Machines
Human Resource Management
165 employees
Main asset (Revelator coffee, 2019).
Infrastructure
Moderate in terms of finance
Legally approved by government
Conclusion
At the end of the report, it has been concluded that the company can expand its Coffee
business in Australia as it is favourable market. As per the analysis, it has been seen that the
Australian government have flexible rules and regulation for new entrants. It is also
beneficial for the company in the terms of increasing demand of consumers. But it is
observed that the consumer have a high threat of competitors as it have low brand image.

STRATEGIC MANAGEMENT 7
References
Aithal, P. S. (2016) Study on ABCD analysis technique for business models, business
strategies, operating concepts & business systems. International Journal in Management and
Social Science, 4(1).
Ansoff, H. I., Kipley, D., Lewis, A. O., Helm-Stevens, R., and Ansoff, R. (2019) Implanting
strategic management. Springer.
Australian Government. (2018) Statistics. [online] Available from:
https://www.australia.gov.au/about-australia/facts-and-figures/statistics [Accessed 27/3/19].
Lasserre, P. (2017) Global strategic management. Macmillan International Higher Education.
Revelator coffee. (2019) Our Approach. [online] Available from:
https://revelatorcoffee.com/pages/about [Accessed 27/3/19].
Tallman, S. (2015) Dynamic capabilities. Wiley Encyclopedia of Management, pp. 1-3.
Tang, E. (2018) 2017-18 GDP growth rate of 2.9% confirms the resilience of our economy.
[online] Available From: https://www.austrade.gov.au/news/economic-analysis/2017-18-gdp-
growth-rate-of-2-9-per-cent-confirms-the-resilience-of-our-economy [Accessed 29/3/12].