Analyzing Market Dynamics: Coffee Shop Launch in Sydney, Australia

This report provides a comprehensive market analysis for launching a coffee shop in Sydney, Australia. It examines the legal, political, and economic factors influencing the business, including registration, licensing, taxation, and government regulations. The analysis considers the Australian market's high coffee consumption, the impact of political and legal frameworks, and economic indicators like interest rates and inflation. The report also explores the elasticity of coffee demand and supply dynamics, concluding that the new coffee shop has a good opportunity for business in the local vicinity. The study emphasizes the importance of adhering to legal and ethical practices and highlights the support offered by the three tiers of government. The report includes an abstract, introduction, discussion of key factors, and a conclusion, along with references.

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MANAGING MARKET
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Abstract
Coffee a well-known and world-wide beverage, around the world each year the coffee
consumption is accounted to be 400 billion cups. The study depicts the analysis of market of
coffee shop in their local territory of Sydney, Australia. The following essay chiefly aims at
the legal, political and economic issues which influences the opening of new coffee shop in
Sydney, Australia. The political factors emphasizes the registration of the business, licensing
and permits of the company. The legal factor includes rules and regulation enforced by law
for the protection of the firm along with these factors the economic factors describe the
growth of the business for long-term future aspects. The essay analyses the overall analysis
of the market in Australia for the sustainability of the new coffee shop which is going to
launch in Australia.

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Introduction
In Australia it is like “No Coffee No Work”. Coffee is the global commodity and the
coffee shops culture are emerging across the world. The new coffee shop consists different
flavours of coffee beans as the country is the largest consumer of coffee with vast consumer.
Australia is well-known for “the coffee capital” opined by Perfect Daily Grind. Australia is
elevated to maintain their own coffee flavour in coffee shop their own history, literature,
culture which has been affected by the globalisation of goods and the people across the
world.
Launching a new coffee shop in the local territory of Australia seeks the macro
business environmental analysis of the business market. The macro business analysis
incorporates the political, legal and economic factors. The essay infers adequate information
on Australian market to take proper strategic analysis and decision for the company. The
political factors of the country help to identify the possible issues related to the rules,
regulation, norms of the government to be followed by the business in order to not get
penalized by the government. The business need to follow the taxation policy while
launching the new coffee shop.
Discussion
The Legal and Political factors, the external business factors which impacts the
business when opening the coffee shop in the local area- Australia under the parliamentary
democracy “the Commonwealth of Australia is federal constitutional monarchy” (Beatty et
al. 2018). The trading agreement of the country’s government affects the taxation policy
which must be taken into account for the new entries in the market. When considering a
country like Australia, it is a democratic capitalism in which the state interferes in the

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economy through many responsibilities. Australia has a secure business environment with
transparent tax and legal system (De Cilva 2018).
The three tiers of government federal parliament, the territory parliament and the local
council also plays a vital role in influencing the business. The federal, territory and local
parliament laws act as a shield to the business, the business man and the customer from
practicing any unfair trading (Gruber 2017). The rules and regulations enforced by law helps
to business to operate in fair, competitive way of trading that confirms that the customer are
protected and are informed with adequate and proper information.
The laws which is required while launching the new coffee shop.
-Registration Business Name
-Business Permits and Licensing
-Business Regulation and Business Laws
-Federal Taxes
-State and Local Taxes
The Federal Parliament- The federal government has the rightful authority to enforce
law on postal service, defence, taxation system, immigration, foreign trading, immigration,
and communication. The federal parliament concerns for lifting money by assembling tax on
goods and services, company profits and incomes (Hamilton and Webster 2018).
Registration business name is the first step while launching a new business.
According to the “Business Names Registration Act 2011” a company and business needs to
register their name, following the registration the business will attain “Australian Business
Number” and “Tax File Number”. These enables the business to get license and permits to
make further proceeds of the business. The new system enabled the business name

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registration cheaper, easier and efficient. There are many restrictions while registration of the
business names-
The name is similar or even merely identical, a hitherto registered business name
cannot be registered again, if the word is offensive like (Anzac) and if the ministers declare
the business name as an unacceptable name. Therefore, the coffee shop needs to avoid the
above mentioned points in order to register its business name.
When launching the coffee shop, the trading system and the taxation policy must be
considered. The government of Australia are framed with open and consultative business
manner policies which results in transparent and foreseeable policy making process, these
policies make convenient approach towards initiating the new business and proceeding
further in the local vicinity. It is required for the business to consider the company tax, goods
and service tax, payroll tax and capital gain tax. It is also observed that the business groups
are good funded and possess proactive lobbying groups which is influenced by the
government to give the new initiators a good opportunity to give emphasis on the
environmental and social activism.
Understanding the intellectual property of Australia, the laws are designed to protect
the business from frauds and unfair practices by giving the business their legal rights the
intellectual property includes trademarks, designs, patents, copyrights and secret process.
The Consumer Law in Australia puts a great impact on the Australian business, and their
business strategy. The Australian Consumer Law{ACL) aims to protect the customers from
the unfair practices practised by the business and it relates with the Australian Competition
and Consumer Commission to enforce and control the laws and regulation related to
consumer laws (Gray et al. 2016).

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The State parliament laws that is being enforced within the state for the things which
include shops, railways, electricity, mining, agriculture, hospital, roads, railways, restaurant,
school and water. Tax is raised by the state parliament and half of the tax is received by the
state government from the federal government. It is the concern of the state government in
regards to the new construction of buildings which are built within the local area hence
rightful documentation is required for the coffee business.
The Local council of Australia deals for maintaining the community requirements
such as town planning, public facilities and waste. The local government power is in the
hands of the state parliament (Smales 2015). Therefore it is important for the coffee shop to
maintain the law according to the local government.
The Economic factors which influence the new entries in the local market are-
Interest Rate
Inflation Rate
Trade
Elasticity
Supply and demand
Interest Rate- The interest rate of Australia is found to be low which supports the
Australian economy. Therefore when the interest rate is low it attracts the business in the
local market. The below mentioned graph shows the decreasing interest rate in Australia from
2018 to 2019.

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Source: (Trading Economics, Australia Bureau of Statistics)
Inflation rate- It is noted according to the Australian committee that the inflation rate
remains low that is 1.8% compared to previous year that is 2.1% and stable and it is highly
expected that it will increase within the upcoming years. It is also estimated that the economy
will rise by 3% in 2019 it is due to the support coming from the business investment spending
vastly on the infrastructure and employment (Graedel et al. 2019). Hence according to the
inflation rate analysis it is found that there is a good scope for the new entries that the new
coffee shop to get launched in the market.

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Source: (Trading Economics, Australia Bureau of Statistics)
Trade- In Australia the trading is observed to be quiet risky due to the low interest rate
it tends to repel the foreign investments, which decreases the value and demand for the home
country currency.
Elasticity- Coffee is an elastic commodity as there is a close alternative for coffee that
is tea hence the probability of shifting from coffee to tea is high if the price of coffee
increase. It is observed that the price of the coffee is inflating in Australia specially noted by
Starbucks. It has also been observed despite of increase in the price level of coffee the
demand and supply of coffee is high (Rhoades and Smart 2018). There are considerably
many fans of coffee in Australia it is due to the scientific pros of coffee according to the
reports.
Supply and Demand- According to survey of Australian Report it is found that
twenty-third quarter of Australian population have one or more cup of coffee each day. The
fan base of coffee is more as 28% of Australian population drink coffee three times a day
(Phillips and Joseph 2017). Henceforth it is observed that the supply and demand of coffee is
more. The coffee shop has better scope to launch its business.

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Conclusion
Therefore it is inferred from the above analysis that the political, legal and economic
factors provides the coffee shop has a good opportunity to launch its business in local vicinity
and the business is required to follow some laws and regulation to sustain in the market as
well as due to the high consumption of coffee in Australia the market supports the new café
shop to underpin its business. The legal and political laws and norms will help the coffee
shop to avoid illegal and unethical practices during the business. The three tier of government
helps to acquire the legal support for the running business.

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Reference
Beatty, J.F., Samuelson, S.S. and Abril, P.S., 2018. Business law and the legal environment.
Cengage Learning.
De Silva, A., Glover, J., Narayanan, V., Nguyen, T. and Westberg, K., 2018. Current issues
with trusts and the tax system.
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.
Gray, S., Harymawan, I. and Nowland, J., 2016. Political and government connections on
corporate boards in Australia: Good for business?. Australian Journal of Management, 41(1),
pp.3-26.
Gruber, B.B.S., 2017. LEGAL FRAMEWORKS FOR WORLD HERITAGE AND HUMAN
RIGHTS IN AUSTRALIA. World Heritage and Human Rights: Lessons from the Asia-
Pacific and global arena.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford
University Press.
Phillips, B. and Joseph, C., 2017. Regional housing supply and demand in Australia. Centre
for Social Research & Methods. Canberra: Australian National University.
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.
Scott, C., 2018. Enforcing consumer protection laws. In Handbook of Research on
International Consumer Law, Second Edition. Edward Elgar Publishing.

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Smales, L.A., 2015. Better the devil you know: The influence of political incumbency on
Australian financial market uncertainty. Research in International Business and Finance, 33,
pp.59-74.