BSBMGT616: Strategic Planning & Implementation for Coffeecom

This report provides a detailed analysis of Coffeecom's strategic business expansion plan in Australia, utilizing PESTLE and SWOT analytical tools to assess the company's current business performance. The PESTLE analysis examines the political and legal landscape, highlighting Australia's political stability, bilateral relationships, taxation policies, and export/import laws. It also delves into economic factors such as the value of the AUD and the capital market, noting the impact of fintech on capital mobilization. Technological factors, including advanced machinery and data theft risks, are considered, along with environmental factors and relevant legislations. The report further explores the economic factors influencing Coffeecom's expansion, such as currency exchange rates and the role of fintech in capital markets. It emphasizes the importance of advanced technology and data security for business operations. This document is available on Desklib, a platform providing study tools and solved assignments for students.

Running head: BUSINESS EXPANSION
BUSINESS EXPANSION
Name of the Student:
Name of the University:
Author Note:

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Part 2B:
The various analytical tools which would provide substratum to the analysis of the
current business performance of Coffeecom would be PESTLE and SWOT. These two
analytical tools would provide grounds against which the given case study of Coffeecom would
be judged.
PESTEL of Australia:
The following is the PESTEL analysis of Australia:
Political and legal:
The following are the political factors which would be considered while measuring the
market performance of Coffeecom:
Political stability:
The country of Australia is politically stable with the executive powers resting in the
hands of the Prime Minister and his cabinet. Queen Elizabeth II is the nominal head of the state
with representatives both in the central level and state level. The Government of Australia is
stable and makes policies which form the base of the industrial operations within the country.
The state governments make laws at the state levels while the local levels. The government
bodies makes laws which the companies have to comply with (Australia.gov.au. 2019). Some
laws like the environmental and consumer protection laws apply for all the business
organizations while other laws like the food related laws apply to the companies operating in the
food industry. This political stability of Australia has led to development of both product and
services offering industries. This industrial development of Australia has also encouraged growth
of supporting or allied industries to provide support to the manufacturing and services offering

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industries. This development of mainstream and allied industries have transformed Australia into
an industrial giant. However, it can also be pointed out that the political stability of the Australia
has also attracted several foreign companies (Aph.gov.au. 2019). For example, as far as coffee
vending machine industry is concerned, Australia is already one of the most fiercely protected
markets of leading American multinational companies like Starbucks. These companies
manufacture highly sophisticated coffee vending machines which easily gain acceptance among
the leading hospitality groups. As mentioned in the case study, Coffeecom provides coffee
vending machines to top hospitality organisations. Thus, in this respect it can be pointed out that
foreign companies like Starbucks easily surpass the local companies like Coffeecom. Thus, it can
be inferred from the description that the political stability of Australia is both a driving factor and
a challenge for the resident business organsiations.
Bilateral relationships:
The Government of Australia has strong bilateral relationships with several countries like
New Zealand, the United States, the United Kingdom and the European Union. The country also
has strong bilateral relationships with the leading Asian countries like China, India, Singapore
and Malaysia. The country is a members to several international bodies like the United Nations
(Australia.gov.au. 2019). These strong bilateral relationships have several advantages to the
resident companies of Australia. The Australian companies are able to expand into foreign
countries to get access to the resources of those countries. This access to resources encourages
innovations in the companies in Australia. The Australian companies are able to invest in the
financial markets of other countries and are able to take the advantage of the differing rates of
interests to earn high ROI. The table below shows that different regions of the world gives
different ROIs. For example, Africa gives back 138 percent while East Asia and Pacific gives

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171 percent as on 1994-2003. This means that the Australian companies can invest in African
capital market to earn higher rates of returns on investments. This enables the companies to
diversify the investment risks which they may incur due to fall the economic conditions in the
resident economic market namely Australia in this case.
Figure 1. Median economic rates of return of World Bank evaluated operations
(Source: Dalgaard and Hansen 2015)

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Taxation:
The taxation policies which the business organisations operating in Australia are imposed
and control by the Government of Australia as well as state governments within respective state.
As per the Australian Trade and Investment Commission, the business organisations both foreign
and resign have to pay certain taxes the rate of which differ as per the government decisions. The
first category of tax which companies pay in Australia is company tax. The resident Australian
companies have to pay taxes at the rate of 30 percent approximately. The foreign companies
have to pay similar rate of taxes on the portion of income sourced from Australia. The next
category of taxes which the businesses in Australia have to pay on the capital gains they earn
from sale of assets. Goods and Services taxes are charged sale of consumer goods and services
in Australia at the rate of 10 percent at present (Ato.gov.au. 2019). The next category of tax paid
is payroll tax which the employers have to pay for paying wages to their employees above the
threshold limit determined by the particular state governments. The other taxes like land taxes
and fringe benefit taxes are imposed by the central and state governments in Australia
(Austrade.gov.au. 2019). As far as Coffeecom was concerned, the case study mentions that
the company was involved in providing espresso machines to hospitality companies in Australia.
This means that the company in the light of the above discussion would be required to comply
with the taxation laws laid down by the Government of Australia. The company would be
required to charge GST for selling machines to hospitality companies like hotels. Further, the
case study in one of the scenarios mentioned that the more advanced espresso machines using 30
percent less energy would be replacing their previous version. Thus, it can be pointed that
Coffeecom would be required to sell the old machines to acquire new machines. This means that
the company would be required to pay taxes on the profit it receives on the sale of machinery

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(Yagan, 2015). This shows that political factors in terms of taxation policies play significant role
in the operations of business organisations in Australia.
Export and import laws:
The import and export laws enacted by the Government of Australia play very significant
role in the business operations of business organisations operating within the country. The
Australian Trade and Investment Commission mentions that the country has strong trade
contracts with several nations in the world which enable the business organisations operating in
the country to export and import goods. The ATIC mentions that the country has Free trade
agreements with several countries which enable the organisations operating in Australia get
access to the markets and resources of the FTA partners (Austrade.gov.au. 2019). The
Government of Australia imposes taxes on the imports and exports as per the policies laid down
by the World Trade Organisation (Wto.org. 2019). This means that the government of Australia
regulates import and export of goods.
As far as Coffeecom is concerced, the case study mentioned that the company would be
importing resources from overseas market. This means that Coffeecom would be coming under
the purview of exim laws enforced within Australia.
Economic factors:
The following are the economic factors which Coffeecom would be required to consider
while expanding within Australia as mentioned in the case study:

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Value of AUD in the international currency market:
Figure 2. Graph showing exchange rate of AUD against USD, GBP, INR and SGD
(Source: Bloomberg.com. 2019)
The graph above shows the exchange rate of AUD against four selected international
currencies namely, USD, GBP, INR and SGD. The graph shows that AUD is weakening against
all selected currencies. This means that if the bearish trend of AUD exchange value continues,
the companies in Australia would have to import resources from these nations at higher value.
They on the other hand would lose a part of the revenue when they would convert the sales
figures obtained from these foreign market. Delis, Politsidis and Sarno (2018) mentions in this
respect that foreign currency values are volatile and have significant impacts on the capital
generation and investments strategies as well. This is because, the value of currencies of every
country is subject to changes which in turn impacts the value the market yields due from
investment. For example, if the value of AUD falls, the value of ROI organisations can generate

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on their investments in the Australian securities market would also fall. This means that the
investments in one single economy can present considerable investment risks. Thapa, Neupane
and Marshall (2016) opine that business organisations in order to diversify the investment risks
should invest in several foreign currency. This would enable them to diversify the losses they
would incur due to fall in value of one currency over the profit they would earn from investments
in other foreign currencies.
The case study mentions that Coffeecom imported machine and coffee from overseas
market. This means that the company would directly come under the influences of the volatile
exchange rates (Álvarez-Díez, Alfaro-Cid and Fernández-Blanco 2016).
Capital market:
The second economic factor which Coffeecom would be required to consider would be
capital market in Australia. PWC mentions that the capital market in Australia is robust and
heavily controlled by the government. However, the sector is facing strong challenges like
slowing down economy in Australia and increasing cost of funding (PwC.com. 2019). The
Australian, one of the most circulated dailies of Australia report that use of financial technology
is boosting the Australian economy. The Australians are today able to invest in the capital market
using the laptops and smart phones. The investors in Australia are able to gain real time data
about the Australian securities market which is facilitating taking of more accurate investment
decisions (Theaustralian.com.au. 2019). Thus, it can be inferred from the discussion that fintech
has facilitated faster mobilisation of financial capital which has strengthened the Australian
capital market.
As far as Coffeecom is concerned, the case study clearly mentioned that the company
was looking forward to expanding beyond Sydney. This means that the company would

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requiring more financial capital. Saksonova and Kuzmina-Merlino (2017) opines in this respect
that business expansion requires immense financial acquisitions and traditional banking networks
are not sufficient to provide the firms with financial resources. Fintech can be used by firms to
acquire capital which they can in turn channelize towards their business needs. The businesses
like Coffeecom can also give higher returns to the investors on their respective investments.
Thus, it can be pointed out that the capital market of Australia boosted by fintech would boost
the businesses of Coffeecom both in Sydney and in its new business locations.
Technological factors:
The following are the technological factors which Coffeecom should take into account
while expanding in Australia:
Advanced machinery:
The first technological factor which the business companies need to consider would be
availability of advanced technology. As far as Coffeecom is concerned, the company vends
espresso machines to hospitality organisations in Australia. This means that the company was
dependent on advanced technology. The company had to ensure that it was able to provide its
business customers with coffee vending machines using the most advanced technology. The
company also required advanced technology to communicate with its business customers. As far
as Australia is concerned, the company is technologically advanced. The country is already an
important market to leading information and communication technology companies like Amazon
and Google. These companies provide the companies like Coffeecom with advanced internet and
communication facilities which enable them to communicate with their business customers.
Thus, it can be inferred that advanced technology boost businesses of business organisations like
Coffeecom.

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Data theft:
Data theft is the biggest technological challenge business organisations face. This is
because the companies use advanced technology to acquire, share, manage and implement a
large amount of business data about their customers. Data leads them to lose strategically
important business data including financial data to unauthorised identities. This results in
business organisations incurring huge losses owing to losing customer data.
Environmental factors:
The following are the environmental factors which business organisations like Coffeecom
would consider while operating in Australia.
Environmental law:
The business organisations operating in Australia have to comply with the environmental
laws in power in Australia. For example, the Environmental Protection and Biodiversity
Conservation Act 1999 mandate all the business organisations to operate in Australia so as not
harm the biodiversity areas of the country (Environment.gov.au. 2019). As far as Coffeecom is
concerned, the company operated in the coffee vending industry which means that company had
to acquire raw materials like coffee from different foreign markets. This also means that
company required to obtain natural resources like water, the basic raw materials for making
coffee. The company had to ensure that it did not exploit the natural resources so as to attract
government actions (Sarooghi, Libaers and Burkemper 2015).
SWOT of Coffeecom:
Strengths:
1. Coffeecom is financially strong which is
Weaknesses:
1. The company was restricted within Sydney.

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evident from the balance sheet.
2. The company catered to the hospitality
industry which is a booming industry.
3. Serving hotel industry attributed the
company with high revenue which attributed
it with a strong financial base.
2. This limited market restricted the revenue
generation.
3. The sales figure of the company showed a
very slow rate of increase.
Opportunities:
1. Investment in new markets within
Australia.
2. Expansion into markets beyond Australia in
the long run.
3. Investment in advanced technology.
4. Innovation in coffee vending machines.
5. Boosting promotion in the market.
Threats:
1. The company had limited competitive
advantage compared to stronger competitors
like Star Bucks which already has strong
presence in Australia.
2. Operating restricted within Australia.
Hence susceptible to market risks.
New strategic plan of Coffeeco:
An analysis of the current performance of Coffee, PESTEL analysis and SWOT analysis
clearly shows that though the company is financially strong which is evident from its expansion
plans, it require forming new strategies to sustain in the future. The following are the strategies
which the company’s management can undertake to ensure future business expansion:
Promotion:
The management of Coffeecom should promote its services all over Australia. An
analysis of the case study reveals that the revenue generation of the company is almost stagnant

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with minimum increase percentage which is the issue with the company. The company should
promote its services all over Australia so as to gain a nationwide customer base which would
boost its revenue generation.
Foreign expansion:
The company should expand into foreign countries to generate high revenue and capital.
The company is restricted within Australia and considering the bearish trend of AUD, it can also
be proved that the company was earning lower ROI (Bloomberg.com. 2019). Expansion into
foreign markets would enable the company in hedge in foreign securities and earn higher ROI.
This high ROI earned from foreign securities market would enable the company to channelize
more capital towards its strategic plan of business expansion.
Part C:
The stakeholders whose feedback would be considered would be management,
employees including middle level managers, suppliers, business customers and investors. The
starting date of the plan would be April 1, 2019. The following is the strategy plan of Coffeecom
presented both in form of an excel sheet and WBS:
Activity
nos Coffeecom's strategic plan Time(months)
1
Management hold meetings with
departmental heads 1
2 Collects feedback from employees 0.5
3 Forms strategies 1
4
Holds meeting with main suppliers and gain
feedback 2
5
Holds meeting with main foreign suppliers
on Skype 1
6 Obtains feedback from foreign suppliers 1
7
Holds meetings with main business
customers and gain feedback 2

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8
Board meets departmental heads to discuss
feedback 2
9 Final strategy formed 1
10 Aggressive promotion of present services 6
11 Expands business in new Australian markets 12
Coffeecom's strategic
plan
Management hold
meetings with
departmental heads
Collects feedback
from employees
Forms strategies
Holds meeting with
main suppliers and
gain feedback
Holds meeting with
main foreign
suppliers on Skype
Obtains feedback
from foreign
suppliers
Holds meetings with
main business
customers and gain
feedback
Board meets
departmental heads
to discuss feedback
Final strategy
formed
Aggressive
promotion of
present services
Expands business in
new Australian
markets

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References:
Álvarez-Díez, S., Alfaro-Cid, E. and Fernández-Blanco, M.O., 2016. Hedging foreign exchange
rate risk: Multi-currency diversification. European journal of management and business
economics, 25(1), pp.2-7.
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[Accessed 9 Mar. 2019].
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Delis, M.D., Politsidis, P. and Sarno, L., 2018. Foreign currency lending.

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Sarooghi, H., Libaers, D. and Burkemper, A., 2015. Examining the relationship between
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factors. Journal of business venturing, 30(5), pp.714-731.
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bigger-than-you-think/news-story/f7a42de31e8faae702d8ae25afc1c87c [Accessed 11 Mar.
2019].
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