
HI6006 Competitive Strategy Editing Service
Delivery in day(s): 4
Outline one relevant Australian and one international standards/policies/guidelines, including those covering:
Australian | Example | Description |
Environmental matters | “Environment Protection and Biodiversity Conservation (EPBC) Act” | This act is the Australian Government’s main legislation for environmental protection. The act provides legal framework for protecting nationally and internationally acclaimed flora, fauna, ecological communities and heritage places
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Human rights | “Australian Human Rights Commission Act 1986” | This right has established the Australian Human Rights Commission and its function covers different human right aspects such as civil and political rights of the people, discrimination of the people with respect to occupation and employment and many more
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Labour relations | “Workplace Relations Act 1996” | The principal purpose of this Act is to deliver a guideline for collaborative workplace environment which brings the economic opulence and welfare to the people of Australia |
Packaging | “TGA (Therapeutic Goods Administration)regulation of product labelling and packaging” | The law aims to check the product label that contains information specified by the legislation which includes “product name”,” ingredients and there quantities”, “batch number”, “expiry date”, “storage conditions”, “directions for use” etc.
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Risk management | “AS/NZS ISO,2009” | This legislation defines the Australian and New Zealand risk management Standard. The legislation covers the definition of risk and 11principles to be followed for risk management |
International | Example | Description |
Environmental matters | “Asia-Pacific Partnership on Clean Development and Climate” | This international legislation has been developed in order to develop and transfer technology that will enable partner countries to reduce the greenhouse gas emissions under the monitoring and cooperation of the Foreign, Environment and Energy Ministers of the partner countries (Australia, Canada, India, Japan, the People's Republic of China, South Korea, and the United States).
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Human rights | “Universal Declaration of Human Rights (UDHR)” | “ United Nations General Assembly “ adopted this legislation on human rights on 10th December,1948” |
Labour relations | “International labour law” | This legislation gives us the set of rules that are intended to regulate the rights and duties of the employees, employers, trade unions and governments to maintain the discipline at the workplace and the legislation is applicable across boundaries (Fiske & Taylor, 2013) |
Packaging | “ICAO” | This legislation provides guidelines for packaging during international air travel. Different airlines use this legislation to follow a proper guideline of packing while transporting goods from one country to other |
Risk management | “Legal Governance, Risk Management, and Compliance or "LGRC” | This international legislation provides a multifaceted set of processes, rules, tools as well as systems that are used by the legal section of the corporate to adopt, apply and monitor a synchronized approach to business problems
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The E-commerce or electronic commerce is the way in which goods and services are bought and sold and funds or data are transmitted through an electronic network which is primarily the internet.
The term B2B or business-to-business refers to the trade of goods and services or exchange of information between two businesses, rather than between businesses and consumers mainly through internet.
The term B2Cn refers to business or transactions conducted directly between a business and their consumers who are also the end-users of the products or services of that company.
The term C2C or consumer –to-consumer refers to the environment where goods and services can be traded directly between the two consumers in an online environment (apps.fas.usda.gov, 2017).
The term C2B refers to specific business model where the end users of a business creates products and services that are consumed by the business
The term B2G or Business-to-government refers to a business model where the business is directly selling products, services or information to governments or government agencies.
The term ‘brick and mortar’ refer to the traditional business where the business owner is deals their customers face-to face in rented or personally owned street-side office .Examples of brick and mortar’ businesses are grocery store and the corner bank and some others like that (Schein, 2010).
On the other hand “click and mortar” refers to a business model where the company do their business through both online and offline platforms that typically include a website and a physical store.
Amazon
Ebay
Alibaba
“TCP/IP(networking protocol)”
“PHP (a programming script)”
“MySQL”
Serial No. | Legislation | Explanation |
1. | Age Discrimination Act 2004,Australia | An employee should not be discriminated with respect to age while he is applying for jobs |
2. | Australian Consumer Law (ACL) | This law ensures fair trading and protection to consumers |
3. | IM-FOR-0703-011 Labour Hire Agreement | This legislation refers to labor hire contract agreements in Australia |
4. | Free trade agreement (FTA) | This legislation regulates the bilateral, regional and multilateral trade negotiations |
5. | National Privacy Principles (NPPs),Australia | This legislation sets out rules that are to be followed by the businesses of Australia with respect to the collection, use, storage and disclosure of personal information |
6. | The Business Protection from Misleading Marketing Regulations 2008,UK | This legislation tries to protect the UK consumers from misleading marketing propaganda |
7. | Trade Marks Act 1995,Australia | This legislation defines certification marks ,collective marks, trademarks all that constitutes trademark breach and protects and exceptions of the users |
8. | Competition and Consumer Act 2010,Austalia | This Act is the legislative guide for competition law in Australia |
9. | Spam act 2003 Australia | This legislation prohibits the sending of unsolicited commercial electronic messages to the online consumers |
10. | Government Advertising Regulation 2012 | This legislation aims at regulating the proper advertising methods in Australia |
“OECD” or the “Organisation for Economic Co-operation and Development” (OECD is an organization that has been developed under the co-operation of 35 member countries in 1960. This forum has been established by the member countries to maintain democracy and a properly functioning market economy to facilitate free global trading. This platform allows the member countries to compare policy matters, to find out solutions to common problems to identify good practises and to maintain collaboration among the domestic and international policies of its member countries to facilitate international trade.Recently the OECD Trade Facilitation Indicators gives the estimation that a comprehensive implementation of all measures that have being negotiated in the WTO’s Doha Development Round is capable to diminish the total trade costs by 10% (De Mooij, 2010).
As a market research analyst I recommend that penetration in the Singapore retail coffee market is a viable international marketing opportunity
Qualitative analysis:
The country Australia has a free trade agreement with Singapore. Therefore if “A&A” steps in to the coffee retail industry of Singapore then the company do not have to face international trade barriers. The barriers to international trade is quite low to the country.
The country has very stable political situation as it is run by a stable government that rules strongly with an effective regulatory system. World Bank has ranked Singapore as the easiest place in the world to start, run and do business (Ebbeck, Chan, & Yim, 2011).
The county’s economy is highly business friendly. This Asian country only posses the AAA credit ratings from all three major credit rating agencies namely “Standard & Poor’s”, “Moody’s” and “Fitch”.The country’s unemployment rate is one of the lowest of the world
The country cater a multicultural lifestyle where everybody can live with harmony while following their own cultures. Any act of racism is seriously punishable in this country
Quantitative analysis:
The compound annual growth rate of coffee sales as a hot drink was 3.5% for the period 2006-2011,taking 2006 as the base year indicates huge potentiality and growth of the Singapore brewing industry.
The corruption is also very low in the country and it holds 7 th position in terms of corruption as per “World audit organisation” 2015
As per ASEAN Coffee Federation and Singapore Coffee Association Yearly consumption of coffee in Singapore is around 0,000 to 12,000 tonnes
Singapore is the 36th coffee consuming country that consumes 2.1 kg per capita
International trade pattern of coffee retail industry:
Change in new generation coffee consumption pattern:
The global young generation is more social and outgoing in comparison to their previous generation. Therefore the coffee consumption is now done more at public places rather than in house private consumption. This global trend demands eye-catching packaging and labels, showcasing of brand’s promises on the package or coffee cups, testing of new delivery systems and many more.
High demand for Ready-to-Drink Coffee:
The global market for “ready-to-drink” coffee has reached to $2.4 billion in 2015 and it is growing further. This pattern indicates that in a fast-paced world that is going to be faster the demand for “ready-to-drink” will increase further
High demand for Nitro-coffees:
In a fast paced life people are trying to stay healthy and fit. The need of healthy living has increased the demand for “Nitro coffee “that is poured from tap and give the feeling of a beer to the drinkers. More over the foamy and creamy texture of the coffee allows the drinkers to rely less on milk and sugar while avoiding the bitter test.
Demand for “Cold Brew” on the rise:
The “Cold brew coffee” has become very popular and as per Mintel report its sales has jumped by 580% from2011 to 2016.
Rise in the demand for speciality coffees:
As per the US coffee association in 2018 55% of the $48 billion U.S. retail coffee market will look for speciality coffee
In Asia-pacific countries coffee has become very popular in recent years. According to the reports of international coffee organization the demand for brewing is increasing at a rate of 4.9% p.a. Drinking coffee has become more like a lifestyle statement in this region. Thus if A&A follow the global trend then they will be easily able to penetrate in the potential market of the asia- pacific coffee market (Aljunied, 2013).
Pricing factor:
Pricing of the coffee cups should be made very economic after considering the other market rivals. There should be an on line coffee price comparison mechanism for the consumers on the web page where they are placing an order for coffee
Quality Factor:
The product quality should be properly described on the package so that the buy of the product can differentiate it from others in terms of quality and related price
Transaction security
The online web platform should ensure security for transactions that are made for product selling
Customer Support:
The customer support should available 24/7to answer the queries of the online customers.
Customer Reviews:
An option should be open to the customers for collecting customer responses so that improvement can be brought in to future service
A&A focuses to enter in the Asia-pacific region. Let us fuscous on the countries of this region. Australia practices “Free Trade Agreement” with Singapore and Thailand and free trade practice is yet to be practiced with Indonesia.
In my opinion Singapore should be ranked one as a potential coffee market that can be easily penetrated. Thailand should be ranked second as a potential coffee market that can be penetrated and Indonesia should be ranked third as a potential coffee market to be penetrated.
Singapore is a technologically developed and highly westernised country that posses a good brew culture and is Free Trade partner of Australia. More over the country has a high demand for speciality coffee. Therefore it will be easy for a new coffee retail chain to penetrate in to the market that capable to offer speciality coffee in a free trade environment where no additional tariff to be imposed on the new entrant of the industry. It will be slightly difficult for an Australian coffee retail chain to enter in Thailand as brewing is not an essential part of the culture of the country. However demand for speciality coffees and advantage of free trade can help a coffee retail chain to step in to the country (Chiu et al. 2014). It will be most difficult to penetrate the Indonesian brewing industry as there are many indigenous brewing shops that are backed by locally grown coffee beans and the price of this brewing shops quiet low with respect to international standard. Moreover a new entrant of coffee retail industry will not get the benefit of free trade agreement.
Australia peruse Free Trade Agreement (FTA) with Singapore and Thailand. The country also peruses Comprehensive Economic Partnership Agreement (IA-CEPA) with Indonesia.
FTAs promote the opportunity of freer trade flows and create stronger ties with the trading partners of Australia. The agreement not only removes the tariff barriers but also takes care of behind-the-border barriers that obstruct the flow of goods and services between parties. This in turn results encouragement for international investments and cooperation, and give protection for intellectual properties, smoothens the e-commerce operation and government procurements.
IA-CEPA aims to fortify and increase the trade, investment and economic cooperation between Australia and Indonesia.
A big market has been developing for retail coffee chain in the countries of the Asia-pacific region. Let us focus on the Singapore coffee retail industry, where the country is free trade partner of Australia.
The above figure-1 demonstrates that the habit of drinking coffee is growing in leaps and bounds over years
The above Figure 2 demonstrate that the compound annual growth rate was 3.5% for the period 2006-2011,taking 2006 as the base year. However the coffee drinking has shown a growth of 3.2% in 2012 taking 2011 as the base. The above two figure helps us to realize the huge potentiality and growth of the Singapore brewing industry. Thus according to me sigapore is the most promising market of Asia pacific region where A&A should step in to
Singapore:
Singapore caters a stable political situation. The country has a stable government that rules strongly with an effective regulatory system. World Bank has ranked Singapore as the easiest place in the world to start, run and do business. According to World Bank an international business can set up a new business in this country wit in a matter of hours.
The country caters an innovative and highly triumphant economic system where both the market and the state play equally strong roles in the government. The county’s economy is highly business friendly. This Asian country only posses the AAA credit ratings from all three major credit rating agencies namely “Standard & Poor’s”, “Moody’s” and “Fitch”.The country’s unemployment rate is one of the lowest of the world
This country posses a unique blend of population coming from different countries. The population is a mix of Malays, Chinese, Indians and expats from other foreign countries. The country cater a multicultural lifestyle where everybody can live with harmony while following their own cultures. Any act of racism is seriously punishable in this country
The above discussion signifies that the Singapore’s political economic social and cultural environments are highly supportive for setting up international business
Market gap in coffee retail industry Singapore
The three market trends of the Singapore coffee market that can be a identified are as follows:
1. Increase in demand for premium coffee, instant coffee , fresh ground coffee pods, Coffee capsules
2. Increase in consumer consciousness regarding quality and ingredients of the coffee and health
3. Increased demand for innovative new coffee flavours that are fusion of a different type of coffees. A fusion of coffee beans can create a sophisticated taste and brand loyal customers
These trends can be considered as a market gap as though several local and international brewing chains are working to fulfill the consumer demand s following the above trends but there is still a gap as very few brewers have still managed to offer a balance between premium taste, healthy ingredients and price while serving coffee cups to the consumers (Milligan, 2010). The biggest gap lies in the segment of premium coffee that requires a regular R&D to develop good flavored coffee with a fusion of different coffee beans and other healthy ingredients with minimized use of sugar and milk. According to euro monitor report the retail sales of pod coffee machines are expected to grow at a rate of 4% CAGR (Su-Jan, Limin, & Kiang, 2012).
Analysis of trend in terms of exporting coffee products and substitutes to the proposed country (Singapore)
Financial Years | Australian Import of coffee & substitutes to Singapore(Australian Dollar) |
FY2006 | 999.788 |
FY2007 | 2140.887 |
FY2008 | 1135.754 |
FY2009 | 1329.491 |
FY2010 | 1543.14 |
FY2011 | 1091.718 |
FY2012 | 1625.994 |
FY2013 | 1789.542 |
FY2014 | 2173.998 |
FY2015 | 1696.208 |
Table-1: Australian Import of coffee & substitutes to Singapore for the period 2006-2015
The above table summarizes the trend of Australian import of coffee products and substitutes for the period of 2006-2016. On the basis of the above data following graph and trend-line has been drawn(y=61.85+12112) to find out the future export opportunities of coffee products & substitutes from Australia to Singapore.
The above graphical figure denotes that in the years 2016, 2017, 2018 then projected export demand for coffee and substitutes from Australia to Singapore will be around the marks of 1700. 1800 and 2000 & above respectively.
In Singapore there is a huge demand for coffee capsules that deliver ingredients of the coffee as per the order of the customers. The demand for coffee capsules caters the demand of speciality coffee among the consumers. Most of the indigenous brewers are not interested to follow this global trend. Thus A&A can utilize this opportunity to step in to the Singapore brewing industry.
Secondly most of the indigenous brewer is focusing on selling of instant coffee packages at a price much lower than the price of a coffee capsule. Therefore to compete with the local brewers A&A should aim to supply good quality instant coffee at a an economic price (aftinet.org.au, 2017).
There is a good online demand for “drip coffee pouches” and “speciality coffee beans” that are to be sourced from foreign countries. Very few indigenous players are operating in e-commerce coffee retail industry in Singapore .Therefore A&A can step in to this segment to utilize the marketing opportunities
Risk factors | Description of risk factors with respect to Singapore | Rating in a scale of 1to 5 in terms of acceptability of the risk factor(1 refers to minimum risk,5 refers to maximum risk) |
political stability | The country is run by a stable government and it is the 11 the politically stable nation of the world as per political stability index-2015 ranking | 1 |
corruption | The corruption is also very low in the country and it holds 7 th position in terms of corruption as per “World audit organisation” 2015 | 1 |
Financial stability | The country is financially very stable as it is the number one investment destination in Asia and the world’s easiest place to do business | 1 |
Availability of telecommunications infrastructure for the ecommerce market | The country takes the information and communication technology (ICT) vision very seriously. The underlying strategy is to transform its economy into a net-economy and that is why the country plans for large-scale investment in this sector. The country aims to develop an Information infrastructure that will remove barriers from private sector participation. Thus the country is yet to deliver a full grown infrastructure for the e-commerce industry
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regulatory requirements | Singapore’s framework and regulatory public policies are generally supportive towards foreign investors. The foreign investors are not required to enter into joint ventures or give up management control to fulfil local interests. Moreover local and foreign investors are subject to the same basic laws. However the country imposes restriction on ownership of corporations by the foreign persons | 3 |
trade barriers | The country maintains generally holds most liberal trading regimes. However the country follows some trade barriers in some specific fields such as “tiered motorcycle operator licensing system “, “Agri-Food and Veterinary”. Thus as a whole the presence of trade barriers that may affect business is minimal in the country |
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Language barriers | English is the working language of the country therefore language barrier will not affect “A&A” to operate in Singapore | 1 |
Labour shortage, increasing labour cost and declining productivity | The country is facing an acute labour shortage accompanied with rising labour cost and declining productivity | 4 |
Marketing Opportunity | How it fits with A & A strategic direction |
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| •The Strategic decision of “A&A” includes introduction of new and more profitable products and the company also aims to emerge as a global company with brand loyal customers. These strategic decisions and objective will help the company to utilized this alongside marketing opportunity |
Marketing Opportunity | Impact on Current Business Customer base |
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| If “A&A” tries to utilize this opportunity then the company now have to make huge investments to buy quality products. This intern may affect the current service quality of the business and can bring shrinkage to the current customer base |
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Marketing Opportunity | Cost Details | Estimated Cost in First Year $ |
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Increase in demand for premium coffee, instant coffee and fresh ground coffee pods, Coffee capsules Associated cost: Enhancement of infrastructural facility that entails a onetime cost around $200000
| Cost of importing premium coffee bins as per demand:$100000 Cost of installing instant coffee machines already owned :$50000 Building necessary infrastructure for coffee pods and coffee capsules:$50000 | “A&A” has taken a a go slow strategy with a three years long initiative to stabilize their financial condition. In year-1 the company focuses on installation of instant coffee machines in all their newly opened outlets in Singapore. Therefore year-1 cost:$50000 |
Increase in consumer consciousness regarding quality and ingredients of the coffee and health Associated cost:$400000(one time) | Sourcing high quality ingredients other than coffee:250000 Purchase of machineries for conditioning the taste of coffee:150000 | Year-1 objective : Partial sourcing high quality ingredients other than coffee Cost:$100000
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Increased demand for innovative new coffee flavours that are fusion of a different type of coffees. A fusion of coffee beans can create a sophisticated taste and brand loyal customers Associated cost:30000(onetime) | Sourcing mediun quality coffee beans for creating a fusion:$100000 Sourcing high quality coffee beans for creating a fusion: $200000
| Year-1 objective : Sourcing mediun quality coffee beans for creating a fusion Cost:$ 100000
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Serial No | Marketing Opportunity | Benefit details | Estimated Benefit within12 Months $ | ||||
| all of them must be inherited from Task 4.1 |
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1 | Increase in demand for premium coffee, instant coffee and fresh ground coffee pods, Coffee capsules Associated cost: Enhancement of infrastructural facility |
| $54000 | ||||
2 | Increase in consumer consciousness regarding quality and ingredients of the coffee and health |
| $262000 | ||||
3 | Increased demand for innovative new coffee flavours that are fusion of a different type of coffees. A fusion of coffee beans can create a sophisticated taste and brand loyal customers
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| $106000 | ||||
Payback time:(cumulative total cost/benefit of year -1)=1.3 years | Calculation Of ROI:
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ROI = 0.74
Competitor | Established Date and Size | Market Share (%) | Value to Customers | Strengths | Weaknesses |
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Raffles Place CBD, Jewel Coffee | Established in 2012 The outlet size in 84-square-meter space | 5 | Very demanded for consumers looking for strong coffee |
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Loysel’s Toy | Established in 2011 The outlet size in 90-square-meter space | 4 | Very demanded for consumers looking forstaple food along with strong cofee | Use freshly roasted beans in their coffee Supply seasonal wholesome food as a staple to each coffee cup Good outdoor sitting arrangement | Consumers are often forced to wait a lot after giving order Non cooperation of the staffs Lack of innovation in staple foods |
Serial No. | Market opportunity | Associated risk factors | Associated Cost | Associated benefit | ROI | Ranking |
1 | Increase in demand for premium coffee, instant coffee and fresh ground coffee pods, Coffee capsules
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| $200000 | $214000 | .07 | 1 |
2 | Increase in consumer consciousness regarding quality and ingredients of the coffee and health |
| $400000 | $420000 | .05 | 3 |
3 | Increased demand for innovative new coffee flavours that are fusion of a different type of coffees. A fusion of coffee beans can create a sophisticated taste and brand loyal customers
| Increase in R&D cost Uncertainty regarding the development of a coffee flavour that may or may not be popular | $300000 | $318000 | .06 | 2 |
Singapore caters a highly westernised multicultural environment where drinking coffee is a life style stamen. Several local and international players are operating in the coffee retail industry of the country, but still there is still shortage of those coffee suppliers who are capable to supply coffee cups as per specific demands of the consumers both online and off line
Books:
De Mooij, M. (2010). Consumer behavior and culture: Consequences forglobal marketingand advertising. Sage.
Fiske, S. T., & Taylor, S. E. (2013). Social cognition: From brains to culture. Sage.
Milligan, A. (2010). Singapore-Culture Smart!: The Essential Guide to Customs & Culture. Bravo Limited.
Schein, E. H. (2010). Organizational culture and leadership (Vol. 2). John Wiley & Sons.
Journal:
Ebbeck, M., Chan, Y. Y. Y., & Yim, H. Y. B. (2011). Encouraging a culture of research in practicing teachers in Singapore. Early childhood education journal, 39(5), 355.
Chiu, C. Y., Kwan, L. Y. Y., Li, D., Peng, L., & Peng, S. (2014). Culture and consumer behavior. Foundations and Trends® in Marketing, 7(2), 109-179.
Su-Jan, Y., Limin, H., & Kiang, H. (2012). Urban informality and everyday (night) life: a field study in Singapore. International Development Planning Review, 34(4), 369-390.
Aljunied, K. (2013, November). Coffee-shops in Colonial Singapore: Domains of Contentious Publics. In History Workshop Journal (p. dbt011). Oxford University Press.
Websites:
aftinet.org.au (2017). AFTINET | Australian Fair Trade & Investment Network. Retrieved 18 March 2017, fromhttp://aftinet.org.au/
apps.fas.usda.gov. (2017). Coffee. pdf. Retrieved 18 March 2017, from http://apps.fas.usda.gov/psdonline/circulars/coffee.pdf