Australian Coffee Club - Environmental Analysis - Case Study Example

Name Course Lecturer Date THE COFFEE CLUB Introduction and Company description The Coffee Club is a chain of cafes which first made a debut in Brisbane in 1989. The company was the idea of Emmanuel Kokoris and Emmanuel Drivas who, out of experience, noted lack of a coffee shop that provided excellent coffee in the city. Their original idea was to set up a place that would provide a relaxed meeting place that was stylish, sophisticated yet affordable. In other words, their plan was to meet untapped needs in the Australian hospitality industry. With the assistance of a highly collaborative, innovative and committed management, The Coffee Club has grown exponentially in addition to being the people’s favorite brand that continues to overly meet the needs of Australians year after year. The Coffee Club is the Australian largest home grown café group, selling over 40 million cups of coffee every year. The company has employed over 6,000 employees in Australia alone. The Coffee Club has expanded to other nations and now operates total of 230 outlets globally. The outlets are however, concentrated in Asia, Australia and New Zealand headquartered in West End, Queensland. The coffee house offers a range of beverages including Mocha, tea, hot and cold drinks, flavored beans and Espresso which are usually served along with snacks such as pizza, sandwiches, muffins, and pasta among others. The club offers two types of experiences: The restaurant and the café bar. The restaurant offers visitors the convenience of a la carte dining, dedicated chefs and extended trading hours. Besides that, the restaurant offers an extensive range of mouthwatering breakfast, lunch and dinner in addition to the excellent coffee. The café on the other hand, provides a range of light cakes, beverages, gourmet sandwiches and meals. The company’s vision is to become the world’s leader in retail in franchising, coffee and retail food. Its mission is to provide excellent coffee, good food and exceptional services as well as a relaxed meeting point enriched with contemporary lifestyle. The Coffee Club focuses on both internal and external customers. One of its core values is to ensure that all processes and operations are directed towards enhancing overall customer satisfaction which is mainly through productive and positive contact. The company also believes in teamwork so as to achieve its vision. Part of its core values is to build positive relationships within the workplace where every employee is satisfied with the work environment. The company’s franchising group explicitly states that “any business that is serious about creating a workforce that is engaged and productive must create an environment in which the people in their business can flourish”. As part of building a highly motivated and empowered workforce that is able to provide the best customer service possible, Coffee Club ensures that all its corporate and franchise employees are well trained. The company, through the ‘People Team’, has opened up learning academies such as Great Service academy, Excellent Coffee academy and Good Food academy. Marketing is another factor that has contributed to Coffee Club’s success. The company regards marketing as the backbone of other departments that enables it to develop and produce products and services that meet the needs of customers. The marketing team conducts a thorough marketing study to determine product needs as well as analyze markets. The company believes in the power of networks as a tool for negotiating and securing new sites for The Coffee Club stores. Environmental analysis Political and legal analysis The commitment and effectiveness of Malaysian government in program development and implementation is quite outstanding. There are countless examples of increasing healthcare, poverty and inequality reduction and infrastructure development programs that have been successful established in Malaysia. Effectiveness in addressing these social issues has earned politicians public trust. In order to further enhance effectiveness, politicians have developed transparency law which has led to decentralization of economic policymaking. This has in turn accelerated the inception and implementation of economic development. Even with an excellent political institution, Malaysia has notable fault lines in civil rights issues. It has been ranked as the world’s worst in terms of freedom of the press and ‘voice and accountability’. Freedom of expression is also severely trimmed with the government using restrictive rules such as Communication and Multimedia Act 1998 (CMA 1998) to abolish any form of critical opinion. Drawing from its British colonialists, Malaysia has managed to maintain an extremely efficient legal system. However, the country still struggles with corruption with 5 people out 10 being involved in a corruption deal. Although corruption in bleak assessment of business specific corruption reduced significantly in 2006, it has since risen making a peak in 2010. Corruption is particularly prevalent in the negotiation of contracts. Bribes are paid to government officials for loan transactions, for police protection and to speed up trade licenses (Belai, Boakye and Vrakas, p. 45). Before commencement of operations in Malaysia , there are certain legal requirements that businesses have to comply with such as licenses. Economic analysis Malaysia is quite dynamic demonstrating constant growth over the years. Initially, the country was been rated middle-income country and only a producer of raw materials. Nevertheless, the country has recently turned into a multi-sector economy spurred by capital-intensive, knowledge-based and high technology. Making a recommendable economic effort, the country was ranked 7th place out of 59 economies of the world up from 12th position in 2007. Additionally, Malaysia is among the 20 largest trading nations worldwide toping Switzerland, United Kingdom, Australia, Canada, Sweden and Taiwan. The Institute for Management Development (IMD) has consecutively ranked Malaysia among the top five most competitive nations in the Asia-Pacific region. Moreover, Malaysia is position 21 among all the trading nations. Malaysia is strategically located; right at the heart the South-East Asia. It is therefore, a cost-competitive location for investors who may intend to venture into both international and regional markets via offshore operations. Furthermore, the country has a market-oriented economy that is manned by the government through pro-business policies. In 2010, for instance, the government launched the Economic Transformation Programme (ETP) whose purpose is to identify key economic areas that have the potential to drive the economy of Malaysia. The programme is expected to raise the economy to US$523 billion by 2020; becoming a high income nation; the threshold set by the World Bank. The government is also working tirelessly to raise the private sector from its contribution of 58% to 65% in employment. With this powerful economy and a promising future, The Coffee Club will indeed thrive in Malaysia (Market Watch 2012, p. 1). Cultural analysis Malaysian multiracial and multicultural background creates opportunities and greater market segmentations for products and services (Gervase & Bushe, p. 214). One of its distinctive features is rich diversity of these cultures. Its heritage derives from racial mix of the world's oldest civilizations including the Malay, Indian and Chinese. Malay culture has the dominant status as Malays are the dominant race. Other cultures however, are practiced freely with free intermingling of many different cultures. The multi-cultural and multi-religious nature of local populations results in abundance of cultural festivities in the whole year. History and culture of Malaysians, is diverse as there are various beliefs, customs and languages. This explains their cultural attitudes and values in workplaces. Face, fatalism and hierarchy are explained by such cultures. This explains the consumption characteristics in Malaysian market. Some of the contributing factors to growth of beverages products market are selection of better product, after sale services offer and lower price. Domestic demand is promoted by indigenous strong appetites for drinking products. The cultural orientation of Malay, Chinese, and Indians consumers and has been influenced by face consumption where distinctiveness, conformity and other orientation are its unique characteristics. Cultural relations and networks influence an individual purchase of products and this is particularly noted among Indians and Chinese consumers. Product price and brands are prominent aspect they also relate with and are equally in consideration of prestige involved with a product. All these significantly contribute to domestic demand and purchases of food and beverage products. Important phenomena derived from value, social codes, and cultural orientation characterizes the consumption of products. Consumer behavior results from motivations from self and social expression. This develops the consumer’s inner value and external status. Culture perspective also promotes the attitudes, norms and behaviors similarities and differences among contemporary consumers. Technological analysis Technology has greatly contributed to Malaysia’s food industry immunity against the ongoing slippery global economy. This has been attributed by the government’s emphasis and support towards high technology and innovation. In 1997, for instance, the country’s GDP increased by 70% as a result of extensive technology use in manufacturing industries (Adis and Razli, p. 39). Technology is widely used in recycling of waste from food companies for example noise control technologies and recovery of heavy metals from waste waters. Even so, research has indicated that technology has not been fully exploited in the food industry; a factor that has caused derailed growth in comparison with other industries. The study conducted by Ahmed (p. 51) showed that the industry adopts low technologies in the manufacturing processes and applies more of manual handling of materials. To acquire a competitive edge in terms of technology, The Coffee Club ought to use modernized technologies so as to improve the quality of products. Environmental analysis Malaysia has a green and a protected environment. Environment legislation in Malaysia is regulated and enforced by The 1974 Environmental Quality Act (EQA). It provides environmental regulation framework for Malaysia (Eltayeb, et al, p. 89). The EQA framework promotes the issuance of licenses and prescribes the premises to be regulated. The Minister, with consultation from Environment Quality Council, prescribes occupation and use of specific premises. There are wider ministry dealing with and influencing environmental issues. The main areas influenced include environmental quality, wildlife, national park and agriculture. Other areas are fisheries and marine affairs, national forest, mining, land use and mines, port operations, land development, land use planning, energy provision, indigenous people, local government sewerage services and privatization. Environmental management, awareness and action in the industrial sector in Malaysia are led by its large companies. There are several factors for this such as the rising standards towards clean air which is higher than that in the West. Second is the concern for a corporate image through managers, by policy and a response to an increased negative media coverage to those who pollutes and lastly, is to counter rising electric power tariff rates which has substantially increased and is still expected to increase more. Enforcement has done little to motivate large companies compared to the mentioned factors. However, there some negative incentives including the current market price for water (M$1.3 per cubic meter) that still exist. Competitive analysis The Malaysian café and bar sector, under the foodservice industry, has constantly experienced fast growth until 2009 during the peak of the global economic downturn. During this period many cafes and bars closed down due to sustained economic pressures while others survived through utilization of a number of innovated ideas and promotions to ensure that growth remained positive (IMB, p. 17). Malaysia has got only two types of coffee houses. First, are the restaurants which serve coffee besides other beverages and second are the imitated North America styles of coffee shops which are basically specialize in the sale of coffee. Exemplifying the second option are ‘Coffee Bean and Tea leaf’ and Starbuck. The two have positioned themselves as their clients’ third best place to relax other than home and work. They both invest heavily in providing a special and relaxed environment to customers. What makes the two companies distinct is not just the products they serve but also the environment and atmosphere which are cosmetized by exquisite setting of the store and soothing background music. Clearly, the stores provide a medium to high barrier to new entrants. Therefore, new entrants into the industry ought to consider the success factors of the two stores and adopt highly competitive products, decoration and operation styles; preferable those which represent western lifestyle. Economies of scale to competition are also paramount in entering Malaysia foodservice industry. This implies providing high quality products at affordable prices (Batcha, p.1). Works Cited; International Markets Bureau (IMB), International Markets Bureau. "Foodserive profile Malaysia." Market analysis report. 2011. 2012, Market Watch. The Malaysian Food Industry. 2011. 24 September 2012 . Adis, Azaze and Razli. "Factors affecting new product developemnt in Malaysia manufacturing industry." International bulletin of business administration, 4 (2009): 1-57. Ahmed, Elsadig. "Factors affecting trhe performance of food manufacturing industries in Malaysia." 2nd Internationla conference on business and economic research (2nd ICBER 2011) proceeding. Melaka: Multimedia university, 2011. 40-56. Batcha, Mohd. The Coffee Bean & Tea Leaf: Malaysia Industry Analysis. 2007. 24 September 2012 . Belai, Abbai, et al. "The Malaysian Palm Oil Cluster ." Final report. 2011. D, Gervase R Bushe Ph. “Sense-Making and the Problems of Learning from Experience: Barriers and Requirements for Creating Cultures of Collaboration.” Cultures (2006): Print. Eltayeb, Tarig Khidir, Suhaiza Zailani, and Walter Leal Filho. “Green business among certified companies in Malaysia towards environmental sustainability: benchmarking on the drivers, initiatives and outcomes.” International Journal of Environmental Technology and Management. Volume 12, .1 (2010): 95-125. Read More