MANAGEMENT KNOWLEDGE AND INFORMATION: ASSESSMENT 2
Present Situation of Business
The CoffeeVille is doing business in Melbourne’s Central Business District (CBD) from last four year. The company has steady market of sales. The company has opened four stores in Melbourne. But the performances of all stores are not well. The performances of third and fourth are very poor. The company has suffering by low sales record. The research data of CoffeeVille is indicating that the sales margins have declined gradually in last three months. Numbers of visiting customers have reduced. Third and Fourth stores are primarily responsible for the low profit margins of CoffeeVille. Owners Rufus and Emma Belcastran have involved highly running the fourth store. Due to this the owner was unable to concentrate on the business of first and second store. These stores have capability to generate more revenues. Based on the given data, it is clear that CoffeeVille should work on performance and motivational work in all for stores.
The business environment of CoffeeVille can be divided into two parts. First is internal and second is external. The internal business situation of the company is stable. According to research report, some external factors are responsible for marginal losses. Expenses for wages have increased up to fifteen percentage employing experienced and trained staffs. Company is facing scarcity for skilled employees. On the other side, property rents have risen from ten to eighteen percentages in last twelve years. There are also chances to increase more rents in early 2016. Price of coffee beans has risen in recent years. There is still possibility to get price higher of coffee beans. It has happened due low production of Coffee beans across the world. This research material has identified that in last twelve months, company increased price of all coffee items. Even, price of red meat has increased up to twenty percent in last six months. It kept direct impact on price hike of food products. This is one of major reason that customers have not accepted this frequent price hike in all food, beverages and Coffee items.
Business Performance Analysis (Based on Data & Information)
Following CoffeeVille’s Business Data and Information, It has come into the business report that in first six month of 2015 sales have downed in all categories of items and in stores also. Overall food sales have downed by ten percentages, beverages twelve percentage, catering seventeen percentages. Price of raw material has increased and on the other side expenses have also risen. In the first half of the financial year 2015, profit margin of the company have downed by nineteen percentages.
CoffeeVille had opened first shop in the year of 2009. In that period of time company had responsibility to pay wages by 34.9 percentages of total expenses and in the year 2015, payable wages to the employees rose by 45.3 percentages.
On July 2014, CoffeeVille had opened large store in CBD. Here seating capacity is high. But, still the store is unable to perform according to forecasted level. Marketing budget and owner Emma’s effort is oriented only on fourth store. Others marketing and performance have downed only for not proper observation by the management. All these issues have kept negative impact on the overall performances CoffeeVille.
Research Data & Information Analysis
Statistical data and information related to Melbourne’s Central Business District (CBD) population and particular group are based on several topics. In the year of 2013, Commercial property rent on per square meter in Melbourne CBD was 7,000 Australian Dollar (AUD). In the year 2014 it became 7,750 AUD. In 2015 it became 8,250 rose by 6.4 percentage and in 2016 it is 8,800 AUD rose by 6.6 percentage. Commercial property vacancy rate in 2013 was 8.2 percentages. In 2014 it became 8.5 percentages, in 2015 it was 9.1 percentages and in 2016 it became 9.5 percentages. In this perspective this research work can clearly identifying that CoffeeVille facing so many challenges from various sectors to maintain business. The operational costs of the company are constantly growing high. Property rents have increased in last 4 years. However, property vacancy is available and increased by 9.5 percentages in CBD in 2016. Means, company have options to find suitable property according to budget. Whereas there is little bit relief from Banks. According to report by Reserve Bank of Australia, interest rate in February 2014 was 2.5 percent which is same in December 2015.
The CoffeeVille has two major problems in respect of store management. The company is suffering by low margin of profits. The rate of expenditure of operational costs is also very high. Following research report of business performance of CoffeeVille, external issues are responsible for losses. Expenses for high salary Payment for the skilled labors are one of the major of cause of high expenses. The property rent is also increasing every year in Central Business District (CBD) of Melbourne. It is one of the big concerns to CoffeVille.
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