Assessment Task 2- Project
Conduct environmental analysis and write a strategic plan
Submission details
Candidate’s name
Assessor’s name
Assessment site
Assessment date/s
Assessment description
Complete a value chain analysis, PEST and SWOT for your organisation, plus analyses of the potential competitors and allies supplied in the case study and Write a strategic plan, including consideration of resource implications, and then circulate to stakeholders. After endorsement from the Board, communicate the plan to employees and describe any implications for their role in the organisation.
Performance objective
In this assessment, you are required to complete analyses of the organisational environment to develop an understanding of potential competitors and allies, and the associated risks and benefits and to develop and document a strategic plan for the organisation based on the research you have conducted. You will also need to communicate the strategic plan to key stakeholders in the organisation.
Assessment context
Simulated work environment. This assessment will be conducted within the training facility in the specific training room allocated for the trainee/s during the training sessions planned for assessment using simulated workplace scenario with the access to materials and equipment facilitated by your assessor.
Required resources
1. Assessment task 2, assessment instructions and case scenario in Appendix
2. Computer with Internet access and word-process software (MS Word)
3. Workspace, table, chair and stationery
Assessment instructions
1. Review the case scenario provided in Appendix 1 to undertake the project of strategic planning.
2. This task requires you to meet with your manager (Assessor) and other stakeholders. Form the individuals as specific roles to role-play as agreed by your assessor.
3. Complete the following assessment task activities during the allowed assessment date/s and time/s.
4. The assessment task is due on the date specified by your assessor. Any variations to this arrangement must be approved in writing by your assessor.
5. See the specifications above for details of submission requirements. Time allowed for the assessment task is 4 hours.
Your task
For the provided case study, you are required to complete the following activities for the organisation:
1. Conduct PEST analysis (including a review of legislation impacting on MacVille) and SWOT analysis (including an evaluation of the value-chain).
2. Using the case study, review competitors/allies to MacVille, as described in the case study, and identify and describe existing and potential competitors/allies, then summarise the strengths and weaknesses of each.
3. Develop a separate summary statement for each potential ally for a co-operative venture that describes their alignment with MacVille’s vision, mission, values and attributes, as identified on the tender document.
4. Once you have developed these materials, you need to meet with your supervisor (your assessor) to discuss and confirm the analyses you have completed, together with the summary of potential co-operative venture allies. Take notes in the meeting with your supervisor and make any changes as suggested by them, before submitting your final version. Note: You need to retain your analysis of the organisation, competitors and allies for reference and use in Assessment Task 3.
5. Following on from above analysis of the organisation, and competitors and allies formulate strategic objectives for the organisation (based on the Board minutes). For each objective, develop and describe strategies that you think could be used to meet the objective in the future.
6. For the strategies described, you need to:
a. develop a prioritised list of strategies
b. describe a timeframe for each to be completed
c. assign responsible parties to each strategy
d. assign measurable performance indicators to individual strategies.
7. When you have completed your draft strategic plan, you need to make an appointment to meet with the CEO of your organisation (your assessor) to discuss your plan. They will gain endorsement (assumption) from the Board for the plan, and return it to you with any required amendments. After you have received the endorsed plan from the Board, you need to:
a. Develop briefing materials (dot-point descriptors) for the identified responsible parties, outlining the requirements of their role in achieving the relevant strategy.
b. Develop a cover statement/letter to be sent out with the strategic plan that includes:
o a brief overview of key objectives o a description of the research and process used to develop the plan.
Specifications
You must provide:
1. A completed set of analyses (PEST and SWOT).
2. A review of existing and potential competitors and allies.
3. A review of potential allies and a statement of their alignment with organisational values (as described in Assessment Task 1) and tender requirements.
4. Summary notes from the meeting with your supervisor.
5. A completed draft strategic plan based on your analysis, with organisational objectives, and strategies for enacting and achieving the objectives.
6. Summary notes from your meeting with the organisation’s CEO (your assessor).
7. Briefing and information materials about the revised strategic plan for staff and responsible parties.
Your assessor will be looking for evidence of the ability to:
• consult and communicate effectively with relevant stakeholders to:
• confirm or revise the organisation’s mission, vision and values
• validate findings of research and analysis
• get input to and endorsement of strategic plans
• brief relevant parties about the plan
• analyse organisation’s internal and external environment to formulate strategic plans including:
• background and research relevant to the plan
• legislation, regulations and codes of practice, including for intellectual property
• objectives, strategies and priorities
• roles and responsibilities
• performance indicators
• timeframes
• consideration of co-operative ventures
• cost-benefit and risk analysis
• seek advice from appropriate experts wherever necessary
• monitor and evaluate the implementation of the plan and make refinements as appropriate
• review effectiveness of planning processes and identify opportunities for improvement.
Appendix
Case study
Having completed MacVille’s review of the vision, mission and values, you should then consider the environmental factors that could impact on MacVille’s goals and objectives. To help you with this assessment, you are provided with an industry consultant’s report that contains a recent and comprehensive review of the industry and general operating environment.
Industry consultant’s report
You have noted the following points from the report:
8. New commercial espresso machines are being developed that use 30% less energy to run, with an innovative and more efficient heat exchanger.
9. Planned changes in trade where all tariffs on imported goods, including espresso coffee machines, will be removed in line with the Government’s free trade policy.
10. The development of the home consumer market for consumer espresso machines is experiencing high growth.
11. The lifestyle trend towards eating out more frequently as the population ages and becomes more affluent.
12. The prediction of a steady population growth rate for Australia from 22 million in 2010 to 36 million in 2050.
13. The prediction of a strengthening Australian dollar against all our major trading partners over the next few years is also a concern.
14. The prediction of higher-than-expected growth in the economy, as a result of a resources boom.
15. The strong possibility of a carbon tax being introduced on all energy intensive products used in a commercial enterprise.
Senior manager’s meeting
At a meeting with the CEO and other senior managers, the following points were noted in regard to the operations of MacVille. In response to your question about how effectively MacVille adds value to its products and services, the following responses were agreed by all.
16. Inbound logistics is a problem, due to the lack of experienced personnel in importation and customs operations. The lack of solutions from Human Resources Management has meant that delivery timelines are sometimes delayed because the proper procedure was not followed.
17. The operations of MacVille is an area of strong value-add, with the state of the art Management Information System (MIS) forming part of MacVille’s infrastructure. The MIS has allowed for sound corporate/strategic planning, along with strong internal controls in accounting and finance.
18. Outbound logistics is an area that could be improved. Currently, MacVille relies on a three year contract with a delivery firm to deliver its goods to customers. Sometimes there is a delay in getting the appropriate vehicle to deliver the espresso coffee machines, which is causing some issues with customers. The contract delivery firm seems to be struggling to deliver the promised quality with their fast expansion.
19. All managers agreed that marketing and sales is a strong point for MacVille. The marketing communications and promotions mix seems to be working well, particularly with the social marketing that MacVille has introduced in the past year. Technology developments are helping MacVille to reduce costs, yet expand the message via internet marketing activities.
20. Service is another strong point for MacVille, which enjoys a good reputation in this field. The installation, after-sales service, complaints handling and training all get top marks from our customers. Some of MacVille’s procurement policy has helped in this regard, with MacVille outsourcing work where it cannot meet customer demand. The policy of putting the customer first and guaranteeing service calls within 24 hours has been a key reason for the increased sales.
In a brainstorm with the CEO and senior managers, the following points were noted. When asking about the potential for opportunities, threats and competitors, the consensus was:
21. Moving into the new Sydney market, where the bulk of espresso machines are sold each year, and from which a major (but ineffective) competitor has withdrawn.
22. Other opportunities could be found in strategic alliances with coffee bean suppliers, where market penetration could easily be achieved and costs of advertising and service could be shared.
23. There was also concern about the raising Australian dollar having a severe long-term impact on tourism, which was a major category buyer of espresso machines. Raising interest rates that are predicted for the coming years could impact negatively on the disposable income of coffeedrinking patrons.
24. The concerns of the group were centred on a global corporation Nufix Inc. shifting from instant coffee into the espresso bean and machine market. The resources they would have at their disposal in marketing, finance and human resources could be a serious threat to MacVille’s plans. However, they would still struggle to gain a foothold in a market that already has strong supplier/buyer allegiances, with most stretching over many years. Global players like Nufix Inc. have difficulty being adaptable to the needs of niche market buyers.
25. Another competitor of note was BeanEx, a large coffee bean supplier that had recently started importing espresso machines for their customers. There was talk of them selling the espresso machines as wholesalers. They certainly had easy access to markets with their coffee bean trade, but they had no established service arm to help wholesale clients maintain the machines that they purchased.
26. MacVille has been keen to pursue strategic alliances as part of its strategy to achieve its objectives. It called for tenders from interested parties, who were asked to complete a tender application form that provided information relating to the tender requirements. Some notes have been included by senior managers who assessed some of the information.
Tender submissions
Three submissions are attached to this case study.
Business name – Home Espresso Trades
Description of business (include vision, etc.) – Selling consumer home espresso machines to the home market, only in Sydney, and incorporating other digital home entertainment products.
Description of joint venture – Shared space in four trade shows per year.
Venture: Strengths and weaknesses – Strength: covers the consumer market for espresso machines (that compliments the commercial espresso machines) to make a full range offer to clients. Weakness: in working with a strategic partner who is not solely focused on the hospitality industry.
Venture: risks –
1. Partner not fulfilling their financial commitment.
2. Association with a non-industry partner may have a negative effect on our customer base.
3. Partner access to MacVille’s trade secrets.
Venture: Cost-benefit analysis – Costs of the shows is $2,500 each. Four shows costing $10,000, selling 10 machines per show at $500. Profit for each would see a profit of $10,000 for the year and a breakeven after two shows.
Venture: Financials –
Home Espresso Traders
Statement of Financial Position
as at 31 December 201X
ASSETS
Current Assets
Cash at bank 10,000
Accounts Receivable 15,000
Stock 8,000
Prepaid expenses 2,500
Total Current Assets 35,500
Non Current Assets
Buildings 0
Less Accumulated depreciation 0
Equipment 356,000
Less Accumulated depreciation (24,998)
Goodwill 10,000
Total Non Current Assets 341,002
Total Assets 376,502
Represented by
LIABILITIES
Accounts Payable 25,000
Long term loan 251,500
Total Liabilities 276,500
OWNERS EQUITY
Initial Capital 2
Current earnings 100,000
Total Owners Equity 100,002
Venture: Trend analysis – Sales
2007 – $1.0m
2008 – $1.3m
2009 – $1.5m
2010 – $1.6m
2011 – $1.6m
Able to provide access to due diligence materials?
? Copies of other strategic alliance agreements? YES ? NO •
? Statement of Financial Position from last tax return? YES ? NO •
? Full personal contact details of all directors? YES ? NO •
? Supporting data for trends, and cost benefit analysis? YES ? NO •
Business name – Ambrosia Coffee Roast
Description of business (include vision, etc) – Sell all grades of coffee bean to supermarkets and hospitality outlets around Australia.
Description of joint venture – Share in the cost of outdoor advertising for cafes and restaurants, with shared branding of umbrellas and barriers.
Venture: Strengths and weaknesses – Supplier is committed to the coffee bean industry, with some sharing of the client base. Product image is not quality but more commodity-based. Venture: Risks –
1. Risks with poor brand association.
2. Long-term commitment in signage.
Venture: Cost-benefit analysis – 50 cafes per year, at $200 per cafe cost for each partner. 50 machines sold at $500 profit is $15,000 profit return for the year. Break-even after 20 cafes.
Venture: Financials – Not available.
Venture: Trend analysis –
2007 – $3.2m
2008 – $3.0m
2009 – $2.9m
2010 – $3.0m
2011 – $3.3m
Able to provide access to due diligence materials?
? Copies of other strategic alliance agreements? YES ? NO •
? Statement of Financial Position from last tax return? YES • NO ?
? Full personal contact details of all directors? YES • NO ?
? Supporting data for trends, and cost benefit analysis? YES ? NO •
Business name – Java Estate
Description of business (include vision, etc) – To sell quality Arabica roasted coffee beans to all states of Australia.
Description of joint venture – Java Estate provides MacVille espresso machines to client for no-charge. Java Estate pays MacVille cost price for the delivery and installation of the machine, then pays the remainder of the purchase price on a 12 month repayment program.
Venture: Strengths and weaknesses – Australia wide partner – 100% committed to hospitality and coffee bean market. Other coffee bean suppliers may not recommend MacVille machines with this strong strategic alliance.
Venture: Risks – Concern over the amount of money outstanding.
Venture: Cost-benefit analysis – Potentially 200 machines installed in the first year. Interest costs $40,000 p.a. profit $100,000. Break-even after 80 machines sold.
Venture: Financials –
Java Estate
Statement of Financial Position
as at 31 December 201X
ASSETS
Current Assets
Cash at bank 78,000
Accounts Receivable 123,000
Stock 100,000
Prepaid expenses 12,000
Total Current Assets 313,000
Non Current Assets
Buildings 240,000
Less Accumulated depreciation (123,000)
Equipment 230,000
Less Accumulated depreciation (78,000)
Goodwill 39,500
Total Non Current Assets 308,500
Total Assets 621,500
Represented by
LIABILITIES
Accounts Payable 25,500
Long term loan 151,000
Total Liabilities 176,500
OWNERS EQUITY
Initial Capital 100,000
Current earnings 345,000
Total Owners Equity 445,000
Venture: Trend analysis –
2007 – $8.2m
2008 – $9.1m
2009 – $12.2m
2010 – $14.6m
2011 – $16.3m
Able to provide access to due diligence materials?
? Copies of other strategic alliance agreements? YES ? NO •
? Statement of Financial Position from last tax return? YES ? NO •
? Full personal contact details of all directors? YES ? NO •
? Supporting data for trends, and cost benefit analysis? YES ? NO •
You are provided with the minutes of the board meeting, where the CEO spoke about the strategic objectives that will form part of the strategic plan.
MacVille Board Meeting Minutes: July, 8 201X
6:00pm Board Room, Brisbane
Board members:
Present: Alan Jones (Chair), Jenny Ng, Olga Hartwick (Secretary), John Brennen, James Laird, George Saldais.
Absent:
Quorum present? Yes.
Others present:
CEO: Patricia Mees.
Proceedings:
Meeting called to order at 7.00 pm by Chair, Alan Jones, who explained that this was a special meeting of the Board to hear the presentation of the strategic plan by the CEO Patricia Mees.
(Last month's) meeting minutes were amended and approved.
Overview of the strategic plan: Patricia Mees
? Patricia Mees gave a presentation concerning the objectives that would form part of the strategic plan for the next five years.
? Objective 1 – To sell and service MacVille espresso coffee machines in every state of Australia. This was a top priority that would involve the acceptance of Java Estates tender. This was an important alliance and one that should be managed at the highest level. With the Sydney warehouse now established, it was important to look for other warehouse opportunities in high volume states. The other states could be managed with an agent’s network and by outsourcing the maintenance.
? Objective 2 – To increase profit margins by 5% from our 2010 benchmark in the next five years. This should occur naturally, with increased sales allowing for better price negotiations with suppliers, and getting all departments to make optimum use of their staff.
? Objective 3 – To establish the MacVille brand recognition in key markets in the next five years, mostly via new technologies but also co-branding with our strategic partner. This is also a high priority if the successful rollout is to be achieved.
? Objective 4 – To reduce our waste and energy use by 10% from our 2010 benchmark within the next five years. Education programs and incentive rewards for innovations in this area should see the organisation achieve its objectives.
Meeting adjourned at 9.30 pm.
Minutes submitted by Secretary, Olga Hartwick.
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