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Over the years, business growth and stability in Melbourne has been a difficult task, especially for the coffee businesses. This analogy is proven recent research which suggests that only one-tenth of 1 per cent of coffee shop businesses in Melbourne Australia have managed to hit the $250 million in annual revenue mark. Narrowing down this revelation one can note that mere 0.036 per cent hit the $1 million mark in annual sales (Attractiveness of Coffee and the Elements for Building an Attractive Coffee Shop, 2012). Going by these statistics one can, therefore, claim that it is a common trend of coffee shop business in Melbourne to struggle due to the market saturation.

The aim of this report is to review the current opportunities, strength and weaknesses in Australian coffee shop market. This report will also compare the competition in this market. The report will also cover the business summary. The aim of this report is also to cover the company’s product overview and how it can be strategically fitted for the current Australian market (Weon-Ho Yi et al., 2012). The report will also review the environmental market in Australia and the effect it has on the coffee shop businesses. It will also analyse the competitive analysis of the coffee shop business in Australia and the present niches to take up in order to have a competitive advantage.


The research held was applied with respect to the coffee shop business in respect to the Australian market. A number of previous academic researchers on the Australian fast food industry were reviewed in this report. A qualitative research was also reviewed in order to come up with concrete facts concerning the Australian coffee shop market. The outcomes of these qualitative researches were also reviewed in this report. The report also involved review of other reports on the global coffee shop store market which was used to compare with the current situation analysis in Australia.

Market analysis

The coffee shop business market in Melbourne Australia over the years has a strong track record in the acquiring and integrating business. This attribute of this market has therefore resulted in competition in the market due to the saturated market. The coffee shop market in Melbourne, Australia has recently been boosted by the buoyant trends in household discretionary income, growing number of office space in Melbourne and commercial building investment in Australia (Porter, 2015). This, therefore, it boosts for the transition of the coffee shop market in Melbourne, Australia. The undersupply of commercial office space the increasing prices of office space have contributed to more offices coming up, therefore, creating a huge demand for the takeaway coffee in the Australian market.

On the other hand, the decreases in the global coffee prices have also led to more coffee shops opening in the Melbourne, Australia market. The Australian coffee shop market is claimed to grow by a staggering 6.7 % in the coming two years this, therefore, means that this market is conducive for the sustainability of Coffee and Sweet Company in its early years in a new market which is crucial for the company’s development.

Company Summary

Coffee and Sweet shop is an upcoming coffee shop in Melbourne, Australia. On a larger scale, on the basis of market capitalisation, Coffee and Sweet Company is considered to be among the fastest growing coffee shops in Melbourne, Australia. The company has also been ranked as the leading, fastest growing coffee joint in Australia (PEKAREK, 2009). However, the report also revealed that despite this coffee shop enjoying tremendous popularity in Melbourne, it is also facing a lot of completion in this market due to the market saturation. The company mainly offers coffee and other beverages; it also offers takeaway services and coffee catering services.

Product Overview

My product is coffee which is stimulant drink which can be served in various ways. In this case, the business offers a variety of coffee. This means that the customers have the preference to order various types of coffee. This product is a plus since it is a unique product with its competition being only the locally prepared coffee which lags behind in terms of quality. Choosing this product will ensure the business creates ease in availability of various types of coffee from Cappuccino, Arabic coffee and espresso for the target market giving the product a competitive edge compared to other coffee brands which are not quite diverse. On the other hand, Coffee and Sweet coffee shop focus on the product’s quality since it will foster the products growing reputation (Cho, 2014). I also focus on the concentrations of milk cream, coffee, water and other additives which will enable us to strike a great balance between the concentrations of ingredients used in the preparation of the product, therefore boosting the products quality.

Environmental analysis

The coffee shop market in melbourne, Australia covers a consumption pattern that is growing tremendously. This is attributed to the current growth of Melbourne which is becoming a metropolitan town. However, the market is saturated due to the entry of many players. This is further attribute to the current low global coffee prices (Cho, 2014). On the other hand, the Australian coffee shop market environment is also characterised by an increasing number in business and office space in Melbourne which on the other hand is an increase in potential customers to the coffee shop chains located in this area.

Customer analysis

The market for Coffee and Sweet product is working class population in Melbourne the company’s target market also entails; students, staffs and visitors. Therefore, the company needs to exploit this market by studying different scheduled of my target market, for instance, it should note that the students often do not have breakfast in their hostels or home most of them take their breakfast in the coffee shops. Coffee and Sweet brand should ensure that its coffee product is ready by this time for me sell to these students, and the working class community in Melbourne. In line with this it should also note that the working class community like to carry their coffee with them to their workplace in order to save time. This, therefore, calls for quick customer services where I should ensure that this target group is quickly served ensuring that they spend the less possible time ordering and getting it.

Competitors Analysis

The Australian, coffee shop market is characterised by a proximate of 57 coffee shops with 29 being located in Melbourne. Among these coffee shops three are evidently competitors of coffee and Sweet coffee shop. These competitors include; Starbucks, Tim Horton and McDonalds. They offer the similar products and service as those of Coffee and Sweet and they are both coffee shop brands that specialise with coffee and some have a global presence. These coffee shops have annual revenue $1million similar to coffee and Sweet. On the other hand, some of the other competitors of Coffee and Sweet include Dunkin’ Donuts, convenience stores, gas stations and fast food restaurants in Melbourne but with effective strategies coffee and sweet shop will grow exponentially and expand to other cities in Australia, this is in line with their strategic vision (Weon-Ho Yi et al., 2012).

SWOT analysis




Existing sales networks due to its reputation in Australia

A competitive market due to saturation

Wide product markets for the company

High tax charges

High profitability records in its sales

Strict tax structure

Growing product demand

Increasing labour cost

Good reputation due to exemplary customer care services

Struggle for market establishment due to existence of bigger brands

Current fast growth and development of Melbourne

Stiff market competition

Product diversity and flexibility

Stagnant development and growth due to the market saturation

Increasing use of coffee as an essential breakfast beverage

Unpredictability of global coffee prices


Attractiveness of Coffee and the Elements for Building an Attractive Coffee Shop. 2012. JCIT, 720, pp.47-55.

Cho, M. 2014. Segmentation of Coffee Shop Customers based on Organic Coffee Choice Motives. easdl, 246.

PEKAREK, A. 2009. WHY BECOME A SHOP STEWARD? EVIDENCE FROM AUSTRALIAN UNIONS. Labour & Industry: a journal of the social and economic relations of work, 193, pp.157-188.

Porter, S. 2015. Coffee Shop. Annals of Internal Medicine, 1638, p.652.

Weon-Ho Yi, 이상윤, 윤명길, and 김수옥, 2012. Study on the Effects of Shop Choice Properties on Brand Attitudes: Focus on Six Major Coffee Shop Brands. journalofdistributionscience, 103, pp.51-61.