Report:Scenario Essay Example

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Managing People and Organisations (BMGT001)

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Title of Assignment

Individual Research Report

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report:Scenario 1

Assessment 2

Semester 1, 2014

Individual Research Report


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Scenario analysis


Sally Smith’s cafe is located in Sydney. Her independent-small cafe serves the local inner-city area whose ain customers are an increasing number of female office workers, students and tourists. The cafe’s main menu comprises of European and Middle Eastern dishes as well as a variety of coffee, tea and chilled beverages. The cafe has a small work force comprising of a cook two waitresses, kitchen and Sally herself at the counter. A large food court food court that has been opened across Sally’s cafe poses a challenge to Sally’s business in terms of competition. The food court sells American and Australian fast foods at lower prices. Lack of frill-operations and lower prices are the factors attracting business away from Sally’s cafe. Sally cafe has started making loses and she feels that she may be kicked out of the market. This paper aims to conduct some market research and industry analysis to assist her develop a plan and suggest strategies that she may implement to help her business overcome the competition and resume to making profits. To achieve this, the paper will conduct a SWOT analysis and an industry analysis (using Porters Five Forces). The report will comprise of findings and analysis to the SWOT analysis and the industry analysis, plans and ways to help Sally’s business gain competitive advantage and recommend strategies to help her business overcome the competition based on the analysis.

SWOT analysis



  • Sally’s café is a reputable business with an established clientele.

  • The business is located in a central place in Sydney close to most of its clients

  • Demographics of the customers indicate that most of them are young people who can be loyal clients if well—satisfied

  • Sally can diversify the type of dishes offered in the café to include fast food as well as American dishes

  • With already established clients, Sally needs to hire more staff in order to improve service delivery

  • Sally should as well try online business where clients can order food and it is delivered to their workplace

  • The café serves food for customers from different parts of Europe and Middle East


  • Being a sole proprietorship, more investment to hire more staff and diversify the dishes can be a challenge

  • The small size of the business may not handle many customers in a single moment

  • Steady competition from the newly opened food court

  • Sydney in an expensive city implying that lowering the cost of foods might affect profitability

Industry analysis

. Russell 2008 p.42)Porter’s five models that is used in industry analysis assumes that there are five factors that determine the competitive power in a business scenario (

  • . It is assumed that the fewer choice of suppliers and the high need for supplier help, the more power for the supplier will be (Surhone, Timpledon, & Marseken 2010, p.59). This implies the Sally needs to have many suppliers so that she can evaluate them and switch the costs easily so that she may end up have the best supplier who will supplier her with products at her desired prices. Silk 2006, p.16: What is the impact of the suppliers in driving prices? This is determined by the number of suppliers of each of the products, their strength, quality, control and cost switching from one product to the other (Bargaining power of the supplier

  • : What makes it is for the customers to drive the prices low is a key question to be asked (Kotler 2009, p.61). This is determined by the number of customers and their importance to the business, their costs of switching to alternative business or service (Pride 2011, p.83). Dealing with few and powerful buyers makes it easy for them to dictate the prices (Richter & Pal 2009, p.92). Sally’s case is can be change because her business already has many customers only that they have started switching for alternative products and services. At the moment, Sally should work on how to retain the existing customers while she also aims to get many more customers. Bargaining power of the buyer

  • : This is determined by the ability of the customers to access other products or services that a business offers (Hiam 2009, p.72). Switching to substitute goods or services can be influenced by factors such as prices and quality of services (Kotler 2008, p.63). Sally should know why her customers have opted to switch to the new food court, it because her prices are high? Or is it because her services are poor? Threats of substitute products

  • : How many competitors and what are they capable of doing? If they are many competitors and they offer similar products and services, then a business has little power to control the situation since the buyers and suppliers may switch to competitors if they are not impressed by the services (Bohm 2009, p.61). If there are no competitors, a business enjoys full strength in the market (Fine 2009, p.9). Sally on have one competitor at the moment, this creates an opportunity for het business to work hard and offer equal competition.Competitive rivalry

  • Profitability and sustainability of a business is affected by the ability of new people entering a market (Baker & Hart 2008, p.6). More entrants are expected if the economy of scale is low and the cost of entering is low; the new entrants weaken a business growth strategy (Berliner 2000, p.110. But if there are strong and durable barriers, then a business enjoy a favourable environment (Bosijevac & Burrow 2009, p.41). Is sally able to satisfy the existing customers? If she is not, then she creates an opportunity for new businesses to be opened. Threats of potential new entrant:

Findings and analysis

The SWOT and industry analysis conducted indicate that there are a couple of factors that have led to the challenges that Sally’s business is facing:

  • Sally’s cafe already has many customers but the size of the business suggests that the cafe is small based on the small number of employees. This implies that the business is not able to service the many customers and offer quick services as the staff may be overwhelmed especially during meal times. This means that customers who are in a hurry may opt for an alternative even if the meals offered at Sally’s cafe are top quality.

  • The new food court offers no-frill services implying that it targets customers who do not require specialized services at a cost. This implies that Sally’s cafe may not be offering such services yet some of its clients are students who may not need specialized services as the working young females. Sally ends up losing such customers because most people in the inner city prefers fast foods since they are on some busy schedules that restrict them from staying for long times in hotels or cafes.

  • Thirdly, Sally’s cafe offers European and Middle Eastern dishes yet it is located in Australia. Being in Sydney, it means that most of the customers are Australians. On the other hand, the newly opened food court services American and Australian fast foods meaning that it will attract most of the Australians.


Sally should understand that her clients comprises of young females working in the offices and students, these are people who do not have some much time to spend in the cafe. Sally can retain the customers and attract more if she wants to acquire her market share and attain competitive advantage by:

  • Hiring more personnel will improve service deliver, two waitresses and one cook are not adequate. This means that customers are forced to wait for longer times to be served.

  • Sally should focus more on diversify the dishes but more emphasis should be on Australian dishes since most of the people in Sydney are citizens of Australia.

  • Sally should also diversify the dishes by including least expensive dishes and fast foods which are more preferred by students and young females whole are most of her customers.

  • Lastly, Sally should aim and getting the customer feedback in order to determine if they are satisfied with her cafe’s services and if not what they recommend to be done.


, Boston: Butterworth-Heinemann.The Marketing BookBaker, MJ, & Hart, SJ, 2008,

, Connecticut: Berliner Research Center. Major problems in introducing new productsBerliner, 2000,

, Munich: Verlag. The SWOT AnalysisBohm, A., 2009,

, Ohio: South-Western.MarketingBosijevac, J., & Burrow, J, 2009,

, CreateSpace. The SWOT Analysis: Using Your Strength to Overcome Weaknesses, Using Opportunities to Overcome ThreatsFine, LG, 2009,

, New Jersey: Wiley.Marketing for dummiesHiam, A, 2009,

, New Jersey: Pearson Prentice Hall.Principles of MarketingKotler, P, 2008,

, New York: Pearson/Prentice Hall.Marketing ManagementKotler, P, 2009,

, Victoria: Cengage Learning.Marketing PrinciplesPride, WM, 2011,

, Munich: Grin Verlag. pp. 92SWOT Analysis-Idea, Methodology And A Practical ApproachRichter, A & Pal, N., 2009,

, Worthing: AVA Academia.The fundamentals of marketing communicationRussell, E, 2008,

?, Boston: Harvard Business School Press.What is marketingSilk, AJ, 2006,

, VDM Publishing. SWOT AnalysisSurhone, LM., Timpledon, MT., & Marseken, SF, 2010,

BMGT001 Management and Organisations: Assignment Feedback Sheet

report:Scenario 2

BMGT001 Management and Organisations: Assignment Marking Guide

report:Scenario 3

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