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BSBINM601 Manage knowledge and information

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Table of Contents

Assessment Task 1

Obtain information on business issues

Performance objective

You will demonstrate the skills and knowledge required to obtain information to identify and analyse business issues.

Assessment description

Using the simulated business information provided in this task, and in response to a scenario, you will source, gather and review data and information and utilise formal and informal networks to identify and analyse business problems and issues.

Procedure

  1. Read the scenario information provided under CoffeeVille – your brief in Appendix 1.
  2. Review and familiarise yourself with CoffeeVille’s general business information in Appendix 1.
  3. Review and evaluate business performance data and information in Appendix 2.
  4. Review and analyse customer and marketing information in Appendix 3.
  5. Review and analyse management and staff meeting summaries in Appendix 4.
  6. Gather, organise and evaluate the data and information provided in the appendices to identify and analyse CoffeeVille’s potential business problem/s or issue/s.
  7. Test the validity and reliability of data and information you have used to identify and analyse the potential business problem/s or issue/s in Step 6. Check sources of information provided and their credibility and reliability. Determine if any are ambiguous or contradictory.
  8. Choose one of the business problem/s or issue/s you discovered in Step 6. Identify types and sources of information required to determine appropriate courses of action and support decision makers for your selected issue or problem.
  9. Access and review information available through formal and informal networks relevant to the business problems or issue. Networks could include formal and informal industry networks, internal business networks, social media or internet communities of practice.
  10. Prepare a short written report for Rufus and Emma. The report should include the following information.
    • A brief description of all the business problems or issues you have identified.
    • An explanation of how you reached this conclusion including a description of how the data and information supports your conclusion?
    • A list of the types and sources of data and information required to determine potential causes of the problem/s or issue/s and to support decision-making for one of the problems or issues you identified.
    • Gather information from at least two sources on your list and briefly describe how they support decision-making. Attach copies of gathered information to your report.
      • What processes or techniques were used to test the validity and reliability of data and information you have gathered?
      • What data or information was rejected as it was deemed contradictory or ambiguous?
    • Describe the formal and informal networks that:
      • assisted in identifying and analysing the business problem or issue;
      • may help establish the causes of the problem;
      • or can be used to determine and analyse appropriate courses of action.
    • Copies of data and information you have researched (other than those provided in the Appendices) that is relevant to your analysis process and identification of the business problem/s or issue/s should be attached to the report.
  11. Submit the written report and any research information (if applicable) to your assessor as per the specifications below.

Specifications

You must submit:

  • a written report containing all information as specified in Step 10 above
  • any researched information that is relevant to or supports the report’s activities.

Your assessor will be looking for demonstration of your ability to:

  • organise, evaluate and critique ideas and information
  • build and maintain understanding of a problem of issue
  • develop and write complex texts using appropriate conventions and writing styles
  • use numeracy skills to interpret complex statistical and researched information
  • gather and analyse data and seek feedback to improve organisational plans and processes
  • use digital technologies effectively when sourcing, gathering and analysing information to assist in the management of business operations.

Adjustment for distance-based learners

  • No variation of the task is required.
  • A follow-up interview may be required (at the discretion of the assessor).
  • Documentation can be submitted electronically or uploaded to an LMS for review.

Appendix 1

CoffeeVille – your brief

Rufus and Emma Belcastran, CoffeeVille’s owners, have approached you for assistance. The business has been profitable and steadily expanding for the last 4 years. However, recently expenses have started to climb and sales are dropping. In the last 3 months they have started to address the issue of rising expenses by evaluating and updating procedures and work practices in an effort to reduce costs. So far, their efforts have not had a significant impact on expenditure and their sales revenue continues to be below budget forecasts.

It’s January 2016 and all four stores are closed for a summer break. Emma and Rufus are using the down time to assess their business’s operational and financial status in preparation for the year ahead.

They have asked you to help them analyse their business and the external environment to identify potential reasons for their declining sales. Initially, they want you to review and analyse their business data and information to determine if there is a cause for their concern – what problem/s or issue/s there are and what information is needed to conduct further analysis to enable decisions to be made.

CoffeeVille – general information

The business

CoffeeVille supplies high quality, fair trade coffee and superior hot and cold gourmet food and beverages to customers in Melbourne’s central business district (CBD). Customers are served by well trained, knowledgeable staff who provide fast and friendly service. It is owned and managed by partners Emma and Rufus Belcastran. They opened their first store in 2009 and have since expanded to four coffee shops in and around the CBD.

Business goals and objectives

  • Increase revenue through targeted marketing campaigns.
  • Control direct and indirect operational costs.
  • Maintain superior product and service standards.
  • Establish CoffeeVille brand as an ethically and environmentally responsible company.
  • Maintain highly trained and motivated staff.

Expansion timeline

2009Opened first store in CBD
2009–2011Consolidated position and market share, sales and profits steadily grew as reputation spread.
July 2012Opened second store two blocks south of original store in CBD. This is the smallest of the stores located in a busy retail and professional area of town.
July 2013Opened third store four blocks east of original store in CBD. Slightly larger than the original CoffeeVille store, it is located in the heart of the business and legal district of the CBD and in the path of foot traffic from Southern Cross Station.
July 2014Opened fourth store on the fringes of the CBD. This is their biggest store with a larger sit-down area than the other stores.

The CoffeeVille team

Initially, partners Emma and Rufus Belcastran shared responsibilities for the management of all areas of their business. With the organisation expanding, Rufus has taken on the role of Operations Manager across all four stores while Emma is concentrating more on marketing the new and existing stores.

The business now employs:

  • 3 full-time café managers
  • 4 fully trained baristas
  • 6 full-time and 12 casual food service attendants
  • 2 full-time cooks.

Market analysis

The profile for a CoffeeVille customer consists of the following geographic, demographic, and behaviour factors:

  • Overview of the CBD
    • Large percentage of office workers (80% of daytime trade).
    • Area population growing at 8% per year.
  • Geographic
    • Our immediate geographic target is the area of within 500 metres of the cafe.
    • The total area population is estimated at 45,000.
  • Demographics
    • Male and female.
    • Ages 20–60; this is the age-group that makes up 83% of the available daytime market.
    • Full-time employment.
    • An income over $50,000.
  • Behaviour factors
    • Eat out most times for lunch in a week.
    • Tend to patronise fast service cafes.
    • Enjoy a high quality meal.
    • Value ethical and sustainable practices.

Appendix 2

CoffeeVille business information

Business environment

Internal environment

  • Staff turnover has been relatively low in the last 18 months once the initial staff training period was completed for the fourth store.
  • Menus for all stores have been updated in the last 12 months, keeping old favourites and introducing new dishes from around the world.
  • Hot dish options in the external catering menu have been modified to reflect these changes while cold options have remained essentially the same.

External environment

  • Utility expenses have risen steadily over the last 18 months due to regular price rises. The business is currently implementing cost saving measures.
  • Wages have gone up 15% due to the need to pay higher wages for trained, experienced baristas due to skills shortages.
  • Rents for each of the properties has rise between 10 to 18% in the last 12 months and is expected to rise again early in 2016.
  • Coffee bean prices rose rapidly in early 2014 and stayed high until the end of the year. Prices eased slightly in early 2015 but are expected to rise again later in the year due to lower worldwide production and increased demand. The retail price for all coffee menu items in all stores has been raised twice in the last 12 months.
  • Recently, red meat prices have started to rise with increases of up to 20% in the last six months. So far, these price rises have been absorbed but Emma and Rufus plan to raise menu prices for meat-based hot dishes in the cafe and catering menus soon.

Business performance

General trends

  • Sales for first 6 months of 2015 are down across all sales categories and stores. Overall, food sales are down 10%, beverages 12% and catering 17%. When combined with rising expenses, profits are down for the first half of the financial year by 19%
  • After opening a year ago, the fourth store is slowly building customers but is still not performing to forecasted levels. Most of the marketing budget and Emma’s efforts have been focused on the fourth store.
  • Productivity has increased with staff able to serve more customers per hour, per employee. This is partly due to barista coffee preparation speeds increasing after all barista staff completed an advanced barista course in Jan 2015.
  • Savings made in payroll and cost of goods due to productivity gains have been offset by rising wages and food prices.

Store 1

  • Foot traffic is down by 5%.
  • Sales are generally steady but not growing as planned. Income is hovering just under budget while profits are 10–15% below budget due to increased expenses. Emma and Rufus are not overly concerned yet as the budget forecast figures were based on a 5% increase in sales.

Store 2

  • Foot traffic down by 10%.
  • Food and beverage sales have been consistently under budget for the July to December period with budget variances steadily increasing.
  • External catering sales are down significantly, especially for November (21%) and December (23%) which are normally the business’s busiest periods. Catering have now been under budget for the last 18 months at this store with the budget variance rate steadily increasing.

Store 3

  • Foot traffic down 15%.
  • Food and beverage sales have been under budget for the July to December period with the highest budget variance figures for all stores.
  • External catering sales have been consistently under budget for the July to December period with December down 16%. Catering has now been under budget for the last 12 months at this store with the budget variance rate hovering between 13% and 16%.

Store 4

  • Foot traffic up marginally by 0.05%
  • Food and beverage sales are a consistent 3–4% under budget.
  • External catering is down 5% on average with December bucking the trend and meeting budget.
  • A new competitor is due to open 100 metres away in February 2016.
  • Sales have been very flat and not grown as hoped for this store over the last 12 months despite several promotions and advertising campaigns in the local area.

Financial year July 2014 – June 2015

July–December 2014

Sales $JulyAugSeptOctNovDec
Food sales285,668279,805273,942262,580250,078199,251
Beverage sales191,199190,163189,126187,054182,650179,523
External catering82,36083,54081,98081,48077,50074,370
Total income559,227553,508545,048531,114510,228453,144
Total expenses482,190470,934483,431451,683461,746404,986
Net profit/loss77,03782,57461,61779,43148,48248,158

Jan–July 2015

Sales $JanFebMarAprilMayJuneYear Total
Food sales203,894221,209238,525245,476259,742262,8032,982,972
Beverage sales181,220185,263187,263188,263189,560191,2082,242,492
External catering57,28460,92667,85368,85351,85349,137837,136
Total income442,398467,398493,641502,592501,155503,1486,062,600
Total expenses413,064421,865442,733447,512464,198478,6305,422,972
Net profit/loss29,33445,53350,90855,08036,95724,518639,629

Financial year July 2015–June 2016

July–December 2015

Sales $JulyAugSeptOctNovDec
Food sales231,391226,642231,865227,105202,563154,300
Beverage sales148,065147,262153,192158,323135,088129,705
External catering60,20760,35856,47655,45752,11147,597
Total income439,663434,262441,533440,885389,762331,602
Total expenses373,713364,780366,472374,752339,093288,494
Net profit/loss65,94969,48275,06166,13350,66943,108

Budget variance report – All stores

Summary of variance results for comparisons of budget to actual income for the period 2011–2015

A positive variance indicates the percentage above budget, a negative figures indicates the percentage below budget.

Financial year2011-122012-132013-142014-152015-16
Jul-Dec 2011Jan-Jun 2012Jul-Dec 2012Jan-Jun 2013Jul-Dec 2013Jan-Jun 2014Jul-Dec 2014Jan-Jun 2015Jul-Dec 2015
Food sales5%8%7%12%8%1%-3%-8%-10%
Beverage sales8%2%4%5%5%-2%-4%-5%-12%
External catering12%4%7%2%5%2%-8%-11%-17%
Total income8%5%6%6%6%1%-5%-8%-12%
Net profit/loss7%4%-1%6%6%-4%-5%-11%-13%

Appendix 3

Customer and marketing information

CoffeeVille customer information

Customer spending patterns

ItemAverage spend – 2011Average spend – 2014VarianceComments
Coffee$3.35$3.8515%While average spend has risen, Emma and Rufus feel this is a result of general price rises, not customers purchasing more items.
Food – takeaway$8.65$9.8013%
Food – sit down$9.20$10.4514%
Catering$18.00$22.0022%

Summary customer feedback forms Jan–Dec 2015

  • Thanks for your friendly smile every morning. I’ll miss that when we move.
  • Great coffee, great service.
  • Can you open a store near the new office in Fairfield?
  • Loved the vegetarian frittata!
  • Best mocha I’ve had in weeks!
  • Do you deliver to Richmond? I’m going to miss your coffee and healthy salads!
  • Expensive coffee
  • Service staff always happy to see you
  • Vote 1 Karlie best barista in town!!
  • Going to miss you all
  • Good coffee but expensive compared to Zelda’s.

Summary customer comments Facebook Jan–Dec 2015

  • Lunch time! Best focaccia ever!
  • Love that you guys do free trade.
  • Look at the art on this coffee!
  • Just wanted to say farewell. Thanks for excellent coffee every morning. I’ll miss your smiles. Any café recommendations in Canterbury?
  • Lunch with the crew at CoffeeVille. Something for everyone, even our veggie sisters.
  • A big thank you from everyone at Milson Financial. Today’s our last day L If I get another job in the city I’ll definitely be coming back!
  • Thanks for my birthday coffee. Was looking forward to it all morning!!

Loyalty Club membership

Membership activity from December 2014 to May 2015.

MembershipMembers 2014 *Active membersInactive^CancelledTotal members 2015 #
Store 148435048
Store 228205325
Store 332216527
Store 419152217
Total127991810117
78%14%8%
Analysis: Number of inactive and cancelled member has increased 15% from previous period.

*Total members as at December 2014

Inactive = No account activity for a minimum of 3 months

#Total members as at May 2015

Action Marketing survey results December 1–4, 2014

Action Marketing conducted a survey in the area within the boundaries of the three CBD stores. A summary of feedback received includes the following.

  • Customers are buying less food over summer as they are trying to be healthy and spend less money in the lead up to Christmas.
  • A number expressed concern about the possibility of losing their jobs due to ongoing poor financial performance of their employer. Many were trying to save money in case this occurred.
  • 38% of customers said they had eaten at CoffeeVille but considered it a treat due to prices.
  • Coffee was consistently rated as excellent; however, 58% of respondents who purchased coffee from CoffeeVille said it wasn’t their primary source.
  • Customers who regularly purchased food and/or beverages from CoffeeVille supported their environmental and socially responsible position.

Key survey takeaways

  • price
  • business environment in CBD (closures)
  • general economic concerns
  • healthy lifestyle and eating habits.

Survey results

QuestionResponses
Have you ever visited a CoffeeVille store?Yes 67%No 33%
Which store do you visit? (Can choose more than one store)Store 1 49%Store 2 43%Store 3 27%Store 4 12%
How times a month, on average, do you visit the coffee shop?1–4 times 25%5–9 times 27%10–15 times 31%Most days 17%
What is your purpose for visiting CoffeeVille? (Can choose more than one store)For the coffee 69%Get something to eat 46%To read the papers 18%To meet others 22%To relax; 15%
How would you rate the overall friendliness of the staff? (with 5 being the most friendly)5 = Excellent 53%4 = Very good 32%3 = Good 12%2 = Fair 3%1 = Poor 0%0 = Awful 0%
How do you rate the price of your food and/or beverages? (with 5 being an excellent price)5 = Excellent 22%4 = Very good 28%3 = Good 29%2 = Fair 15%1 = Poor 6%0 = Awful 0%
How do you rate the variety of products? (with 5 being the best variety)5 = Excellent 33%4 = Very good 32%3 = Good 33%2 = Fair 2%1 = Poor 0%0 = Awful 0%
How do you rate the product quality? (with 5 being excellent quality)5 = Excellent 50%4 = Very good 28%3 = Good 18%2 = Fair 4%1 = Poor 0%0 = Awful 0%
Have you found your wait in line to be too long for your satisfaction?No, very fast 48%No, pretty quick 32%A bit slow 18%Waited ages 2%Very slow 0%

Appendix 4

Management and team meeting summaries

Meeting summaries

Management team meeting

Topic: External catering Christmas bookings

Rufus – Owner/Operations Manager

  • Catering bookings for corporate Christmas parties down across all stores for Nov and Dec.
  • Stores 2 and 3 under sales budget forecasts by 20–30%.

Emma – Owner/Marketing

  • Made phone calls and personal visits to all previous clients who have not rebooked this year.
  • Budget constraints common reason for not booking.
  • Some using another, cheaper caterer, some are not having a catered Christmas event.

Sarah – Manager, Store 1

  • Staff from two businesses CoffeeVille catered for last year have mentioned management are only holding self-catered morning/afternoon tea for staff, no formal Christmas party. Both businesses employ 20–30 employees.

Topic: 2016 budgets

Rufus – Owner/Operations Manager

All budgets for 2016 have been adjusted to reflect sales and expenses trends.

Team meeting – Store 3

Topic: Sales trends, customer feedback

Rufus – Owner/Operations Manager

  • Sales down across all revenue streams.

Need a sales push to capture foot traffic in city for Christmas shopping.

Leunie – Manager, Store 3

  • Early morning period slower, less coffee and breakfast sales from train station traffic.
  • Lunch time food trade from office staff down. Starting Christmas shopping during lunch period?

Staff comments

  • Not as many groups dining in store at lunch time, more singles.
  • Customers choosing cheaper items, chatter about money being tight.
  • Trying to push coffee/cake and meal/water deals but uptake low.
  • Several regulars from McKinnon’s say staff Christmas gathering being held off-site this year, no external catering booked – we catered for them last year.
  • Hot food sales down, higher wastage. Preference for salads and sandwich bar.
  • Received queries about getting Paleo options added to the menu.
  • Sales manager at XX department store said retail sales are sluggish compared to this time last year. Lots of looking but not buying. Hoping it will pick up soon.
  • Lots of general chatter about economic concerns, terrorism, home interest loan rates possibly going up after Christmas. General feel of customers is negative.
  • Staff expressed concern about job security due to lower revenue figures.

Management team meeting

Topic: Revenue concerns

Rufus – Owner/Operations Manager

  • Revenue across all stores under budget.
  • Store 2 food and catering of real concern.
  • Store 3 food, beverages and catering all significantly under budget.

Emma – Owner/Marketing

  • Shifting marketing focus from Store 4 back to CBD stores, focus on Stores 2 and 3.
  • New campaigns to start when offices reopen in Jan 2016.

Sarah – Manager, Store 1

  • Customers not spending as much, average daily spend per customer down compared to previous years.

Christos – Manager, Store 2

  • Two businesses within their building to close permanently at Christmas.
  • Missing a number of regular customers at the register.

Leunie – Manager, Store 3

  • One 50+ employee business in building next door moving to new offices out of CBD.
  • One 20+ employee financial advisor have moved to new office in suburbs as rent is cheaper.
  • Two For Lease signs for offices in buildings in same block as cafe.
  • Lots of chatter from clients working for professional services companies about business retraction, possible redundancies.

Jordie – Manager, Store 4

  • Nearby residential towers nearly completed construction, due to open in February, potential to grow morning traffic.

Due to higher residential occupancy near store, raised potential for take away dinner trade. Fresh cooked and packed for customers to purchase on way home from work. Other alternative is a delivery service within a specific radius. Might also work for Store 3 due to proximity to train station and Docklands residential complexes. Would mean longer opening hours to catch after-work commuters and residents.


Assessment Task 2

Analyse information and knowledge

Performance objective

You will demonstrate the skills and knowledge required to analyse information and knowledge on business issues or problems to aid decision-making.

Assessment description

Using the simulated business information provided in this task, and in response to a scenario, you will identify patterns or emerging trends, determine the causes and determine their potential effect on the business by using statistical analysis techniques. You will document evaluation processes and adjust management information or decision support systems if necessary to meet information processing objectives.

Procedure

  1. Read the scenario information provided under CoffeeVille – your brief in Appendix 1.
  2. If necessary, review CoffeeVille’s general business information provided in Appendix 1 of Assessment 1 to maintain your understanding of the business and its environment.
  3. Review and evaluate business performance data and information in Appendix 2.
  4. Review and analyse research data and information in Appendix 3.
  5. Respond to Question 1 in Appendix 5 by developing SMART objectives for the analysis processes you plan to undertake to identify causes for the business’s declining sales. Make sure they are consistent with the decision required.
  6. Based on the information provided in this assessment and Assessment Task 1, identify and interpret trends and patterns and their causes and effects relevant to the identified business problem. You can use computer software or manual techniques to complete trend and correlation statistical analysis calculations.
    • You can complete as many trend and correlation calculations as desired to assist in the identification of trends and patterns and their causes or effects.
    • You must complete a minimum of two trend and two correlation calculations for this assessment.
    • The results of at least two trend and two correlation calculations must be converted to graphs for visual identification and evaluation of trends or patterns and their causes or effects.
  7. Document analysis processes undertaken so far by completing Parts 1 and 2 of the Decision Analysis Report in Appendix 4. Note that additional information will be added to this report in Assessment Task 3. Make sure you use writing styles and conventions appropriate for a management report, including level of formality selected, terminology used and depth of complexity in information provided.
  8. Answer the remaining assessment questions in Appendix 5.

Specifications

You must submit:

  • completed Parts 1 and 2 of the Decision Analysis Report
  • copies of the results gained from at least two trend and two correlation statistical analysis techniques used to assist trend and pattern identification – please attach to the Decision Analysis Report
  • copies of line or scatter graphs developed from the results of at least two trend and two correlation statistical analysis techniques – please attach to the Decision Analysis Report
  • your responses to the questions in Appendix 5.

Your assessor will be looking for your ability to:

  • organise, evaluate and critique ideas and information
  • build and maintain understanding of a problem of issue
  • develop and write complex texts using appropriate conventions and writing styles
  • use numeracy skills to interpret complex statistical and researched information
  • gather and analyse data and seek feedback to improve organisational plans and processes
  • use digital technologies effectively to manage business operations for strategic and operational purposes
  • plan and manage activities that have implications for the whole organisation
  • make high impact decisions – analyse input from a range of sources and, where appropriate, drawing on experience.

Adjustment for distance-based learners

  • No variation of the task is required.
  • A follow-up interview may be required (at the discretion of the assessor).
  • Documentation can be submitted electronically or uploaded to an LMS for review.

Appendix 1

CoffeeVille – your brief

Rufus and Emma Belcastran, CoffeeVille’s owners, have approached you for assistance. The business has been profitable and steadily expanding for the last 4 years but recently, expenses have started to climb and sales drop. In the last 3 months they have started to address the issue of rising expenses.

In the last 3 months they have started to address the issue of rising expenses by evaluating and updating procedures and work practices in an effort to reduce costs. So far, their efforts have not had a significant impact on expenditure and their sales revenue continues to be below budget forecasts.

It’s January 2016 and all four stores are closed for a summer break. Emma and Rufus are using the down time to assess their business’s operational and financial status in preparation for the year ahead.

They have asked you to help them analyse their business and the external environment to identify potential reasons for their declining sales. Now that the business issue or problem has been identified, they want you to analyse data and information to determine the potential causes of the issue.

You plan to use data and information identified in Assessment 1 and in the Appendices of Assessments 1 and 2, as well as conduct research into potential external environmental factors. You believe using statistical and sensitivity analysis techniques will enable you to identify relationships between data, clarifying potential causes of the business issue.

Appendix 2

Coffeeville business data and information

Business performance

General trends

  • Sales for first 6 months of 2015 are down across all categories and stores. Overall, food sales are down 10%, beverages 12% and catering 17%. When combined with rising expenses, profits are down for the first half of the financial year by 19%
  • After opening a year ago, the 4th store is slowly building customers but is still not performing to forecasted levels. Most of the marketing budget and Emma’s efforts have been focussed there.
  • Productivity has increased with staff able to serve more customers per hour per person. Barista coffee preparation speeds have increased after all barista staff completed an advanced barista course in Jan 2015.
  • Savings made in payroll and cost of goods due to productivity gains has been offset by rising wages and food prices.

Payroll expenses

YearPayroll expenses as % of total expenses
200934.9%
201035.3%
201134.2%
201339.8%
201442.1%
201545.3%

Financial information – Organisation

Financial year July 2014–June 2015

July–December 2014

Sales $JulyAugSeptOctNovDec
Food sales285,668279,805273,942262,580250,078199,251
Beverage sales191,199190,163189,126187,054182,650179,523
External catering82,36083,54081,98081,48077,50074,370
Total income559,227553,508545,048531,114510,228453,144
Total expenses482,190470,934483,431451,683461,746404,986
Net profit/loss77,03782,57461,61779,43148,48248,158

Jan–July 2015

Sales $JanFebMarAprilMayJuneYear Total
Food sales203,894221,209238,525245,476259,742262,8032,982,972
Beverage sales181,220185,263187,263188,263189,560191,2082,242,492
External catering57,28460,92667,85368,85351,85349,137837,136
Total income442,398467,398493,641502,592501,155503,1486,062,600
Total expenses413,064421,865442,733447,512464,198478,6305,422,972
Net profit/loss29,334;45,53350,90855,08036,95724,518639,628

Financial year July 2015–June 2016

July–December 2015 (actual results)

Sales $JulyAugSeptOctNovDec
Food sales231,391226,642231,865227,105202,563154,300
Beverage sales148,065147,262153,192158,323135,088129,705
External catering60,20760,35856,47655,45752,11147,597
Total income439,663434,262441,533440,885389,762331,602
Total expenses373,713364,780366,472374,752339,093288,494
Net profit/loss65,95069,48275,06166,13350,66943,108

Jan–July 2016 (adjusted forecast)

Sales $JanFebMarAprilMayJuneYear Total
Food sales177,388201,300224,214208,655233,768233,6322,552,823
Beverage sales152,225163,031161,046167,554170,604170,1751,856,270
External catering46,97351,17856,31857,14842,77940,292626,894
Total income376,586415,509441,578433,357447,151444,0995,035,987
Total expenses351,615375,031396,039385,864414,176422,4594,452,488
Net profit/loss24,97140,47845,53947,49332,97521,640583,499

Budget variance report – All stores

Summary of variance results for comparisons of budget to actual income for the period 2011 – 2015

A positive variance indicates the percentage above budget, a negative figures indicates the percentage below budget.

Financial year2011-122012-132013-142014-152015-16
Jul-Dec 2011Jan-Jun 2012Jul-Dec 2012Jan-Jun 2013Jul-Dec 2013Jan-Jun 2014Jul-Dec 2014Jan-Jun 2015Jul-Dec 2015
Food sales5%8%7%12%8%1%-3%-8%-10%
Beverage sales8%2%4%5%5%-2%-4%-5%-12%
External catering12%4%7%2%5%2%-8%-11%-17%
Total income8%5%6%6%6%1%-5%-9%-12%
Net profit/loss7%4%-1%6%6%-4%-5%-11%-13%

Financial history by income source

*Note: Store 3 opened July 2014, Store 4 July 2014

Food SalesJulyAugSeptOctNovDecJanFebMarAprilMayJuneTotal
2013-14224,580212,965208,695210,589209,568189,655175,250186,752198,765209,632218,655225,8922,470,998
2014-15357,580362,937365,600355,290347,868337,438301,056301,475323,324307,358282,052289,0803,931,058
2015-16257,101251,825252,027244,199225,070175,341177,388201,300224,214208,655233,768233,6322,684,519
Beverage SalesJulyAugSeptOctNovDecJanFebMarAprilMayJuneTotal
2013-14150,469140,557137,739138,989138,315125,172115,665123,256131,185138,357148,385151,3481,639,437
2014-15210,306214,056215,920203,934189,078182,794160,878161,130182,540185,239185,074189,0852,280,034
2015-16168,255167,343170,213172,090157,079152,595152,225163,031161,046167,554170,604170,1751,972,210
External cateringJulyAugSeptOctNovDecJanFebMarAprilMayJuneTotal
2013-1451,65052,89054,82059,85065,89060,15039,55041,33042,58046,45049,62051,230616,010
2014-1597,27498,88199,68095,85389,38585,19660,58560,75366,41477,60581,94480,067993,637
2015-1670,41871,00968,04367,22163,55059,49646,97351,17856,31857,14842,77940,292694,425
Total incomeJulyAugSeptOctNovDecJanFebMarAprilMayJuneTotal
2013-14426,699406,412401,254409,428413,773374,977330,465351,338372,530394,439416,660428,4704,726,445
2014-15665,160675,874681,200655,077626,331605,428522,519523,358572,278570,202549,070558,2327,204,729
2015-16495,774490,177490,283483,510445,699387,431376,585415,509441,578433,357447,151444,0995,351,154
Net profitJulyAugSeptOctNovDecJanFebMarAprilMayJuneTotal
2013-1493,87485,34792,28898,26399,30678,74562,78877,29485,68294,66591,66589,9791,049,896
2014-1583,501108,019121,333100,60977,09570,69583,37361,30576,72473,85472,45766,266995,231
2015-1668,29673,12655,42672,31242,35041,17424,97040,47845,53947,49232,97521,641565,779

Financial information – Store 2

Store 2 Financial results July – December 2014

Sales $JulyAugSeptOctNovDec
Food sales64,36465,32965,80863,95262,61660,739
Beverage sales37,85538,53038,86636,70834,03432,903
External catering17,50917,79917,94217,25416,08915,335
Total income119,728121,658122,616117,914112,739108,977
Total expenses104,164102,192106,676100,22798,08395,900
Net profit / loss15,56419,46615,94017,68714,65613,077

Store 2 Financial results Jan – July 2015

Sales $JanFebMarAprilMayJuneYear Total
Food sales54,19054,26658,19855,32450,76952,034707,590
Beverage sales28,95829,00332,85733,34333,31334,035410,406
External catering10,90510,93611,95513,96914,75014,412178,855
Total income94,05394,204103,010102,63698,833100,4811,296,851
Total expenses79,00582,90089,61989,29485,98488,4241,122,467
Net profit/loss15,04811,30513,39113,34212,84812,057174,384

Store 2 Financial results July – December 2015

Sales $JulyAugSeptOctNovDec
Food sales$51,289$50,664$49,413$46,912$46,286$42,908
Beverage sales$34,158$33,827$29,836$28,515$28,183$26,178
External catering$10,448$8,064$7,872$7,776$10,112$9,363
Total income$95,895$92,555$87,121$83,203$84,581$78,449
Total expenses$86,655$82,660$82,920$80,392$82,176$72,560
Net profit/loss$9,240$9,895$4,201$2,811$2,405$5,889

Store 2 Budget variance report July – December 2015

A positive variance indicates percentage above budget, a negative figures indicates percentage below budget.

Sales $JulyAugSeptOctNovDec
Food sales-2%-3%-5%-9%-10%-14%
Beverage sales3%2%-4%-11%-12%-9%
External catering-12%-16%-18%-19%-21%-23%
Total income-11%-12%-8%-19%-20%-17%
Total expenses1.50%1.78%2.10%1.45%1.32%1.70%
Net profit/loss-31%-36%-41%-86%-59%-69%
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Financial information – Store 3

Store 3 Financial results July – December 2014

Sales $JulyAugSeptOctNovDec
Food sales71,51676,21776,77678,16476,53177,611
Beverage sales42,06144,95245,34344,86541,59742,043
External catering19,45520,76520,93321,08819,66519,595
Total income133,032141,934143,052144,117137,793139,249
Total expenses115,738119,224117,303122,499121,258122,539
Net profit/loss17,29422,71025,74921,61816,53516,710

Store 3 Financial results Jan – July 2015

Sales $JanFebMarAprilMayJuneYear Total
Food sales69,24372,35477,59870,69264,87263,598901,685
Beverage sales37,00238,67143,81042,60542,56739,708523,870
External catering13,93514,58115,93917,84918,84716,814227,342
Total income120,180125,606137,347131,146126,286120,1201,652,897
Total expenses100,951110,533119,492114,097109,869105,7051,425,544
Net profit/loss19,22915,07317,85517,04916,41714,415227,353

Store 3 Financial results July – December 2015

Sales $JulyAugSeptOctNovDec
Food sales$71,922$71,140$71,922$70,358$68,795$40,657
Beverage sales$37,309$36,894$37,309$36,065$35,236$28,407
External catering$10,560$9,440$9,080$10,320$11,920$12,768
Total income$119,791$117,474$118,311$116,743$115,951$81,832
Total expenses$108,959$103,853$103,752$103,752$105,927$87,464
Net profit/loss$10,832$13,621$14,559$12,991$10,024-$5,632

Store 3 Budget variance report July – December 2015

A positive variance indicates percentage above budget, a negative figures indicates percentage below budget.

Sales $JulyAugSeptOctNovDec
Food sales-8%-9%-8%-10%-12%-15%
Beverage sales-10%-11%-10%-13%-15%-17%
External catering-12%-13%-16%-14%-13%-16%
Total income-16%-18%-18%-19%-21%-23%
Total expenses2.10%2.30%2.20%2.20%2%2.30%
Net profit/loss-43%-45%-46%-51%-56%-59%
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Appendix 3

Research data and information

Melbourne demographics – City of Melbourne

General and industry specific information is available on City of Melbourne website.

Two main areas of the website to investigate are:

  • City of Melbourne, ‘Doing business in Melbourne’, viewed January 2016, <http://www.melbourne.vic.gov.au/business/doing-business/Pages/doing-business-in-melbourne.aspx>
  • City of Melbourne, ‘Research and statistics’, viewed January 2016, <http://www.melbourne.vic.gov.au/about-melbourne/research-and-statistics/Pages/research-and-statistics.aspx>.

City of Melbourne has been producing a report called Daily Population Estimates and Forecasts for many years. It was updated in 2015. Among other information, it includes statistics on past and future trends for City of Melbourne’s workforce and residential population.

You can find it at:

  • City of Melbourne, ‘Daily population estimates and forecasts’, viewed January 2016, <http://www.melbourne.vic.gov.au/about-melbourne/research-and-statistics/Pages/daily-population-estimates-and-forecasts.aspx>.

Economic activity

Summary Australian interest rates – Reserve Bank of Australia

All rates expressed as percentages.

FebMarAprMayJuneJulAugSeptOctNovDec
20142.52.52.52.52.52.52.52.52.52.52.5
20152.252.252.02.02.02.02.02.02.02.252.25

Melbourne CBD retail information

Commercial property rental rates per square meter Melbourne CBD

2013201420152016 (forecast)
Gross average rent$7,000(h 5.7%)$7,750(h 10.1%)$8,250(h 6.4%)$8,800(h 6.6%)

Commercial property vacancy rates – Melbourne CBD

2013201420152016 (forecast)
Vacancy rates8.2%8.5%9.1%9.5%

Cafe / restaurant / bistros in Melbourne CBD as at June 31st 2015

Note: figures based on registered businesses, closures and permit applications lodged by June1st each year.

YearNo. new cafe / restaurant / bistros openedNo. cafe / restaurant / bistros closedNo. cafe / restaurant / bistro seatsTotal café / restaurant / bistros in CBD
20113712169,9832585
20124113178,3202613
20133918206,0312634
20145219213,2722670
20154521217,1572694

Media articles

Business News Aug 2014

New era looms as CBD office boom ends

Property developers and investors are facing diminished returns and an uncertain future as the CBD commercial property market stalls.

Coinciding with a slowdown of economic activity and low business confidence, particularly in the retail and professional services sector, applications for new development projects fallen to their lowest levels in 5 years.

Mr Kenneth Staines, from Placement Properties, indicated this trend is also occurring in most other capital cities in Australia and many other Western countries. Consumer confidence is down, people are not spending and this is affecting businesses everywhere. Everyone is sitting tight on their money – consumers and investors, he stated at a business forum this week.

One of the reasons he believes applications are down is the recent rise in vacant office space within the central CBD. Rents have remained relatively high and many businesses are struggling as income has not risen in tandem, he said.

A recent survey conducted by the Property Institute shows the number of tenants in the CBD falling, particularly in small to medium business categories. New tenant enquiries has been flat with most enquiries coming from larger businesses interested in acquiring recently vacated adjoining office space.

Melbourne moves: businesses shift out from the city

December 2014

There’s a shift on in Melbourne, with many medium and small businesses moving out of the CBD to its fringes and suburbs.

A new report shows 16 small and 10 medium sized companies moved from the CBD to its fringe and nearby suburbs in the past 12 months, continuing a trend that started in 2013.

The annual Johnson report Melbourne Property 2014 says there are several factors behind the move, including cost savings and changes in the way people are working.

Johnson’s Research Manager Kim Rayner says their analysis shows 85% of these businesses who moved out of the CBD this year have relocated to properties in the periphery or within 5 km of the CBD, with very few locating further than 10 kms.

Johnson’s Director of Office Leasing (Victoria) Andrew Mahji says Melbourne’s CBD office vacancy rate has substantially increased this year.

“We have a vacancy rate of 10% in the Melbourne CBD,” Mahji says. “It coincides with a lot of new buildings going up in Docklands and Richmond.”

Softer demand drives up office vacancy rates in all CBD markets

Vacancy rates for offices is expected to peak in most Australian CBD markets in 2015–2016, with Brisbane expected to have the peak vacancy of nearly 14% according to forecasts from REAC.

REAC’s Research Director for Australia, Millie Kearney, said the latest Property Council of Australia vacancy statistics highlighted that demand had decreased across all CBD markets with negative net absorption driving up vacancy rates in every major capital city.

CBD Office Total Vacancy rate % – July 2015

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Appendix 4

Decision Analysis Report

Part 1 – Decision / Issue Name

Name decision, issue, problem, project, plan or strategy the decision is linked to.

Decision required

Describe the decision that must be made. It should outline what are the expectations or parameters of the decision to any decision-makers or recipients of the document. Include any timeframes the decision must be made in.

History

A brief history of events, reasons or causes that necessitates the decision. This should be an overview only and only contain information relevant to the required decision. It should briefly describe the who, what, when and where of the situation requiring a decision.

Part 2 – Analysis

Summarise the analytical processes used, the results of the analysis and their implications – do they support or disprove the issue or problem, what further questions were raised as a result of the analysis.

Part 3 – Decision options

List all viable, genuine courses of action that address the issue. Briefly list actions to be taken, any costs associated with the option and potential positive and negative outcomes.

Part 4 – Recommendation / Action taken

Indicate which course of action is recommended (if making a recommendation to a higher decision-maker) or the action to be taken. Briefly outline the reasoning for choosing this option.

Appendix 5

Assessment questions

  1. What is your objective/s for the analysis processes you plan to undertake?
  2. Briefly describe how management information or decision support systems can assist you when analysing information and identifying trends and patterns.
  3. Briefly describe how management information or decision support systems can support the analysis of proposed courses of action and their impact on the business.
  4. List two types of adjustments you might have to make management information or decision support systems to help you meet your stated objectives.

Assessment Task 3

Performance objective

You will demonstrate the skills and knowledge required to make timely decisions on identified business issues.

Assessment description

Using the simulated business information provided, and in response to a scenario, you will utilise risk management plans, sensitivity and quantitative analysis techniques and consultation processes to determine acceptable courses of action and make a decision. The decisions must be taken within organisational guidelines and be consistent with its values, objectives and standards. A presentation will be made to CoffeeVille’s managers detailing options available for potential courses of action and your recommendations.

Procedure

  1. Read the scenario information provided under CoffeeVille – your brief in Appendix 1.
  2. Review CoffeeVille’s organisational chart in Appendix 1 to build an understanding of the business’s reporting and command structure.
  3. Review, evaluate and analyse information provided about each of the decision options facing Coffeeville in Appendix 2.
  4. Review risk management and business impact analysis information in Appendix 3.
  5. Review and analyse City of Melbourne demographic information in Appendix 4.
  6. Based on the information provided in this and previous assessments, utilise statistical, sensitivity and quantitative analysis techniques to analyse the viability of options 2 and 3 to determine the most acceptable course of action to resolve the business issue or problem. You can use computer software or manual techniques to complete your analysis calculations.
    • You can complete as many types and number of analysis calculations as desired to assist in further analysis and clarification of causes of the business issue identified in CoffeeVille – your brief in Appendix 1 and evaluation of potential courses of action to address the issue.
    • You must complete a minimum of one statistical (other than trend or correlation), one sensitivity and one quantitative calculation for this assessment.
    • If applicable, the results your statistical calculations could be converted to graphs for visual identification and evaluation of causes or courses of action.
  7. Update Part 2 of the Decision Analysis Report you started preparing in Assessment 2. Clearly document the results of additional analysis processes undertaken in this assessment in the Report.
  8. Complete Part 3 of the Decision Analysis Report based on the information provided and the results of your research and analysis. When listing positive and negative outcomes, consider their impact on the business as a whole and operation of the individual stores. The events and outcomes described in the business’s risk management plans should also be considered.
  9. Review CoffeeVille simulated business documentation, including policies and procedures, relating to decision-making and management and employee responsibilities to assist in understanding and managing change within the business. Coffeeville’s policies and procedures can be viewed online on Coffeeville’s intranet at <http://simulations.ibsa.org.au/coffeeville/secure/documents.php?>.
  10. Complete force field diagrams for options 2 and 3 to help you determine which course of action to recommend to Emma and Rufus and assist their decision-making.
  11. Complete Part 4 of the Decision Analysis Report by making a recommendation and outlining your reasoning why you have come to this conclusion.
  12. Answer the assessment questions in Appendix 5.
  13. Arrange a time and place with your assessor to complete your presentation.
  14. Present your recommendations to one of the owner/managers of CoffeeVille as per role-play and presentation guidelines provided in Appendix 6.

You must submit:

  • a fully completed Decision Analysis Report
  • computer printouts or handwritten copies of the results gained the statistical, sensitivity and quantitative analysis techniques used to assist the decision-making process – at least one set of results for each type of analysis technique must be attached to the Decision Analysis Report
  • force field analysis diagrams for options 2 and 3 – please attach to the Decision Analysis Report
  • your responses to the questions in Appendix 5.

You must complete a 10–15 minute presentation.

Your assessor will be looking for your ability to:

  • organise, evaluate and critique ideas and information
  • build and maintain understanding of a problem of issue
  • develop and write complex texts using appropriate conventions and writing styles
  • use numeracy skills to perform calculations and interpret complex statistical
  • use communication skills to:
    • access and share information and build and maintain effective working relationships
    • use appropriate listening and questioning techniques
    • present complex information in formal situations in a format appropriate to the audience and purpose
  • gather and analyse data and seek feedback to improve organisational plans and processes
  • monitor and review organisational policies, procedures and adhere to legislative requirements in order to implement and manage change
  • use digital technologies effectively to manage business operations for strategic and operational purposes
  • use management skills to:
    • make high impact decisions
    • plan and manage activities that have implications for the whole organisation
    • work autonomously when making high level decisions to achieve and improve organisational goals.

Adjustment for distance-based learners

  • No variation of the task is required.
  • The presentation may be conducted via video or teleconferencing.
  • A follow-up interview may be required (at the discretion of the assessor).
  • Documentation can be submitted electronically or uploaded to an LMS for review.

Appendix 3

CoffeeVille – your brief

Rufus and Emma Belcastran, CoffeeVille’s owners, have approached you for assistance. The business has been profitable and steadily expanding for the last 4 years but recently, expenses have started to climb and sales drop.

In the last 3 months they have started to address the issue of rising expenses by evaluating and updating procedures and work practices in an effort to reduce costs. So far, their efforts have not had a significant impact on expenditure and their sales revenue continues to be below budget forecasts.

It’s January 2016 and all four stores are closed for a summer break. Emma and Rufus are using this down time to assess their business’s operational and financial status in preparation for the year ahead.

They have asked you to help them determine the best course of action to take and assist in the decision-making process.

There are three courses of action that could be taken.

  1. Do nothing.
  2. Reduce their prices.
  3. Provide take-home packaged meals and a meal delivery system.

Initially, you plan to use statistical, sensitivity and quantitative analysis techniques to analyse the impact of Options 2 and 3. The data and information provided in the Appendices of Assessments 1 and 2 as well as the results of any analysis processes completed in Assessment 2 may assist your analysis.

Organisational chart

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Appendix 2

Analysis of decision options

Based on discussions with Emma and Rufus, and further research into economic and business climates, you have prepared the following summary for the three options under consideration. Your brief is to only investigate options 2 and 3 further, however, any information in the summary for option 1 can be used when determining the most acceptable course of action.

1. Do nothing

Economic indicators and industry analysts forecast a more positive economic environment within the next 12 months with both business and consumer confidence growing.

Business and real estate analysts forecast CBD vacancy rates to drop to 9% within 12 months and 8.5% within 18 months as local and international businesses absorb the current glut of office space.

Aim

  • To maintain reputation as provider of quality food and beverages.
  • To eventually return to previous levels of profitability within the next 12 months.

Business performance data

  • food sales are down 10%, beverages 12% and catering 17%.
  • When combined with rising expenses, profits are down for the first half of the financial year by 19%.
  • Payroll expenses have risen 10.5% over the last 6 years, 3.2% in the last 12 months.

Concerns

  • The current trend will continue, resulting in financial difficulties for the business and the potential closure of non-profitable stores.

2. Reduce prices for food

The selling price for in-store and catering food menu items will be reduced. Beverage prices to remain the same.

Number of food menu items to be decreased, especially those with more costly ingredients and longer preparations times.

Staff hours to be reduced in the short term to reflect current decreased levels of sales.

Aim

  • To price match closest competitors.
  • To increase the number of items sold per day by a minimum of 5% with a goal of 15% across all food categories and hot beverages.
  • To reduce total expenses to 75% of total income.

Business performance data

  • Cost of goods for food is currently 31% of total income.
  • Cost of goods for beverages is 19% of total income.
  • These have both increased by 3–4% in the last 12–18 months.
  • Total expenses fluctuate between 77–83% of total income.

Questions

  • Number of sales required under the new pricing system to achieve current daily revenue figures?
  • Impact on revenue if increases in sales figures vary between the minimum (5%) and maximum (15%) goals?
Menu itemsCurrent price rangeAverage spendAverage No. of sales per day per storeCurrent average revenue per day per storeProposed price reduction
Breakfast options$6–$9$7.5076$57010%
Sandwiches bar wraps$8–$10$9.5096$91210%
Hot items$9–$11$10.0082$8205%
Sweet baked goods$4–$7$4.5045$202.5010%
Hot beverages$3–$4$3.85330$1270.500%
Milkshakes and iced coffees$6$615$900%
Packaged drinks$3–$5.50$4.5065$292.505%
Total revenue average per day per store$4,157,50
Total average revenue per annum all stores$6,069,950

3. Provide home packaged and meal delivery systems

The operational hours of some or all stores will be expanded to provide prepared, pre-packaged, take-home meals to post-work traffic and local residents.

Menu items for take-home meals will consist of chilled fully prepared, heat-and-eat or finish-at-home options. Three to four options will be offered every day with the menu changing daily and will include at least one vegetarian and one salad option.

A limited delivery service for hot and cold meals will be offered to local residential buildings based on the range take-home menu items. These meals will be delivered hot (or cold for salads), ready for immediate consumption.

Business hours of the stores will be extended from 4pm to 8pm.

All daily menu items will be prepared in bulk for all stores by the cooks in their current store locations (stores 3 and 4). Prepared menu items are transported to other stores prior to 5pm each day.

Aim

  • To expand the business into new markets.
  • To enter the packaged take-home and residential market and establish their brand before it becomes saturated with competitors.
  • To meet the needs of the steadily increasing CBD residential population.
  • To offer additional products and services to their existing customers.

Business performance data

  • Food wastage is currently 10%. Major category of wastage is hot food not sold during lunch service period.

Additional payroll costs per store for extended hours and delivery service

  • Each store selling packaged meals will require minimum one counter attendant for 4.5 hours at $16.50 per hour.
  • Each store offering home delivery would require a delivery driver at $17 per hour for three hours.

Questions

  • Most cost effective method of providing home delivery service to potential residential destinations from all stores?
  • Delivery costs if meals are delivered to all residential areas from Stores 3 and 4 only?
  • Potential revenue from the venture?
Delivery costs for home delivery service to targeted CBD and fringe residential areas
Residential Areas within delivery zones
Res Area 1Res Area 2Res Area 3Res Area 4Ability to supply
Store 1$3$4$5$430
Store 2$4$3$5$220
Store 3$5$5$3$375
Store 4$4$2$6$590
Potential demand20403030

Ability to supply = holding capacity of each store, not how many menu items are stocked.

Delivery costs for home delivery service to targeted CBD and fringe residential areas
Residential Areas within delivery zones
Res Area 1Res Area 2Res Area 3Res Area 4Ability to supply
Store 3$5$5$3$375
Store 4$4$2$6$590
Potential demand20403030
Res Area 1 = Carlton, CollingwoodRes Area 2 = East MelbourneRes Area 3 = North Melbourne and DocklandsRes Area 4 = Southbank

CoffeeVille proposed dinner service

Menu itemSelling price in-storeForecasted average spendForecasted demandSelling price – deliveryForecasted average spendForecasted demand
Hot menu$10–$15$1280$14–$20$17.50120
Cold menu$9–$12$10.5030$14–$18$1630
Packaged drinks$3–$5.50$4.5020$5–$8$760

Appendix 3

Risk management plans and business impact analysis

Risk management plans

Extract from CoffeeVille Risk Management Strategy Plan

L = Likelihood I = Impact P = Priority

Lw = Low M = Medium H = High

RiskRisk assessControlsMonitoringTimelinesResponsible
LIP
Emergence of a competitor within very close proximity.MMMContinuous implementation of marketing strategy to highlight key points of difference between us and competitors.Increased frequency of promotional campaigns.Selective discounting.Adjustment to marketing strategy to ensure differentiation and appropriate positioning of CoffeeVille in order to compete effectively.Continuous monitoring of competitors’ marketing campaigns.MonthlyRufus Belcastran Emma Belcastran
Food poisoning complaint/s from customers.LwHHContinuous monitoring of implementation of food safety procedures.Regular food safety refresher training provided to all staff.All new employees given food safety training if they do not have a food handler’s certificate.Continuous monitoring of food safety records and logs.WeeklyRufus Belcastran Emma Belcastran Store Manager
Changes to local customer demographicsMHMLimited ability to apply controls due to lack of ability to influence.Apply pricing, payroll, inventory and wastage controls to limit negative impact on financial viability.Expand services if changes are positive for business operation.Monitor customer formal and informal feedback.Monitor real estate movements and business statistics in CBD area.QuarterlyRufus Belcastran Emma Belcastran Store Manager
Changes to local economic environmentLwHMLimited ability to apply controls due to lack of ability to influence.Apply pricing, payroll, inventory and wastage controls to limit impact on financial viability.Monitor business and economic environment in catchment area.QuarterlyRufus Belcastran Emma Belcastran

Business impact analysis

Business impactImportance/ impactPotential losses – per store
Business risks1 = high5 = lowRevenueCostsStaffPenaltiesLiabilityReputation / good willTimeframe for impactLength of impact
Emergence of competitor3loss $500–$600 per day$500 pw marketingLoss 1–2NANANAImmediatePermanent
Food poisoning complaint2loss $500–$600 per day$2,000+Retaining costsPossible finesPossible court actionHighImmediateMinimum 6 – 12 months
Changes to local customer demographics3loss $200–$300 per day?$100 pw marketing + menu changes?Loss 1–2NANANA2 – 6 monthsDependant on nature of change
Changes to local economic environment3UnknownUnknown assumption higherLoss 1–2NANAMedium due to changes in food and service quality2 – 12 monthsUnknown do to lack of control
Reduced profitability due to increasing expenses1loss $100–$600 per dayUnknownLoss 1–2NANAMedium due to changes in food and service quality2 – 12 monthsUnknown due to lack of control

Appendix 4

City of Melbourne demographics

The following information are extracts from City of Melbourne Daily Population Estimates and Forecasts 2015 Update report.[1]

Population overview

The number of city residents is forecast to grow at around 3.2% annually during the next 16 years (from 2015 on), with more than 202,000 people calling Melbourne home by 2030.

The number of workers is forecast to grow at around 2% annually during the next 16 years, with an estimated 526,000 people travelling to work or undertake work-related activities in the city by 2030.

Weekday daily resident population estimates and forecasts

Living in the city continued to gain momentum over the past two years. It is estimated that more than 122,000 people – including under 15 years of age – resided in the municipality in 2014. This represents a 15.9% growth from 2012 which is an equivalent of 16,788 additional residents in the city. The top five largest growth SA2s (Statistical Areas Level 2) are:

  • The Melbourne CBD with 6,979 additional residents (up by 29.2%)
  • Southbank with 3,279 additional residents (up by 24.2%)
  • Carlton with 1,872 additional residents (up by 12.2%)
  • Docklands with 1,713 additional residents (up by 26.6%)
  • North Melbourne with 1,703 additional residents (up by 9.9%)

Total daily population estimates and forecasts

Municipality of Melbourne (all areas including CBD and fringes)

City of Melbourne, 2015, Daily Population Estimates and Forecasts, City of Melbourne, available online, viewed January 2016, <https://www.melbourne.vic.gov.au/SiteCollectionDocuments/daily-population-estimates-and-forecasts-report-2015.pdf>.

YearResidentsWorkers
2011100,000376,000
2012105,000380,000
2013116,000382,000
2014122,000386,000
2015126,000392,000
2016135,000397,000
2017137,000407,000
2018141,000418,000
2019144,000428,000
2020148,000439,000

Estimated Resident Population Growth Rates between 2004 and 2014 by SA2

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Appendix 5

Assessment questions

1. Briefly discuss how you ensure you have sufficient, valid and reliable evidence and information available to support determining the best course of action to take and making a final decision.

2. Briefly outline:

  • specialists or other relevant groups or individuals who could assist in your analysis and decision-making process
  • what types of assistance, advice or information they can provide.

3. a) Who has the authority to make the final decision about what course of action to take to address the identified business issue?
b) Why do they have this authority?
c) Do they have the legal authority to make this decision?

4. What organisational policies and procedures must be considered when making this decision?

5. Briefly describe how your recommendation to Emma and Rufus is consistent with CoffeeVille’s values, objectives and standards.

You have been given this project in early January. Emma and Rufus are aware that, depending on the course of action chosen, it could take some time to implement the necessary changes and have an impact in the business’s financial status.

They would prefer the analysis process and recommendation to be made as soon as possible – by end of February if possible. They have set end of March as the absolute latest timeframe for this project to be concluded.

Develop a basic planning timeline to present to Emma and Rufus, outlining timings for the identification, analysis and decision stages and a completion date for the resolution of the business problem or issue.

Appendix 6

Presentation of recommendation

Emma and Rufus would like you to present a summary of your research and recommendation. They wish to ask you questions during or after your presentation to clarify any details and discuss the impact of the recommendation on their business.

You need to plan and deliver a 10–15 minute presentation to Emma and Rufus on your analysis and proposed course of action.

  1. Prepare a business presentation in response to the scenario described throughout Assessments 1, 2 and 3. The presentation can be delivered as follows.
    1. As a presentation to your class.
    2. As a role-play to two course participants undertaking the role of Emma and Rufus, CoffeeVille’s owner/managers.
    3. As a presentation to your assessor undertaking the role of one of CoffeeVille’s owner/managers.
  2. Determine and prepare to discuss:
    1. A brief overview of the business issue and analysis techniques used to identify the issue, determine decision options and analyse the viability of potential courses of action.
    2. Reasoning for recommended course of action, such as:
      1. what data and information supports the recommendation
      2. advice provided by internal or external specialists or consultants
      3. how the recommended course of action is consistent with the business’s values, objectives and standards
      4. any identified risks.
    3. Deliver the presentation to Emma and Rufus. Ensure you deliver your presentation in accordance with deliverables outlined above and quality specifications listed at the start of this assessment.
    4. You may use communication tools to support your presentation, if desired. Tools could include written handouts, statistical graphs, analysis results, budgets, other financial information or a PowerPoint presentation.
    5. Obtain formal or informal feedback from your presentation participants relating to your recommended course of action. Formal feedback can be obtained by asking presentation participants to complete the presentation feedback form below. Informal feedback can be gathered from questions asked and discussions undertaken during the presentation.
    Presentation questionsThe following questions can be asked during or at the conclusion of the presentation by participants undertaking the roles of CoffeeVille’s owner/managers, Emma and Rufus.Alternative or additional questions can also be used based on the context and content of the presentation.
    1. Is this the only problem or issue CoffeeVille faces? During your research and analysis did you identify other possible concerns?
    2. From a financial perspective, which of the potential courses of action is the riskiest for the business? What do you base this opinion on?
    3. How will this decision affect our customers and employees in the short- or long-term?
    4. What timeframe do you recommend for implementation of this course of action?
    Presentation formatsClass presentationClass participants can be assigned specific questions prior to the commencement of the presentation or encouraged to ask questions and seek clarification on the information provided during the presentation.Role-playTwo participants are selected from the class to undertake the roles of Coffeeville’s manager/owners, Emma and Rufus. Questions asked by participants in each role should reflect each owner’s role within the operation of the business.EmmaEmma’s main business focus is marketing the business. She will be evaluating the information and suggested courses of action based on how it will affect the business’s brand and image, its impact on customers, how each action will either expand or contract their current market share.RufusRufus has been heavily involved in the overall operation of the business’s stores. He will be evaluating the information and suggested courses of action based on their impact on the business’s short- and long-term financial viability, including revenue, expenses, staffing. Rufus is keen to gain new customers while retaining their existing customer base.Assessor presentationAssessor can ask recommended questions or modify to reflect information provided during the presentation. Questions asked should seek clarification and encourage the presenter to discuss the presentation’s content.Presentation evaluationParticipants involved in role-plays and/or assessment of the candidate’s presentation can use the following criteria to assist in providing feedback.Did the candidate competently demonstrate the following skills?FeedbackUse appropriate language, tone and pace for a management presentation?Select an appropriate presentation style (level of formality) for a management presentation?Provide information at an appropriate level of complexity for its intended audience?Use appropriate listening and/or questioning techniques?Encourage discussion to clarify information, courses of action or recommendations?Use a variety of communication techniques or tools to share information?Presentation feedback formProvide formal feedback relating to any information, courses of action or recommendations made during the presentation.What feedback can you give the candidate regarding their analysis of the business issue, potential courses of action suggested or final recommendation?

Assessment Task 4

Disseminate information

Performance objective

You will demonstrate the skills and knowledge required to design, test and update systems and communication plans to disseminate information to the organisation.

Assessment description

Using the simulated business information provided, and in response to a scenario, you will ensure up-to-date, relevant and accurate information is documented and disseminated according to organisational needs, a communication plan and within legislative requirements. Information systems used to capture, document or disseminate information are designed, tested and updated to meet information requirements of decision makers.

Procedure

  1. Read the scenario information provided under CoffeeVille – your brief in Appendix 1.
  2. Review CoffeeVille simulated business documentation, including policies and procedures relating to communication, privacy and confidentiality of information to assist in understanding and managing information dissemination within the business. Coffeeville’s policies and procedures can be viewed online on Coffeeville’s intranet at <http://simulations.ibsa.org.au/coffeeville/secure/documents.php?>.
  3. Research management information and decision support systems based on the criteria established by CoffeeVille’s owners. You can use digital technologies to investigate new technologies and explore new ideas for the storage and dissemination of information.
  4. Prepare a report for CoffeeVille’s owners based on their specified criteria and requested content as outlined in Appendix 1.
  5. Prepare a communication plan for the dissemination of information within the organisation. The communication plan should maintain effective workplace relationships, help meet organisational goals, and ensure organisational policies, procedures and regulatory requirements are being met.

Specifications

You must submit:

  • a written report which meets all information requirements specified in Appendix 1
  • copies of relevant information you have researched about the management systems – please attach to your report
  • a completed communication plan.

Your assessor will be looking for your ability to:

  • organise, evaluate and critique ideas and information
  • build and maintain understanding of a problem of issue
  • develop and write complex texts using appropriate conventions and writing styles
  • ensure organisational policies, procedures and regulatory requirements are being met
  • monitor and review organisational policies, procedures and adhere to legislative requirements
  • use communication skills to access and share information and build and maintain effective working relationships
  • use digital technologies to manage business operations for strategic and operational purposes
  • use management skills to:
    • make high impact decisions
    • plan and manage activities that have implications for the whole organisation
    • work autonomously when making high level decisions to achieve and improve organisational goals
    • explore new and innovative ideas through analysis and critical thinking.

Adjustment for distance-based learners

  • No variation of the task is required.
  • A follow-up interview may be required (at the discretion of the assessor).
  • Documentation can be submitted electronically or posted in the mail.

Appendix 1

CoffeeVille – your brief

Emma and Rufus Belcastran have decided to expand rather than contract their business. They have chosen option 3 and are in the process of planning their new take-home and meal delivery venture.

They also feel that they would have identified their recent business issue sooner if they had access to better information faster. As a result, they have asked you to investigate management systems for their business.

The business currently uses the following computerised systems:

  1. Integrated food and beverage system:
    • Point of sale ordering system
    • Inventory control
    • Basic customer relationship management (CRM) system including customer database and loyalty options
  2. Accounting system.

System criteria

They have established the following criteria.

  • Capable of communicating or integrating with the existing food and beverage and accounting systems if possible.
  • Provides real-time updates of key data in an easy-to-read and understandable format. They identified mainly financial data such as sales, revenue and costs as their key data.
  • Capable of preparing some customised reports. Most reports they require are standardised formats.
  • Able to provide data and information that will assist in short and long-term decision-making.
  • Able to complete relevant statistical, sensitivity and quantitative analysis techniques such as those used to assist in evaluating the recent business issue.

Their overall goal is a system that will help them identify potential issues and make better, faster, more informed decisions.

They have no preferences about the type of system as they have not undertaken any research yet.

Report requirements

They want you to investigate and report on the following.

  • Types of systems that would be appropriate for their business.
  • The features and benefits of at least two types of management systems – how will they meet the needs of the business’s decision makers?
  • An outline of how the systems will optimise the efficiency and quality of information, its dissemination and the operation of the business.
  • A list of the types of information needed within the organisation, including who needs it, when, where and why.
  • A description of how database information will be retrieved and updated.
    • Will the new system replace the current database?
      • If yes, briefly outline database format, filing systems, data retrieval and manual or automatic updating of records
      • If no, briefly outline how will the new system access, use and update records in the existing database.
    • An outline of tasks that will need to be completed when designing and testing the selected management system to ensure it meets organisational needs.
    • A description of how the new management system will enhance security of the business’s data and intellectual property. Briefly discuss any changes that may be required to internal systems and procedures to enhance these security systems.
    • A brief description of the policies and procedures that will influence the management of change within the business.

Communication plan

To support your report they would like you to write a sample communication plan that outlines how details of the new take-home and meal delivery venture will be disseminated to employees and any relevant financial supporters (e.g. financial institutions such as banks, their accountant, investment or financial advisors, credit card providers). Make sure the communication plan meets legislative and organisational requirements for privacy and confidentiality of information.

A sample plan template has been provided in Appendix 2.

Appendix 2: Communications plan template

Title:
Date:
Project team:
Situational Analysis: SWOT
StrengthsList the organisation’s communication strengths.WeaknessesList the organisation’s communication weaknesses.
OpportunitiesList the organisation’s communication opportunities.ThreatsList the organisation’s communication threats.
ObjectivesList the relevant objectives, including relevant organisation-wide objectives and specific objectives for communication and consultation.
Goals and targetsList the organisation’s communication-specific goals and quantitative targets.
Audience analysis
Internal audience characteristicsList the organisation’s internal audience and stakeholder characteristics.External audience characteristicsList the organisation’s external audience and stakeholder characteristics.
Key messagesOutline key messages tailored to each audience.
Strategies and tacticsOutline strategies and tactics associated with the communications plan, including rationale behind media channels selected.

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