Brief description of the product
Coffee Beans are a consumer-based product with a greater import prospect in the Australian premises. In terms of Coffee production, the South Indian states (along with Karnataka) seem to dominate the Indian scene where almost 71% of coffee production has been done by the South Indian states. India has been known for the best producers of the Arabica and Baarbara Berry coffee seeds which have exhibited positive import characteristics in the Australian premises. However there are several governing competitors happens to dominate in the Australian quarters as coffee beans producer, considering the current market characteristics; it is very evident that Coffee beans have a greater prospect in the Australian market.
Internal and external factors that helps the marketers to manage demand
Internal factors that might affect the import of coffee beans in Australian premises can be deduced from the analysis of strength and weakness of the product in the underlying quarters. Furthermore, the outcome of the core competence analysis also appears to be fruitful in order to identify the market demand and prospect of coffee beans in the international quarters.
The core competence of coffee beans production in India is the fact that they have only focused on the mass production of Arabica and Baarbara Berry due to relative ease they avail in terms of growth in the southern parts of India (Fanet al.2016). However, though Brazil and South America happens to be considered as the major producers of such kind of coffee beans and has been an established name in the import of coffee beans in Australia. In this regard, it needs to be mentioned that almost the entire growth of coffee seeds is constrained in the southern part of India which is a major advantage for India to produce Arabica and Baarbara Berry in the Australian premises.
In terms of deciphering the external factors or conduct the external audit, it is imperative to exercise the globally acknowledged tools for analyzing the external environment of every business.
Macroeconomic factors and PESTLE
In order to identify the major factors of external environment that might pose a significant impact on the macroeconomic factors, PESTLE analysis can be conducted.
Political: In terms of deducing the political factors, it is imperative for the current entity to consider the fact that Australia has a relative political stability which has endowed the import business of Australia with relative peace. Apart from that, the principles of cross-border trading, after the embracement of liberal economics in Australia, happens to be enhanced due to the generous policies proposed by the Australian government (Deng and Yang, 2015). Furthermore, the emerging and gradually increasing demand of coffee in the Australian markets have enabled the respective unit to compromise with the possible political turmoil in Australia.
Economic: Though the import business of coffee seeds in Australia is chiefly governed by Brazil, Colombia and Ethiopia, it has been seen that there exists considerable economic prospects of trading coffee in the Australian premises. In this regard, it needs to keep in mind that, as the comprehensive study conducted by Wang andShailer (2015) seems to suggest regarding the analysis the market of coffee in Australian premises, the market have been discovered with the first traces of crowd market. Thus, this will be economically advantageous for India to penetrate the underlying market with a comparatively cheaper rate. Furthermore, as an inevitable outcome of crowd market, the switching costs will tilt in favor of the customers and India has the possibility to avail those against nominal financial effort (Wang and Shailer, 2015).
Figure 1: PESTLE Analysis
(Source: Pike and Page, 2014)
Social: Scholarly researches on the Australian import market happens to suggest that the Australian society is still struggling with the habit to consume coffee as Argentinean-import tea-analogues and herbal drinks are the major drinks that they prefer to be associated with. In this regard, the social momentum and cumulative consideration regarding the import of coffee happens to endow the business with considerable turnover. Furthermore, the Australian government happens to consider the import of coffee can be a cheap and feasible alternative which can reduce their excessive dependence of tea imports upon China.
Technological: Since the technological factors appear apparently trivial in the course of discussing the import business of coffee seeds in the Australian premises, it is farcical to consider this element of the macro-environment with such importance. In this regard, it needs to be mentioned that seeds crusher (more customized) is required to process those coffee seeds while to prepare ground level coffee (Grant, 2016). Thus, introduction of any of the governing technological expertise might assist us to cope with the emerging aspects of the import business of coffee seeds in the Australian premises.
Legal: The international trade practices of Australia are supposed to be governed by the Australian government and, in collective terms, it appears beneficial for the import entities to do business in the Australian quarters with generosity. Furthermore, the Australian government appears quite generous in terms of imposing several generous legal policies that might help the import business to establish their ventures in the foreign quarters.
Environmental: The notion of environment and associated aspects of environment also appears trivial in this case since the import business of coffee seeds has nothing to do with the aspects associated with the imports that can impart considerable environmental harm in the society. Furthermore, the construction of the import business has nothing to do with harming the environmental tranquility prevalent in Australia (Pike and Page, 2014).
Natural and Physical
Natural: In terms of nature, the idea of coffee import supposed to cater the demand of coffee by forwarding national coffee seeds freshly imported from India. In this regard, it needs to be mentioned that, the encouragement of the import business of coffee seeds in Australia do not embark on the natural aspects associated with the governing aspects of the globe.
Physical: A considerable amount of physical competence is expected from the coffee seeds dealers from India since they can also be the in charge of the warehousing of the coffee seeds which, in respect to the other aspects, can enable the Australian entity to cope with the impediments prior to supply properly.
In terms of importing processed coffee in the Australian premises, India has been able to acquire a profit of 14.3 million USD in the last fiscal year of the previous month. In this regard, in terms of projected cash flow, no significant financial prospect can be discovered out of that. In this regard, it needs to mention that, the import of coffee seeds and constant assistance of processing might endow the respective import business with a competitive financial edge since it has been considered as the encouragement of the Australian local exporters regarding their training to cultivate the coffee seeds in their own quarters. In this regard, most of the evolving entities prior to coffee seeds production of Australia have tried to establish their notion on the grounds of financial futility.
Figure: Ecosystem of demand
The flow of information and the desired seamlessness out of that can only be accomplished if the associated aspects of governance while the unity of business administration would sync in the same pace. In this regard, the entities are required to frame their apprehensions on the consideration that, in most of the cases, have transformed into the fleeting aspects which needs to be considered while carrying out the info flow prior to the business practices.
In terms of product flow, it needs to be mentioned that, in most of the cases, the notion of product flow happens to be dependent upon the governing territories that needs to transform into fertile grounds (Aizenmanet al.2016). In this regard, it needs to be kept in mind that any trivial hindrance of product flow might cause considerable penetration of the globe while enabling the respective country to cope with the pertaining aspects of product collaboration (Sharifet al.2015). Furthermore, it also needs to be remembered that, in most of the cases, the coping capabilities of the governing ideas should depend on the flow of product which might enable the respective business to flourish.
In the course of embarking into the competitive analysis of the respective market residing in Australia, one thing needs to be kept in mind. The most dominant coffee importer in the Australian market is Brazil where as Colombia and several other South American countries have attempted to combat with Papua New Guinea, Vietnam and Ethiopia respectively. In terms of import and the corresponding amount that they has been able to manage, a table can be constructed which might look like the below;
Country Import (average up to 2017)
Brazil 53.6 m USD
Colombia 32.5 m USD
Papua New Guinea (PNG) 28 m USD
India 16.8m USD
In this regard, Brazil, Colombia and PNG can be considered as the three major competitors of India to avail considerable profit from importing coffee seeds to the Australian quarters. In this regard, it can also be declared that, due to the initial establishment of these companies in the Australian premises, the market penetration will be in favor of the entities who are attempting to consolidate in the Australian market.
Desired problems and solutions
The major problem that can be aroused from the aspects of discussion (regarding the import business of Coffee seeds by India in Australia), is the fact that the underlying market is quite saturated already where the first traces of crowd market is also evident in that. Thus, though it will help the respective business idea of coffee seeds from India with relative financial edge prior to market penetration, the diluted switching cost can prevent them to sustain in the underlying market (Fogli and Perri, 2015). Furthermore, in terms of the bargaining power of customers, which, in accordance with Porter’s five governing force, will always lie in the favor of the customers and simultaneously affect the underlying business.
It is evident from the cumulative performance of coffee imports in the Australian markets that, in most of the cases, the governing players of the business is supposed to deal with processed coffee. In this regard, it needs to be mentioned that, the sales of non-processed coffee seeds are quite rare and on the verge of emergence. Furthermore, the coffee seeds are supposed to deal with the governing aspects of the underlying society and encourage the respective market to flourish under the same market.
Gap of new product
The gap of the product is analogous to the gap prevalent between processed coffee seeds and unprocessed coffee seeds (Kim, et al. 2015). In terms of the local quarters, it has been seen that, the Australian market has not been able to earn the proficiency to process the coffee seeds properly. This can create a spectacular gap and might impact the import sales in the Australian premises.
Recognizing changes in demand environment
The alteration of demand in the underlying market is based upon the aspects of emerging segments. Australia has been already established as a governing importer of coffee. However, the recent changes that have been recognized that the emerging markets seem to seek fresh coffee seeds in order to customize imported seeds considerably. This alteration in the import pattern will obviously impact the demand environment of coffee seeds in Australia.
Estimated demand in 2 years
In accordance with the current scenario of the market, the demand appears to be driven by the quantification of domestic demand of raw coffee.
Figure: Estimated demand in 2 years
(Source: Kim, et al. 2015)
The figure illustrates the scaling up of the demands of the quality of the coffee products broken down into different factors like the Fragrance, Quality, Brand Image, Price Affordability and packaging being the most significant aspects. Thus, it is evident that within 2 years the demand can drag up Indian import of coffee seeds while trailing one of their competitors behind.