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Long term commitment in signage.Cost benefit analysis: 50 cafes per year, at $200 per café cost for each partner. 50 machines sold at $500 profit is $15,000 profit return for the year. Break-even after 20 cafes.Trend sales: 2007 - 2008: Decreased2008 - 2009: Decreased2009 - 2010: Increased2010 – 2011: Increased
Unstable.Financials: Not provided.Due diligence: Copies of other strategic alliance agreements have been provided.No statement of Financial Position from last tax return.No full personal contact details of all directors.Supporting data for trends, and cost benefit analysis have been provided.Overall Potential Assessment: lowJava EstateOrganization alignment: Sell quality Arabica roasted coffee beans to all states of Australia.Description of Joint venture: Java Estate provides MAcVille espresso machines to client for no-charge. Java Estate pays Macville cost price for the delivery and installation of the machine, and then pays the remainder of the purchase price on a 12-month repayment program.Strengths: Australia wide partner-100% committed to hospitality and coffee bean market.Weaknesses: Other coffee bean suppliers may not recommend Macville machines with this strong strategic alliance.Risk: Concern over the amount of money outstanding.Cost-benefit analysis: Potentially 200 machines installed in the first year. Interest costs $40,000 p.a. profit $100,000. Break-even after 80 machines sold.Financials:
Total Current Assets: $313,00Total Current Non-Assets: $308,500Total Liabilities: $176,500Total Owners Equity: $445,000Trend sales: Increasing constantly.Due diligence: Fully provided.Overall Potential Assessment: highSummaryMoving into the new Sydney market, where the bulk of espresso machines are sold each year, and from which a major (but ineffective) competitor has withdrawn.Other opportunities could be found in strategic alliances withcoffee bean suppliers, where market penetration could easilybe achieved and costs of advertising and service could be shared.There was also concern about the raising Australian dollar having a severe long-term impact on tourism, which was a major category buyer of espresso machines. Raising interest rates that are predicted for the coming years could impact negatively on the disposable income of coffee-drinking patrons.MacVille has been keen to pursue strategic alliances as part of its strategy to achieve its objective. It called for tenders from interested parties, who were asked to complete a tender application form that provided information relating to the tender requirements. Some notes have been included bysenior managers who assessed some of the information.
Task 3Strategies to achieve objectivesObjective 1.To sell and service MacVille espresso coffee machine in every state of Australia in next 5 yearsa.Sign, action and establish the strategic alliance agreement with Java Estate.