The concerns of the group were centred on a global

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The concerns of the group were centred on a global corporation Nufix Inc. shifting from instant coffee into the espresso bean and machine market. The resources they would have at their disposal in marketing, finance and human resources could be a serious threat to MacVille’s plans. However, they would still struggle to gain a foothold in a market that already has strong supplier/buyer allegiances, with most stretching over many years. Global players like Nufix Inc. have difficulty being adaptable to the needs of niche market buyers. Another competitor of note was BeanEx, a large coffee bean supplier that had recently started importing espresso machines for their customers. There was talk of them selling the espresso machines as wholesalers. They certainly had easy access to markets with their coffee bean trade, but they had no established service arm to help wholesale clients maintain the machines that they purchased. MacVille has been keen to pursue strategic alliances as part of its strategy to achieve its objectives. 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 by senior managers who assessed some of the information. Tender submissions Three submissions are attached to this case study. 1. Business name – Home Espresso Trades 9 | P a g e
Description of business (include vision, etc.) – Selling consumer home espresso machines to the home market, only in Sydney, and incorporating other digital home entertainment products. Description of joint venture – Shared space in four trade shows per year. Venture: Strengths and weaknesses – Strength: covers the consumer market for espresso machines (that compliments the commercial espresso machines) to make a full range offer to clients. Weakness: in working with a strategic partner who is not solely focused on the hospitality industry. Venture: risks 1. Partner not fulfilling their financial commitment. 2. Association with a non-industry partner may have a negative effect on our customer base. 3. Partner access to MacVille’s trade secrets. Venture: Cost-benefit analysis – Costs of the shows is $2,500 each. Four shows costing $10,000, selling 10 machines per show at $500. Profit for each would see a profit of $10,000 for the year and a breakeven after two shows. Venture: Financials – 10 | P a g e
Venture: Trend analysis – Sales 2007 – $1.0m 2008 – $1.3m 2009 – $1.5m 2010 – $1.6m 2011 – $1.6m Able to provide access to due diligence materials? Copies of other strategic alliance agreements? YES NO Statement of Financial Position from last tax return? YES NO Full personal contact details of all directors? YES NO Supporting data for trends, and cost benefit analysis? YES NO 2. Business name – Ambrosia Coffee Roast Description of business (include vision, etc.) – Sell all grades of coffee bean to supermarkets and hospitality outlets around Australia.

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