BSBINM601 Manage Information And Knowledge

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 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

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?

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?

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

CoffeeVille proposed dinner service

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

Business impact analysis

Appendix 4

City of Melbourne demographics

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

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)

Estimated Resident Population Growth Rates between 2004 and 2014 by SA2

Source: ABS, Resident Population Growth, Australia 2004 to 2014 (cat. no. 3218.0)

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.

3a) Who has the authority to make the final decision about what course of action to take to address the identified business issue?

3b) Why do they have this authority?

3c) 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.

6. 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 questions

The 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 formats

Class presentation

Class 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-play

Two 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.

Emma

Emma’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.

Rufus

Rufus 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 presentation

Assessor 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 evaluation

Participants involved in role-plays and/or assessment of the candidate’s presentation can use the following criteria to assist in providing feedback.

Presentation feedback form

Provide 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?