The Old Station Teahouse Analysis

Table of Contents
1. Introduction.......................................................................................................................................3
2. Meso Analysis.....................................................................................................................................3
2.1. Market Analysis...........................................................................................................................3
2.2. Competitor Analysis....................................................................................................................3
2.3. Digital Analysis...........................................................................................................................4
3. Macro Analysis..................................................................................................................................4
3.1. SWOT Analysis...........................................................................................................................4
3.1.1. Strengths..............................................................................................................................5
3.1.2. Weaknesses..........................................................................................................................5
3.1.3. Opportunities.......................................................................................................................6
3.1.4. Threats.................................................................................................................................6
3.2. PESTL Analysis..........................................................................................................................8
3.2.1. Political................................................................................................................................8
3.2.2. Economic.............................................................................................................................8
3.2.3. Sociological.........................................................................................................................9
3.2.4. Technological......................................................................................................................9
3.2.5. Legal..................................................................................................................................10
References................................................................................................................................................12
 1. Introduction
This report aims to do the Micro and Meso analysis of the Australian old fashioned food and
beverage shop, The Old Station Teahouse Analysis. It is known for its tranquil garden setting
with amazing food and beverage services (TheOldStationTeahouse.com.au, 2020). In the Meso
analysis, the overall market analysis will be performed along with doing competitor analysis
while SWOT and PESTL Analysis will be performed for Micro environmental analysis to
analyze the overall position of The Old Station Teahouse in the market.

2. Meso Analysis

2.1. Market Analysis

The Australian hot and cold drinks industry has recently witnessed tremendous growth because
of the increased interest of consumers into the vibrant coffee culture identity across Australia
(IBIS World, 2018). Since 2005, the drink and beverage market especially the hot drink and
coffee market has observed consistent growth with CAGR of approx. 13% in the last five years
only. This CAGR estimated to be raised by at least 7% for fresh coffee and 1.5% for instant
coffee in the next two years. Currently, the overall growth rate of the beverage industry
especially the hot drinks industry in Australia is approx. 4.5% with a total revenue share of USD
8 billion (Passport Euromonitor International, 2018).

2.2. Competitor Analysis

The Old Station Teahouse is one of the oldest coffee and event organizing service providers in
Mackay, Queensland, Australia. Since its foundation, several services have been added to is the
menu so the visitors of the area can be relaxed and enjoy a stroll around its special garden. Three
main competitors of The Old Station Teahouse in the area are Ocean International, Church on
Palmer and Northern Beaches Bowls Club (IBIS World, 2019). Somehow all of these three share
the same product and services to The Old Station Teahouse in the sense of organizing weddings,
high tea, and special events. However, Northern Beaches Bowls Club is one step further of all of
these and has a sports bar along with offering gaming features as well. So there is no doubt, all of
these three are direct competitors of The Old Stations Teahouse as just like The Old Station
Teahouse these are also offering the B2C and B2B services.
 2.3. Digital Analysis
Figure 1 below is showing social media stats of all four companies. From the figure it is clearly
evident, Northerns Beaches Bowls Club is leading in term of Facebook Likes/Fans followed by
The Old Stations Teahouse, Church on Palmer and Ocean International. However, in term of
Facebook Fans to People Check-Ins ratio, both Ocean International and Church on Plamer has
significant advantage on reset of the two as The Old Stations Teahouse and Northern Beaches
Bowls Club are unable to attract as many people as are fans on their respective social media
platforms

Figure 1: Social Media Stats

Northern Beaches Bowls Club

Ocean International
Check-Ins
Followers
Church on Palmer Facebook Fans

The Old Station Teahouse

0 2000 4000 6000 8000 10000

3. Macro Analysis

3.1. SWOT Analysis

SWOT Analysis is the most recommended strategic planning tool that can be used for The Old
Station Teahouse to identify what are its internal strengths and weaknesses and what are the
external opportunities and the threats it needs to overcome (Dälken, 2014). These are discussed
below:
 3.1.1. Strengths
These are internal potentials of The Old Station Teahouse that to some extent give it competitive
advantages or reasons for its existence. The main strengths of The Old Stations Teahouse are:

 Oldest coffee shop and event organizing

 Strong brand name
 Years of experience in the industry
 Increased YTD sales and expense on advertising
 Wide range of product options and event coverage
 The strong social base especially on the Facebook
 The low operating cost normally associated with these sort of businesses
 Strong competition but with limited competitors
 Great achievements and recognition at national and international level such as winning
The Mackay Region Tourism Awards
 Great and positive reviews on leading tourism recommending platform, Trip Advisor and
achievement of Certificate of Excellence (TripAdvisor, 2020)

3.1.2. Weaknesses
These are internal lacknesses or the areas still missed by The Old Station Teahouse that it needs
to considers

 No dedicated staff for advertisement and marketing

 Improper website maintenance and lack of frequent updates
 Weak SEO plan and not sufficient research on Google and other search engines
 Numbers of check-ins are not according to the number of likes and followers as
compared to competitors who have equal proportions of likes and check-ins.
 No paid advertisement on social media
 No frequent blog posting
 High risk for inventory spoilage
 Sales limited to a few local areas only
 No systemized business for providing detailed wedding planning services
  Improper exploration of other event management services such as sports, gaming and kid
zone
 No subscription based event organizing model

3.1.3. Opportunities
There are unexplored potentials available in the market that The Old Stations Teahouse need to
consider

 Café partnership with local food and beverages companies

 Online order booking and home delivery system
 The fast-growing industry as a lot of people like drinking coffee, enjoy hangout and
spend time with friends at coffee shops
 Tie-ups with other franchisees or companies for product promotions that will be more
beneficial for both customer and company
 Opportunity to expand in other areas of Australia especially in Auckland, Brisbane, Gold
Coast, Melbourne, Marian among others from where it is getting more likes and product
reviews.
 Introducing new flavors especially European and Americans styled beverages and
opening franchises in new markets can increase market share
 Highest spending by Mackay people with annual economic output of the area around
$17.451 billion (RemPlan, 2020).
 Demand for event planners and event management in the area
 Opportunity to provide services according to price, guest and services type ranges such as
marque, reception central, traditional wedding styles, etc. (Mackay.qld.gov.au, 2020).

3.1.4. Threats
These need the attention of the organization to avoid unnecessary issues

 Strong competition by competitors especially from the Northern Beaches Bowls Club
who is one step further of all of three competitors of The Old Station Teahouse and has
sports bar along with offering gaming features as well
 Availability of instant tea and coffees in the general market at relatively lower prices
 Changing market tastes and consumer preferences for more western products and events
organizing styles
 Chains/cafes with a strong presence on social media platforms
 Fluctuations in exchange rates and per capita income of people
 Decrease in sale due to COVID-19
 Poor or bad harvest of coffee and tea beans from the supplier can directly affect the
goodwill or product
 The economy of surrounding Australian cities can also impact the revenue stream of the
business
 Shift of consumer tastes from wedding halls to park weddings for wedding ceremony and
photos (Mackay.qld.gov.au, 2020)
 3.2. PESTL Analysis
PESTLE Analysis is the most recommended macro-environmental analysis tool used as a
component of strategic management. It considers the main external factors impacting or can
impact a business in the form of political, economic, sociological, technological, and legal
environmental aspects (Contributor, 2015). In the case of The Old Stations Teahouse, the
PESTLE Analysis is shown below:

3.2.1. Political
 Political factors have a direct impact on The Old Station Teahouse business as it imports
products from both local and international markets. Most of its tea and coffee products
are import from the lush and humid areas.
 The other important political factors that need to be considered in the coffee and tea
industry are trade agreements, import tariffs, and relationships with suppliers (WTO,
2020).
 Initiatives by the Australian government have promoted recreational and entertainment
activities such as tourism and camping have benefited the overall industry (IBIS, 2018).
 The regulatory and legal pressure within the Australian home market is also the main
factors. The recreational businesses like The Old Station Teahouse are now bound to
greater scrutiny to their business operations (Business.gov.au, 2020a).
 Taxation policy and employment laws in the country have been changing continuously
especially after the Coronavirus outbreak (Taxfoundation.org, 2020).

3.2.2. Economic
 The ongoing international economic recession due to fluctuating oil and exchange rates is
the main external economic driver for The Old Station Teahouse (CNBC, 2020).
 The rising labor cost across the country is also increasing operational costs
(Tradingeconomics.com, 2020a).
 The inflationary environment and market across the country and falling profitability of
businesses is also creating stress for businesses (Tradingeconomics.com, 2020b).
 In growing economies like Australia, consumers see coffee, wedding events and other
HiFi parties as luxury products that they can afford that let the businesses to sale
premium levels of products.
 Impact on local economy where coffee or tea is being harvested (Barchart, 2020)
 Consumer spending power at the regional level and demand for the product
 Fluctuating taxation and exchange rates across the globe
 Consumer confidence across Australia is increasing which was 99.565 in the year 2018
and projected around 104 in the next few years (Australian Consumer Confidence
Forecast, 2018).

3.2.3. Sociological
 The health consciousness trends in foods, beverages, and recreational activities are
increasing that demands from services like The Old Station Teahouse to provide
healthy and safe services (IBIS World, 2020).
 The demand for coffee and other caffeine-containing products sometimes get
decreased because quite often high caffeine means unhealthy drink
 The increased demand for decaffeinated and hygiene products such as ice creams,
cold beverages, etc.
 The trend of organizing events especially wedding events at banquet halls
 Fairtrade is another important socio-cultural trend that focuses on better
compensation of the service providers rather than giving too much profit to the
middleman (Business.gov.au, 2020b)
 The increased demand for online purchase as 54% of customers preferred online
purchase (Forbes Welcome, 2018)
 Customers are more demanding and curious than ever before (Dietrich, 2018)

3.2.4. Technological
 The most important technology trend across the food and beverage industry is
increasing concept of genetic engineering that means modifying production to
improve taste, yield, and other aspects ("Genetic modification - CSIRO", 2019).
 Smart event management with better qualities based on usage of the self service
system for events and store services (Atoji, 2016)
 The advent of new and specific event management and coffee specific appliances
such as drip machines, espresso makers and coffee grinders and availability of event
products at cheap rates can impact overall industry sale ("Coffee Machine – Coffee
Machine and Espresso Machine History", 2015)
  The changing trends in social media and digital media advertising such as behavioral-
based marketing and promotions (Ryan, 2014)
 New ways for enhancing input and output means different distribution methods
 Usage of smartphone apps along with QR codes to link the camera scanning directly
to the website or a specific product

3.2.5. Legal
 Low-interest rate is accommodating consumer spending power but the consumers
have still decreased sending on non-essential and luxury goods because of
discriminated discretionary income growth (Australian Industry Report IBIS World,
2018)
 As coffee, foods, drinks or beverages falls under health consumption so regulations
related to these are increasing in entire world jurisdictions
 Prepayment reduction of individual taxes and business taxes and VAT payment and
deferment payment system for consumption taxes by the Australian government after
the issue of Coronavirus (Taxfoundation.org, 2020).
 Mandatory closure of all type of business activities after the growing issue of
COVID-19
 Australian Consumer Law demands from service providers to make refund or
replacement if the product is of defective nature
 Australian Copyright Act (1969) has strict rules regarding usage of original
expressions either it is a blog post, picture, story or any other information
 The Competition and Consumer Act 2010 protect the undue competition in the
market and protects consumer rights
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