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Macville Coffee Case Study: A Brief Analysis Of The Risk

Question

Review the simulated business’s risk management processes in followed in MacVille Coffee Case Study along with draft report to the CEO.

Answer

Executive Summary
In this macville coffee case studygiven below a brief analysis of the risks associated with the further augmentation and the expansion of Mac Ville Cafe to a new location of Toowomba store. After several meetings conducted by the head of the Mac Ville Cafe with the owner of the shop and by the confluence of it, many risks are identified in it. A section of this macville coffee case study consists of an email composed for the stakeholder and a summary of the meeting conducted with the CEO of the company.

Introduction
The CEO of the company had further plans to expand his company to Toowomba store and as per his instructions the current manager reached the store in order to observe and validate the mode of operation and management carried out by its competitor Hurley’s cafe by consulting to the manager of the store, James Mansfield and the owner of the property, Ron Langford. By their comments and analyzing the situation, it was evident that it is very important to plan the establishment and expansion of a company in a dedicated way by studying the nature of the environment and other factors by analyzing the gathered information. The preparation of this report is being done by keeping in mind the guidelines provided by the CEO and throws light on the way in which the current cafe operates in the shop and the risks faced by it while it has expanded its branch to this shop.

The management of Mac Ville has a proper realization that in order to carry out proper management of goods the risk management is very substantial. The company follows the strategy to evaluate the risk factors and thereby managing it in order to provide the customer with the best service. A detailed analysis of risks is being carried out in this report in order to assess and identify various risks in an efficient and accurate manner.

Validating the efficacy of the MacVille Risk Management Framework
For the smooth and fluent functioning of the operations and to deliver the customers with premium services, risk management framework plays a significant framework. In this system of framework many elements of operations, commerce, finance, and the risks are validated and a strategic plan is drafted according to it.

The risk management framework of the Mac Ville is been drafted in a very specific way and listed below. It throws light on various risks and hindrances which may occur in the progress of the company.

  1. Methodologies and the procedures followed in the processes: In order to keep the internal functions of the company under control, the risks involved in this area is assessed. The steps in this section of risk analysis involve the various policies adopted in the Department of Human resources. Validation of laws and regulations regarding travel policies, payroll policies, safety at the workplace, harassment at the workplace, etc comes under this section.
  2. The process of monthly reporting: In order to avoid any hidden problems or irregularities, the management team of the company usually holds a periodic monthly meeting and device a way to undertake some effective measurements. The members of the Board are provided with an updated and detailed report regarding the issues to make them aware of all the raising risks and remedies for them
  3. Annual budget and planning of the business process: An annual budget plays a very significant role in drafting the financial policy of a company. After announcing the annual financial report the board directors draft and pan various aspects of the budgeting plan and prepare some strategies in order to guide the company in the course of its goals.
  4. Examining the risk management: The Board of the company is being informed about the internal controls by the committee of Financial Audit and Risk Management (FARM). FARM manages the job of observing and carrying out the risk management in an efficient way. The FARM reports directly to the CEO of the company about the current status of the risk management situations and the CEO transfers this information to the Board of Directors. The FARM committee also supervises the audit conducted both internally and externally which poise the committee the best body to advise the Board regarding the suitable ways to control the internal management. The committee also advises the board of control on how to draft new strategies in order to run the business in an efficient way.
  5. External Audits: The financial management is given an extra focus by the Macville company and thus an external agency is hired to conduct a systematic and periodic audit. Since the audit is conducted by an external agency there is very less chance of any discrepancy or abnormality. The results of the audit conducted are forwarded to the officials like the Board of directors, senior managers and the CEO of the company for review.

This idealistic framework adopted by the MaVille cafe avoid any discrepancy or glitches. Even if any problem arises in the process this framework allows the implications of the solution in the best way possible. Before installing a new store in the Toowomba the policies of the company were considered and better analysis of this was done to locate the risks which may hinder the progress of the company.

Analyzing the extent of risk management and the role of new manager of Toowomba store
The Hurley’s cafe which is currently operating in the shop is going to be taken over by the MacVille company. The management of the company is focusing on tracing out the risks involved in expanding itself to the new shop. This will help the company is forecasting the risks earlier and thus prevent the company from any performance hindrance. The MacVille has already drafted a basic outline from the initial analysis and already is alert about the possible hindrances in the company’s progress.

The governing committees and the board of the MacVille believe that the main factors influencing the risk are the management of project, finance, organization, and governance. Many guidelines are being included in the company policy which covers all the estimated risks which are potential.

The meetings were scheduled among the new manager of the company with the current manager of Hurley’s cafe and the landlord. The new manager was entailed with the job of tracing the risks and dangers hidden in expanding the company to a new place. He has to give a report on a periodic basis about the analysis to the CEO so that suitable steps should be taken in the future.

The current manager of Hurley’s cafe, James Mansfield, has given some significant information about it and it contributed a major portion in the report submitted to the CEO.

The major problem encountered while conducting the meetings was the long distance between the Toowoomba and Brisbane. The driving distance between the destinations is too long and it caused a large delay in reaching there. The selection of the new manager was done properly as the person is responsible for all the activities undertaken in the initial risk management. The problem of the distance and travel time was being managed by the better management of the time. The way to the shop used to be blocked by the traffic of trucks which also posed a hindrance in carrying out the activities systematically. To remain in the competition it is very important for MacVillle that it should provide fresh food products to the customers. This became a new challenge to the company since the travel time was the minimum of 4hours and in the case of any traffic jam, it extended to more than 6 hours. This problem was resolved when the current store installed the new facility for providing freshly baked products within 30 minutes. The Hurley Company is not having any agreement or contract with the operators of the newly installed facility. This step is very significant as the MacVille company is a global company and larger as compared to the Hurley and there should be no any hindrance in the process which will result in a great loss to the company. The supply of water is very crucial for the MacVille Company. It has been observed that the average consumption of water per week by the store is approximately 41500 liters. The MacVille Company consumes much more water than the current consumption. As the current mechanism supports only to the limited amount of water consumption the company needs to upgrade the water distribution mechanism in the store. According to the new requirements, the company should install a dual flush in the system which apparently cost $7500 to the company.

Another major mater concern for the company was the management of cash. There was no safe facilities or amenities provided in the store for keeping the cash in safe custody. It was being informed by James that there is a high probability of cash being stolen in the store, which posed a great risk to the company. The MacVille Company have to endow a portion of its budget to install a suitable cash registry system in the shop. Most of the furniture and other amenities of the shop were timeworn and needed an urgent replacement.

There is no provision provided forth health and security in the shop. The MacVille Company is very concerned about the wellbeing of their employees and thus need to install a good mechanism for this purpose in the store.

SWOT
Below is provided the SWOT analysis of this macville coffee case study

Strength: The most significant potency of moving to the new shop is the significance of its location. The new shop is located on the intersection of two main streets. This spot possesses high traffic and is an apt location to attract customers. The location has great accessibility because of the high availability of public transport which will eventually help the customers to the location without any difficulty.

Weakness: The main weakness in moving to the new location is traffic jam created by the heavy traffic of trucks in the path.

Opportunity: As per the information provided by the landlord of the new shop, there is a great scope in starting new branches in surrounding premises. By using the demographic details of the area it was inferred that the population of the region is increasing and have a great purchasing power. This will ensure the company with a large group of customers which will aid in boosting the profit range. In addition, the government has promulgated an ordinance by which the café groups can afford and expand their own pathways and occupy them with additional chairs. This law will act in favor of the company and provide new opportunities for the growth of the company.

Threat: In a brief overview of the scenario, it was observed that the company is facing two major threats. The first threat which will affect the operation of MacVille Company is the law regarding the excessive use of water. The local government has planned to levy $50000 fine for the charge excessive use of water and will implement this law as soon as possible. It is recommended that the company should install and use new technologies to minimize the use of water in a new place. The second threat is regarding the exponential increase in the competition from rival companies. Many of the companies have already established their branches in the area. This will create fierce competition in the region and make it hard for the company to sustain.

PEST
Below is provided the PEST analysis for this macville coffee case study.

Political

The local government of the Toowomba has promulgated some ordinances which will assist the company in expanding its business.

 

Although the new regulation regarding the overuse of water is a setback for the company. The company should adopt new technologies in order to overcome this problem.

Economical

Although some of the infrastructures and amenities present in the new store are old, they can be reused which will save a lot of money for the company.

Social

The place where the company is planning to expand was previously occupied by Hurley company. This circumstance will help the company since many of the customers will prefer to come to the same location.

Technological

The company has to put aside some fund in research and development. The company is facing many risks because of government laws and other risks. Installing advanced technology is the only solution for this circumstance.

Copy of Email sent to the stakeholders
As a part of conducting this analysis, an email was sent to all the stakeholders of the company making aware of them about the risks and hurdles in expanding the company to a new location, Toowomba..

To,
The Stakeholders of MacVille Company,
Brisbane

Subject: Risks regarding expanding our business to Toowomba

Dear Stakeholder,
We are hereby informing you that the company is going through rigorous expansion and has planned to start a new branch at Toowomba. We have conducted a very detailed analysis of the risks of moving a new branch in the region. We have come up with many substantial risks which may require substantial attention to overcome. We recommend you to get the detailed information from the management MacVille so that you will make yourselves updated with our decisions and adopted policies. We are expecting a great contribution and cooperation from you by providing us advice so that we can keep serving you in the best way possible.
With Regards,
The Manager
MacVille Café, Brisbane

Summary of the meeting with CEO
The CEO of MacVille has been informed with the new issues and risks in establishing a new branch in Toowoomba. Below are provided the substantial points precise abstract from the meeting.

  • Crucial issues and risks were recognized.
  • The CEO was provided with the brief description of the scenario and they were validated and assented by him.
  • Discussed about the steps we have already taken and planning to commit.
  • The new manager was provided with full authority and mandate to take control of the situation and thereby find the way to resolve the problem.
  • It was planned to commit more investigation to find other hidden risks and take actions appropriately.

Stakeholders

Stakeholders

External/Internal

Role

Process under Stake

CEO

Internal

Overall procedure of the expansion is supervised by him.

Achieving the target of expansion in Toowomba location with minimal risk.

Manager

Internal

Ensuring that all the processes in undertaken in the store are done properly.

Safeguard that the profit range gained from the new store is high.

Investors

External

Contribute in the development of the company along with making profit.

Make maximum profit from the shares they have invested in the company.

Suppliers

External

Continue with the supply of raw and processed products in order to maintain the daily business.

Making the MacVille their long term partner in order to ensure boost and stability in the income

Workers

Internal

Contributing their maximum effort in day to business of the company and provide the customers with the best service possible.

Continue and ensure their position in the company and thereby create stability in the income.

Customers

External

Get their preferable product of the company and thereby contributing to the revenue of the company.

Get the best products and services available in the market

Shareholder

Internal

Collecting the maximum number of shares

Expecting growth in the company thereby getting more dividend from the shares.

Conclusion
In this macville coffee case study, it was observed that there are certain issues in opening a new branch of MacVille in Toowomba. All the risks observed in this macville coffee case study are being informed to the higher authorities and the CEO of the company. The appropriate actions would be carried out by the new manager under the supervision of the CEO. Macville coffee case study assignments are being prepared by our management assignment help experts from top universities which let us to provide you a reliable  university assignment help service.

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