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Sydney is the largest city in Australia with a population of 22,000 in central area and 4 million people in greater Sydney area. It is situated on Australia’s south-east coast and is one of the most multicultural cities in the world and is a major destination for immigrants to Australia.
1.2 The Product – Kluang Station
Kluang Station is known as the Coffee Shop Canteen. Going abroad for further expansion and growth for the first time may be challenging as there are limitations to it. The existence of rules and regulations for venturing into the Australian food and beverage market require that they be critically looked at as it is crucial for Kluang Station to understand and abide them.
2.0 Market Audit
A recent international comparative study, Doing Business in 2008, found Australia has the ninth most business friendly regulations in the world, this means that the regulatory environment in the economy is conducive to the operation of business.
The government and regulatory institutions are reliable, transparent, impartial and internationally competitive, thus providing investors with a safe and secure business framework.
One of the main issues to be discussed is the concern of the political risk within a country. In this case, concerns of the possibility that political decisions such as expropriation of profits, events such as wars, terrorism, and insurrection in the host country will negatively affect the business climate.
Three political parties dominate the Australian political system:
The Liberal Party (LP) nominally representing urban business interests, and its smaller Coalition partner.
The Nationals nominally representing rural interests are the more conservative parties.
The Australian Labor Party (ALP) – nominally represents workers, trade unions, and left-of-center groups.
All political groups are tied by tradition to welfare programs. Over the last decade, Australia has increased assistance to families while imposing obligations on those receiving unemployment benefits and disability pensions.
Australia’s legal system is based on the English System of legislative statutes and common law similar to that of Malaysia. Therefore, depending upon the type of investment proposed, an overseas investor in Australia would need to have regard to the laws and regulations of one or more of the Federal, State, Territory or Local Governments. With regards to the opening of Kluang Station in Sydney, the Federal Government has power in most areas concerning the national economy including income tax, exchange controls and foreign investment in corporations and land assets.
Australia has an enviable, strong economy with a per capita GDP on par with the four dominant West European economies. Healthy business and consumer confidence and high export prices for raw materials and agricultural products are fueling the economy, particularly in mining states.
According to the data and products produced by the Australian Bureau of Statistics (ABS) the current unemployment rate is 4.4 which are known to be one of the lowest rates in the world
Australians are very direct in the way they communicate, There is often an element of humor, often self-deprecating, in their speech.
English is the national language. Australian English is a major variety of the language, with its own distinctive accent and vocabulary some of which has found its way into Standard English. All documentation are written in English, these make it easy for Kluang Station to venture into Sydney.
With the emphasis of multiculturalism, many other cuisines have influenced the Australian food culture such as the Asian foods formerly brought up by the settlers.
A combination of world-class information and communications technology (ICT) is adaptable across all Australian industry sectors providing an excellent environment for investors. E-readiness is a measure of a country’s information and communications technology and the ability of businesses and consumers to use ICT to their advantage.
One benefit of this is the application of mobile technologies. The service industry, more specifically restaurants, has initiated exploiting the benefits of mobile technology. For instance, the benefits of using personal digital assistants (PDAs) in a restaurant have been explored. The findings indicated that the use of such technology has increased efficiency and accuracy, speedier service, better usability, and enhanced reputation.
Sydney has a world class telecommunications infrastructure. Australian domestic networks consist of fiber-optic, wireless, and satellite system. Fiber-optic cables are the predominant technology allowing speedy internet access.
Sydney is well equipped with public transport ranging from buses, taxis, to monorails and trains. There are also catamarans and ferries that ferry people from the main island to Manly Island located across Sydney harbour. Besides that, the airport is located close to the city, about a half an hour drive by motorway.
3.0 Target Market
The restaurant’s target market will consist primarily of local residential customers ranging in age from 21 to 45 and local businesses. The main customers to be targeted would be office workers and tourists. This is due to the fact that most children would be at school and family outings happen on weekends as parents and children are free from obligations.
Below are the objectives that are to be achieved via the marketing plan for Kluang Station’s expansion into the Australian food and beverage market:
i. Expand the market for local Malaysian delicacies such as “Roti Bakar”, Hainanese chicken rice, Ipoh White coffee and “The Tarik”
ii. Expand the growth potential of Kluang Station by venturing into a new international market.
5.1 Mode of entry
First step for going global, Kluang Station is aware that price becomes increasingly important as a competitive tool. The manager is responsible for setting and controlling the price of the goods and services provided. In Kluang Station, the prices of food and drinks served are in about the range of $2 to $15.
5.3.1 Customary Mark-ups
There are costs that will be incurred in the business that will lead to increments of the pricings. The main costs from the fixed rate include the renting, utility, and electricity of the restaurant in Sydney. Also, the charging of labor, that costs AUS$5 per hour.Part of the government regulations, Kluang Station must comply with the application of GST (tax charges) on total items sold.
Kluang Station will be located at Newtown NSW. The reason this particular address was chosen was due to the reputation of the street. Locals know it as a dining area that offers a variety of different foods to cater to any palette.
It will be fitted will old “kopitiam” furniture; wooden stools and chairs, marble top tables, which will be flown in from Malaysia. To add to the ambiance, old Chinese opera music will be played softly in the background.
As there are many forms of advertising in Australia, Kluang Station would take this advantage to become recognize in the market. Since they are new in the market, Kluang Station would want to be established however within their planned budget. One way to advertise the existence of Kluang Station is through newspaper as it is one of the lowest costs for advertising. Since the target markets are potential drivers in Sydney, this could be the best way to reach to them.
5.6 Human Resource
Kluang Station will need to employ several workers; cooks,
waiters/waitresses, cleaners, cashiers, a manager, and two supervisors. Hiring
will be done from the local community by taking out an advertisement in the
local paper and using local job placement agencies.
5.6.1 Employer-employee relations
There are employer employee agreements whereby this is registered with the Western Australian Industrial Relations Commission, covering an employee’s working arrangements, pay and conditions. The employer employee agreements have been designed to provide appropriate protections and choice for both employees and employers.
5.6.2 Salaries and benefits
Working in Australia gets the benefit of a flex working time. The salary of every employee is in proportion to their work loads. It seemed to have been above the standard scale and this is why many seek to land in the Australia shores. Aside from the filthy competitive salaries and benefits, they can enjoy luxurious fringe benefits.
6.1 Five year financial project and assumption
The following pages showcase the budget profits/ lost statement and estimates projected income statement. Based on our assumption, Kluang station will be making a profit throughout the 5 coming years
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