MKT 5000 MARKETING MANAGEMENT

Assignment 1 Semester 1 July 2011

Prepared by: KEDAR CHAVAN Student number: U0061023717 Th Date submitted: 26 August 2011

Executive Summary
Biosystems Engineering Pty Ltd was incepted in year 1999 under the proprietorship of Richard Sulman and further registered in year 2008. It was developed to significantly improve the way todays working of environmental projects and issues. With the ever increasing concern for environmental problems their product and services offered tremendous advantages to local environment. Biosystems Engineering Pty Ltd will be positioned as high-end disseminators in engineering knowledge to solve systems problems in agriculture, food, forestry, natural resources and the environment. There is currently no other company that produces and serves this type of management features they developed. The potential market for the product and services is very promising. Biosystems Engineering Pty Ltd has executed over 36 major projects and currently working on the worlds first Short rotation woody crop (SRC) harvester. The Management Team members have strong backgrounds in project management, manufacturing, research, analysis, designs and software development. The Australian market continues to have an increasing number of eco-friendly firms looking to enter the market. It must be aware of competition on all levels and maintain its operational performance if it is to retain its status as the worlds first inventor of SRC and its specialty in providing its services and products. The companys focus on agricultural, food, forestry, water and energy sectors is consistent with the market segment. The current product and service mix is in line with the industry and market forecast. Continual product review, particularly in renewable source of energy and for additional sources of revenue is needed to

increase sales and sustain their competition. The current product line would be improved through a more regional perspective on consumer demand. The company has protected itself from the volatile market by offering a numerous services and technological support and could use service advantages to tackle its competitors. Customers views Biosystems Engineering Pty Ltd as an excellent skill in engineering design with high quality and honest support to the projects from a value perspective rather than a price perspective, consequently commercial benefits could be increased. An aggressive advertising would be required to reduce the risk of competition and a slumping Australian market. Additional marketing would expand awareness of new programs, generate interest in recent promotion efforts such as biomass energy, and lead to increased sales of its products and services. Taking advantage of the companys significant social contributions would increase global brand image. To keep competitors from entering the Australian market, the use of non-traditional methods of expansion is suggested. The declining policies for renewable source of energy from biomass in Australian market and growing global market should shift marketing focus on overseas markets. Asia and Europe represent majority market for renewable source of energy. To maintain Biosystems Engineering Pty Ltd position as the premier purveyor of the finest Biosystem Engineering in the world, a doubling of efforts toward overseas markets in Europe & Asia is warranted.

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Table of Contents
Executive Summary 1 2 INTRODUCTION ENVIRONMENTAL SCAN 2.1 Market Demographics 2.2 Market Trend 3 4 5 6 7 CUSTOMER ANALYSIS COMPETITOR ANALYSIS STAKEHOLEDER ANALYSIS SWOT ANALYSIS CONCLUSION AND RECOMMENDATIONS References List of Appendices Appendix A Macro environmental Framework-PESTLE Analysis Appendix B Stakeholder Analysis Appendix C TOWS Matrix Appendix D GAP Analysis Appendix E Porters five forces List of Figures Figure 1 Green Stimulus Spending Figure 2 Aggregate Contributions of Major GHG emission Countries Figure 3 State By State Job Index Figure 4 Average Job Ads April 2010- January 2011 Figure 5 Renewables and Biomass 3 4 4 5 11 18 21 24 26 28 i 1 2 2 3 6 7 8 9 13 15

1 ~ Introduction
The biosystem engineering is an advanced and recently developing field. With the ever increasing competition in market it is essential to carry out the marketing audit that will help the company to answer the main three questions: 1. How your marketing decision process compares to best practices? 2. How your marketing strategy is currently performing? 3. Where your brand stands versus competitors? Thus marketing audit will help to takes a close look at the current business landscape internally and externally for Biosystems Engineering Pty Ltd. This report emphasises on the Environmental Scan (Situational) Analysis, competitor analysis, customer analysis, stakeholder analysis. It consists of different tools used such as, PESTLE, SWOT and Five Force Analysis to evaluate the Biosystems Engineering Pty Ltd. Lastly the TWOS Matrix to identify strategic alternatives for Biosystems Engineering shall be recommended. Biosystems Engineering Pty Ltd is a proprietary limited company that is based in Toowoomba City, Australia. Biosystems Engineering Pty Ltd is listed in 2 categories including: Business & Professional Associations and Engineers - Consultants.

2~ Environmental Scan
Biosytems Engineering has expanded from technological design to research design over the last 12 years. It has its operations in the Brazil, British Columbia and Scandinavia. The Companys customers are primarily in the enterprise, government and creative markets. The PESTLE analysis (Refer Appendix A) examines each factor to assess what their impact or potential impact on the organisation. In this way, they can prepare strategically for any changes that need to be made in the organisation or simply to have the awareness of the external market to give them a competitive edge over other firms in the industry. (Kotler, P.2000) 2.1 Market Demographics a) Geographic: Australia represents the Companys largest geographic marketplace. Currently, it is collaborating with Brazil, British Columbia and Scandinavia. Biosystems Engineering Pty Ltd has not set any geographic target area in particular. By leveraging the expansive reach of the internet and multiple distribution channels, it might serve both domestic and international markets. b) Demographics: The growth rate of the Australia has been between 1.02% and 1.2% from 2000-2011. The market demands are constantly increasing. Their unique approach to expansion goes beyond the traditionally accepted methods.

2.2 Market Trends

As per the report of ABARE, 2009, Renewable source of Energy in Australia 2009 has increased to 13% of which the energy from wood and wood waste is as low as 1% from the rest sources of energy. Over the past year 2009, the china market accounted for major green stimulus spending followed by US. Australian Government contributed USD 2Billion in this sector that is 1% as compared to China. (Refer Fig. 1). Europe remains the next largest regional market in the world.
But the total contribution to GHG emission Australia along with other countries tops the world (Refer Fig 2)

Fig 1: Green Stimulus Spending (USD Billion), 2009 (World Resources Institute)
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Fig.2, Aggregate Contributions of Major GHG Emitting Countries: 2005, 2009 (World Resources Institute)

The number of green job ads in Australia has risen by 7.68% since the last measurement period on 14 June. This can be compared to a 5.95% increase in all jobs in Australia over the same period, clear proof that the green jobs market is on average outperforming the wider employment market. The percentage of green jobs in NSW has fallen from 1.37% of total jobs in June to 1.21% of total jobs in July (Joe,2011) (Refer Fig 3, 4)

Fig. 3 State by State Job Index, Admin 2011, pg.1 4

Fig. 4, Average Job Ads April 2010- January 2011, Admin 2011, pg.1 One possible area for product and service development is within the solar and wind energy, particularly considering the recent Australian government fascination with renewable source of energy.

3~Customer Analysis
A business can be defined in terms of three dimensions: customer groups, customer needs, and technology (Kotler, P.2000, pg.41). A recent Greendex (2008) Consumer Choice and the Environment Worldwide Tracking Survey examined environmentally sustainable consumption and behaviour among consumers in 14 countries. The findings show that consumers in wealthy countries, those in Great Britain, Germany and Australia have a Greendex score of 50.2.A recent global study, conducted by TNS, found that Australians were very keen to go green, but many were not yet willing to sacrifice greatly to do so. The cost of going green was considered the greatest barrier for Australians, according to the study. The Mobium Group has divided Australian Lohasians into four main segments as follows (Marlow, Mobium 2007 cited in Ferraro, pg.9): 1. LOHAS Leaders: 8% of population 2. LOHAS Leaning: 41% of population 3. LOHAS Learners: 46 % of population 4. LOHAS Laggards: 5% of population Nobody makes money by segmenting a market. You make money by establishing profitable, long-term, highly satisfying exchange relationships with brand-loyal customers. (Loudon ,D., Stevens, R. & Wrenn, B. 2005, pg. 27).Thus Biosystems Engineering Pty Ltd has to target all these customers as every customer has its own needs.

4~ Competition
Competition, a critical factor in marketing management, includes all of the actual and potential rival offerings and substitutes that a buyer might consider (Kotler, P. 2000, pg. 8).The Australian market is a very competitive sector, the renewable energy market continues to grow, and an increasing number of firms are looking to enter the market. Australia is worlds fifth largest biotech center and is led by a number of global players. Northern Europe, Canada and Japan are leading the sector followed by USA. Beside this the other emerging companies in Australia using biosystem engineering are Consulting Environmental Engineers, Association of Consulting Engineers, Watertec Engineering, fishace ecological engineering, Alternative Conflict Resolution Services, Bowman Agribusiness Consultants and Kehoe Myers. Countries around the world are now fully aware for the need of biosystem engineering and the government are funding for their research. Projects such as Conservation Tillage, Precision Agriculture, Remote Monitoring, Residue Management Project etc. have already been progressed in USA.

5~ Stakeholders Analysis
Every organization, large or small, should develop and regularly update a stakeholder analysis. Even with a detailed stakeholder analysis, it is still possible that stakeholders can impact an organization in ways that were not anticipated. The purpose for conducting a stakeholder analysis is to identify and assess potential impact and then plan strategies related only to those specific stakeholders that warrant attention. It has many stakeholder competitors, vendors, suppliers and employee Groups. (Refer Appendix B)

6 ~ SWOT Analysis
Strengths A Disciplined Innovator: Biosystem Engineering Pty Ltd is a disciplined innovator. The company effectively manages its innovation timeline generating consistency in technology and research. The company introduced the worlds first bionic beaver that was a modification to old harvester of 1990. Beside this there is on farm transport system that is under development which will give efficient production rate. Staff: It has experienced staffs from various fields of engineering and science that helps to analysis the model, prototype, research, data collection, research. It has also maintained its department for writing news and articles in the journals for common people to understand the importance and working of their inventions. Clustering of company units. With the continued growth of the biosystem engineering market, the company has looked to expand its business, including those areas where it has an established presence. It has clustered varies of expertise such as project management, forensic engineering, analysing and evaluation of data, research equipment. Miscellaneous: They have an amazing website with details about their mission and more. The website is well designed and explains the Biosystem Engineering concept very well. It has a commitment to invent technologies to provide safe and plentiful food to eat, pure water to drink, clean fuel and energy, and a healthy and safe environment satisfying and delighting its customers, and caring about their communities and environment. These factors, in large part, are why customers are attracted to the company.

 Weaknesses Reliance on Australia market. Biosystem Engineering Pty Ltd. headquartered in Queensland, derives approximately all of its revenue from its domestic Australian market. The company is not an international brand; consequently it should think of generating a greater proportion of revenues from outside the Australia. Should the companys Australian unit under-perform due to economic conditions or increased levels of competition, its performance will be materially affected. No Patents and short comes for its innovation. An important long-term risk to the companys innovation is lack of patents. Diminishing return from innovation, one of the companys competitive strengths, would have a significant adverse effect on the companys performance .Beside this bionic beaver can only shop trees at a limited height with limited diameter of twigs. It is more concentrated in eucalyptus, and then the questions are for other crops such as corn, wheat etc. Independent Body. The company is running independently without the intervention and support of governmental and other local bodies, this would lead into financial crises due to investment of heavy capital in the new invention and lack of proper market to sale its product. Opportunities Growth in Green market. The specialty renewable source of energy will accounts for roughly 14% of the world market, of which 10% will be contributed by biomass (refer Fig.5)

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Fig.5 , World Energy Consumption Million tons of oil equivalent (Mtoe),Expert Group for Renewable Sources of Energy 2005, pg.11 Market expansion: Biosystem Engineering Pty Ltd has expanded itself by signing an agreement with the Brazil, British Columbia and Scandinavia entities. The Latin American concern for renewable bioenergy from biomass will be a good opening .Beside this Asian country such as China, India are constantly in search of bioenergy rather than consumption of fossil fuels and contribute to the global climate change. Threats Volatile bioenergy markets: The availability and supply of biosystem engineering experience high volatility. Its requirements for quality standard and specification create complications within the producing countries. Barriers may include; weather, and political and economic conditions which may adversely affect the companys business. In the past, the actions of some organizations and associations have affected the biosystems engineering Pty

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Ltd. Besides this European and other Asian countries have progressed a lot in the renewable source of energy and might be this new technology of Biosystem engineering might become obsolete. Slowing Australian retail sales. The company faces long-term concerns regarding its Australian sales growth potential. If current growth continues, saturation levels within the Australia will be reached soon.

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7~ Conclusion and Recommendations Biosystem Engineering Pty Ltd has been performing at its paramount for the services towards society and environment. Based on the SWOT analysis and environmental scan; the TOWS Matrix and GAP Analysis (Refer Appendix C, D) for Biosystems Engineering Pty Ltd has been chalked. Also the Porter Five Force Analysis (Refer Appendix E) has been recommended. Its current marketing decisions have been extremely effective and timely. They are targeting the global market, primarily in the Brazil, British Columbia and Scandinavia. They have also improved their technology and protected themselves from a slow Australian market. Their products and services have been consistently updated based on consumer demand. Success can be somewhat deceiving. It may have left money on the table by not being more aggressive, more targeted to local segments and not concentrating their efforts toward the global market. Good mission statements focus on a limited number of goals, stress the companys major policies and values, and define the companys major competitive scopes (Kotler, P. 2000, pg. 41) thats suits Biosystems Engineering Pty Ltd Mission Statement: to develop and disseminate engineering knowledge to solve systems problems in agriculture, food, forestry, natural resources and the environment., and its strategic planning seem to be in line. The objectives for sales and revenue have consistently been achieved. The critical issue for it is the decline of the Australian market for biomass energy and no firm government policies.

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To take advantage of the companys strengths and considering the weaknesses, opportunities, and threats the following marketing strategies are recommended. Revamp product lines to meet specific location consumer demands both regionally and globally. Use aggressive advertising to reduce the risk of increased competition Leverage the company focus on Corporate Social Responsibility in marketing its brand image. Focus expansion on additional overseas markets. Continue to expand in the Australian market to mitigate the threat from competitors. Continue to add additional products and services to increase sales and meet higher level customer needs. Expand its search for new stakeholders to invest a handsome capital for its research and inventions. Patented its entire product and utilise its inventions firstly in local market.

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References:

1. Expert Group on Renewable Energy 2005, Increasing Global Renewable Energy Market Share Recent Trends and Perspectives, viewed on 14 August 2011, http://www.un.org/esa/sustdev/sdissues/energy/op/beijing_re_egm/beijing_re_report.pdf 2. Editors, Australia- Biotech Sector, viewed on 17 August 2011, http://www.investinaustralia.com/industry/biotechnology/australia-biotech-sector 3. Admin 2011, Green Jobs Index January 2011, viewed on 10 August 2011, http://greencollartalent.com.au/jobindex/green-jobs-index-january-2011/ 4. Kerry Given 2011, 11 Green Business Trends For 2011, viewed on 11 August 2011, http://www.greenmarketing.tv/2011/01/26/11-green-business-trends-for-2011/ 5. Joe 2011, Australian Green Jobs Advertising Continues Impressive Growth Despite Big Falls in NSW, viewed on 10 August 2011, http://greencollartalent.com.au/jobindex/australian-green-jobs-advertising-continuesimpressive-growth-despite-big-falls-in-nsw/ 6. Kevin A Baumert, Tim Herzog and Jonathan Pershing 2005, Navigating the Numbers: Greenhouse Gas Data and International Climate Policy, quoted in Editor 2009, Aggregate Contributions of Major GHG Emitting Countries: 2005, viewed on 11 August 2011, http://www.wri.org/chart/aggregate-contributions-major-ghg-emitting-countries-2005 7. HSBC 2009, U.S. Climate Action, quoted in Editor 2009, Green Stimulus Spending By Country, viewed on 11 August 2011, http://www.wri.org/chart/green-stimulus-spending-country Kotler, P. 2000, Marketing Management, Millenium Edition, 10 th edn, Pearson, USA. 15

8. Loudon, D., Stevens, R. & Wrenn, B. 2005, Marketing Management Text and Cases, 1 st edn, Haworth press, New York. 9. Matt Cawood 2010, Biomass harvester destined for overseas, viewed on 10 August 2011, http://fw.farmonline.com.au/news/nationalrural/machinery-andequipment/machinery/biomass-harvester-destined-foroverseas/1966481.aspx?src=rss&utm_source=twitterfeed&utm_medium=twitter 10. Editor 2009, Appointment means business, viewed on 10 August 2011,http://www.getfarming.com.au/pages/farming/news_view.php?nId=9030232 11. Web Design 2008, Biosystems Engineering, viewed on 3 August 2011, http://www.biosystems.com.au/home/ 12. Marisa Wikramanayake 2010, New Mallee Harvester prototype reaps accolades, viewed on 10 August 2011, http://www.3017-new-mallee-harvester-prototype-reaps-accolades.html 13. Melanie Ziegler 2011, Agricultural Machinery and Farm Technology, viewed on 10 August 2011 http://www.Agricultural Machinery and Farm Technology NDSU.htm 14.Pink, B. 2010, Australias Environment: Issues and Trends2010, ABS, Australia. 15.Editor 2010, Clean Technology Fund, viewed on 13 August 2011 ,http://www.Clean
Technology Fund - Climate Funds Update.htm

16.Joely Taylor Colin Stucley 2011, Growing a green fuel industry in Australia, CISRO Publications.

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17.Stuart Whitten, Martin van Bueren and Drew Collins1, An Overview of Market-Based Instruments and Environmental Policy in Australia, viewed on 15 August 2011,
http://www.ecosystemservicesproject.org/html/publications/docs/MBIs_overview.pdf

18.D. Briassoulis, P. Panagakis, E. Nikopoulosv (ed.) 2008, Education and Research in Biosystems Engineering in Europe, ERABEE, Greece. 19.Swiss Agency for Development and Cooperation SDC - Natural Resources and Environment Division 2007, BIOFUELS, OPPORTUNITY OR THREAT TO THE POOR? viewed on 14 August 2011, http://www.worldbiofuelsmarkets.com/reports/SwissReport.pdf 20. Carla Ferraro 2009 (ed.), Retail Therapy- The Green Consumer, viewed on 13 August 2011, http://www.buseco.monash.edu.au/centres/acrs/research/whitepapers/the-greenconsumer.pdf.

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Appendix A MACROENVIRONMENT FRAMEWORK PESTLE ANALYSIS

2.1 Political Factors Operating in a globalized environment with collaboration around the globe (Biosystems Engineering Pty Ltd now collaborates in Brazil, British Columbia and Scandinavia ), its performance is highly influenced by the political and legislative conditions of these countries. There are still no clear cut policies for the biomass energy industries from the political aspects. In an industry with a typically high investment for development of such machineries requires a strong and confidence with a leadership to support its usage in future

2.2 Economical Factors Economic factors are of concern to Biosystem Engineering Pty Ltd, because they are likely to influence demand, costs, prices and profits. Although employment for the green business in Australia is still growing and is expected to contribute greater amounts to Biosystem Engineering profits over the next few years, the company is still highly dependent on the Australia market. Hence, Biosystem Engineering would be badly affected by any slowdown in the Australian Green market and are exposed to market concentration risks.

2.3 Social/Cultural Factors The green consumer market is becoming a larger and trendier demographic in Australia. (Foot, G. 2008 cited in Ferraro, pg.1). 18

Biosystems Engineering Pty Ltd have, therefore, incepted for green technology. Indeed, a survey undertaken by the Australian Bureau of Statistics has shown that people with a high income and/or education level are more likely to express concern about the environment than those with lower incomes and/or education (ABS 2001).With nearly 4 million Australians (26 per cent of the adult population) LOHAS aligned, it has clearly become a mainstream marketing segment (Marlow2007 cited in Ferraro pg.3).The type of goods and services demanded by consumers is a function of their social conditioning and their consequent attitudes and beliefs. Consumers are becoming more and more aware of green issues, and their attitudes towards environment are constantly changing. 2.4 Technological Factors Technology is a major macro-environmental variable which has influenced the development of many of the Biosystem Engineering products. The new technologies benefit both customers and the company: customer satisfaction rises because goods are readily available, services can become more personalised and shopping more convenient. The launch of the Bionic Beaver initiative provided the shift that is now apparent in the management of renewable source of energy (John Slade, 2010). Biosystem Engineering Pty Ltd utilise the following technologies: Novel Design Modelling Finite Element Analysis Rapid Prototyping Forensic Engineering

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2.5 Legislative/Legal Factors Various government legislations and policies have a direct impact on the performance of Biosystems Engineering Pty Ltd. The Carbon Pollution Reduction Scheme (or CPRS) that was a proposed cap-and-trade system of emissions trading for anthropogenic greenhouse gases, due to be introduced in Australia in 2010 by the Rudd government, as part of its climate change policy that marked a major change in the energy policy of Australia. But still there are no policies supporting the biomass, hence there are chances of failure of this project. 2.6 Environmental Factors Environmental issues have gained increasing attention in the public arena in Australia over the last twenty or more years. Market Based Instrument (MBIs) is becoming a mainstream policy instrument for managing a wide range of environmental problems. Governments appear to be undergoing a paradigm shift in their views on what constitutes good environmental policy, with greater emphasis being placed on the role of decentralised instruments to achieve change within industry. But there is a risk that environmental targets will be set by government without a comprehensive assessment of all the costs and benefits implied by the target. Poorly designed trading programs can impose high transaction costs, particularly where the responsibility of monitoring and verification is also devolved. Hence, by recognizing this trend within the broad ethical stance, Biosystem Engineering Pty Ltd social responsibility is concerned with the ways in which an organization exceeds the minimum obligations to stakeholders specified through regulation and corporate governance.

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Appendix B Stakeholder Analysis

Stakeholder

Stake in the project

Potenti al impact on Project High

What does the Project expect the Stakeholder to provide? Experienced staff to be involved in user group and user acceptance testing.

Perceive d attitudes and/or risks Lack of clarity about Market.

Stakeholder Managemen t Strategy

Responsibility

Board Members

Determines company policy, mission, strategies procedures, inventions, and goals

Views project team as Commitment too to technical implementing ly change. oriented. High Commitment to invent. Works with interest and full efficienc y.

Involvement in Project Steering Board, Regular updating meeting with employees .Inventing and research

Managing Director

Staff Members

Manages Company staff who will operate the new system and will carry out analysis of data , research, evaluation , modelling, setting standards ,designing, data collection , prototyping Supports the project

Involvement in briefing sessions at quarterly company meetings.

Project Team (Design Engineer, Prototyping Engineer, Biometrician, Publisher etc)

Clients & Partners

High

Concern about
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Involvement in user

Future Farm Industries

,Universities , legal firms

and in research

sales of the product and services. Beside this success of their product in the market.

groups.

Cooperative Research Centre (FFICRC), National Centre for Engineering in Agriculture (NCEA), Queensland Department of Primary Industries and Fisheries, Agline Bougault Industries Croplands Kondinin Group Country Water Long Howland Lawyers and Advisors Wagga Wagga City Council Challenge Implements Airservices Australia Cross Slot Gessner Industries AgGuide Carbon Grazing Leica Geosystems

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Rural Industries Research and Development Corporation University of Southern Queensland Kenro Metal Services Rainspan Irrigation QB Industries Agrowplow Ranger Loaders Law firms

Suppliers /Vendors

Supply of Materials

High

Provide an efficient and smooth supply of the materials at the competitive prices Fund and legal support with new bills to pass in the legislation

Lack of commit ments to the firm , assuranc e of supply

Involvement in meetings and discussion

NCEA, Applied Laser Groups Pty Ltd, Tasweld.

Government Bodies

Funding

High

Lack of vision for further develop ment in the biomass energy

Involvement in the political matters

Australian State , Western, Federal Govts.

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Appendix C TOWS MATRIX

External Opportunities (O)

External Threats (T)

1. Growth in Green market. 2. Market expansion:

1. Volatile bioenergy markets 2. Slowing Australian retail sales.

Internal Strengths (S)

(Maxi-Maxi Strategy)

(Maxi-Mini Strategy)

1. A Disciplined Innovator 2. Staff 3. Clustering of company units 4. Miscellaneous:

1. Penetration in new market around Asia and Europe 2. Recognition of its brand 3. High brand loyalty 4. New development and research 5. Good services to its client

1. Increase in the campaigning of its product and services 2. Regular check on the market in Australia and new policies for biomass energy and other green issues.

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Internal Weaknesses (W)

(Mini-Maxi Strategy)

(Mini-Mini Strategy)

1. Reliance on Australia market 2. No Patents and short comes for its innovation. 3. Independent Body.

1. Explore market outside Australia to gain the value of the product and services 2. Patenting its invention 3. Working with government organisation or finding investors from the rest part of world

1. Working with firms who has support from the government 2. Suspending some operations till it recognises its value so as to receive funds 3. Creating awareness in the biomass energy among the local and state official bodies.

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Appendix D GAP Analysis

Sales gap Australian Market has been the most crucial for the sales of the biosystems Engineering Products and services. But they lack their concentration globally were the market is wide open and countries are ready to invest huge in the renewable source of energy. Customer loyalty gap In developing the biosystems Engineering Pty Ltd the desired state was greater customer loyalty. It can be observed that loyalty could only be achieved if there is something to keep customers returning to environment. But Biosystem Engineering lacks its customer loyalty in its new invention of bionic beaver as it is unable to make market in Australia.

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 Security controls gap Patenting its product and other technical data has been lacked in security. Management Understanding Gap The invention of bionic beaver was not success in Australia. The management thought that the biomass industry will be flourishing with new secured policies from the government, but still the picture remains unclear.

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Appendix E PORTER'S FIVE FORCES Threat of New Entrants The Australian Biosystem engineering market is primary dominated by few competitors. Over the last 20 years, the green market has been transformed into the supermarketdominated business. Majority of large chains have built their power due to operating efficiency and major marketing-mix expenditure. Hence, nowadays it possesses a strong barrier for new companies who desire to enter the green market. For instance, it becomes rather difficult for new entrants to raise sufficient capital because of large fixed costs and highly developed supply chains. Other barriers include economies of scale and differentiation (in the provision of products or services with a higher perceived value than the competition) achieved by Biosystems Engineering Pty Ltd seen in their aggressive operational tactics in product development and better distribution.

Bargaining Power of Suppliers This force represents the power of suppliers that can be influenced by bio system engineering chains and that fear of losing their business to the large countries in the world. In return, US & Europe based suppliers are also threatened by the growing ability of Biosystem Engineering in Australia to source their products from abroad at cheaper deals. The relationship with sellers can have similar effects in constraining the strategic freedom of the company and in influencing its margins. The forces of competitive rivalry have reduced the profit margins for companys chains and suppliers.

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 Bargaining Power of Customers Porter theorized that the more products that become standardized or undifferentiated, the lower the switching cost, and hence, more power is yielded to buyers Porter M. (1980). Biosystems Engineering Pty Ltd famous commercial interest and cost efficiency remains the most successful customer retention strategy that significantly increases the profitability of its business. In meeting customer needs, customizing service ensure low prices, better choices, new inventions , research , accessible data enables to control and retain their customer base. In recent years a crucial development in usage of renewable source of energy has occurred due to a large demand of consumers involve in manufacturing energy from biomass. Threat of Substitutes General substitution is able to reduce demand for a particular product, as there is a threat of consumers switching to the alternatives Porter M. (1980). In the biosystem engineering industry this can be seen in the form of product-for-product or the substitute of need and is further weakened by new trends, such as the ways of development of new technologies and other inventions making the previous one obsolete. Bargaining Power of Competitors The biosystem engineering environment has seen a very significant growth in the size and market dominance of the larger players, with greater inventions and the utilisation of a range of formats and data specifications, which are now prominent characteristics of the sector. The highly competitive market has fostered an accelerated level of development, resulting in a situation in which US, Europe, Japan, China Biosystem Engineering had been innovative to maintain and build market share. Such innovation can be seen in the development of a range of trading formats, in response to changes in consumer behaviour.

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