Business Essentials: Advanced

Learn about the essentials of business and the factors necessary for success. Explore a case study of expanding a cafe internationally and developing a tailored marketing mix. Understand the key factors to consider when expanding into an unfamiliar territory. Calculate and evaluate profitability and liquidity ratios to make informed decisions. Determine the overall viability of overseas expansion.

Business Essentials:
Advanced

INTRODUCTION
Essentials of business comprise all factors which contribute in a business's successes or
failures. The business essentials are collection of all those functions and components that are
necessary for success of operations of organization. these involve multiple plans, prototypes,
methods and principles that are crucial to growth as well as performance (Al-Haddad and et. al.,
2019). These are creative series of self-paced programs that are built to enhance valuable business
capabilities for international expansion and growth. All of the activities involved are intended to
provide versatile and effective learnings in business environmental concept.
The study is focused on case-study of 2 businessmen who have established their cafe
according to their vision. Hank Marvin and Patty Smith, started their cafe in Wandsworth, London
in Jan. 2017, called Marvin and Smith's coffee. They had ambitions to expand internationally and
eventually they carried out market analysis and planned to opening coffee shops in Netherlands.
As per their researches they have developed a marketing blend for operating reliably and
effectively in circumstances of the overseas marketplace.
MAIN BODY
QUESTION 1
Justification of Country that selected for expansion:
Several nations have joined the EU in the recent several years as well as after that, through
studies, Hank and Patty wanted to broaden their businesses in Netherlands and more particularly
in Amsterdam. There are numerous reasons why Hank and Patty were drawn to Netherlands for
growth opportunities. Those explanations are outlined with credible evidence, as follows:
Increasing tourist:
The nation is gradually become the most popular tourist hotspot, although there is a
relatively lower population but visitors are attracted towards it. Nearly 16 million tourists have
travelled European countries in recent years as well as statistics say such figures will grow in
coming period (Aliyu and et. al., 2019). Tourists are rising daily, that is a great advantage for the
cafe shop business of Marvin and Smith as business is gaining international exposure. Greater and
greater peoples are becoming aware of brand's success on world market. Both founders will also
be able to grow their marketplace and share through the launching of new outlets in other regions
because people embrace the brand.

Open for global trade: Netherlands' economy is quite transparent and free to growth of global
trade. The economy offers foreign traders massive potentials to work in marketplace, with broad
privileges and potential for investment (Birt and et. al., 2020). The nation's political leadership are
more focused and give priority to structural changes that also offer opportunities for corporations
and start-ups. Coffee by Marvin and Smith may also aid the nation win governmental support as
they provide jobs to regional experts. Therefore, growing companies would lead to improved
economic conditions and increase public procurement capacity. When money is flowing into
economy and people gain more energy to invest their profits, Marvin and Smith's cafe business
would benefit.
Preference of visitors: The preferences and requirements of visitors are another variable that
inspired Marvin and Smith in choosing the Netherlands. Tourists who have been to EU nations in
recent years come mainly from neighbouring countries with a large cafe consumption level. This
element will make many profits for the cafe business of Marvin and Smith. As in case of
Germany, country's economy is continuously growing and having 5th place in worldwide
marketplace. Around 5.24 millions of Germans have visited Netherlands and nearby locations for
vacations. That is a fantastic opportunities to make Marvin and Smith's cafe massive profits as
well as growth.
Hank and Patty have drawn focus to Netherlands marketplace here are several reasons.
They evaluated that country Netherlands is a quite promising place for running their cafe business,
is its tourism, and the growing buying power of indigenous people. Both strengths will make
Marvin and Smith healthier business if thoroughly explored.
QUESTION 2
Tailored Marketing mix for expanded market:
Marketing mix is a method that companies are using in marketplace to advertise their
products and services. The resource provides a series of measures that businesses take to market
their products and meet customer requirements and wishes (Blahová Pálka and Hrabec, 2019). The
model serves as the basis for companies and is often utilized as organizations enter new regions
with their items or stay on same market but introduce fresh products. There is another requirement
for using marketing mix strategy if businesses expand both from product and geographic term.
Marketing mix is four-part process and simply, involves four specific factors that allow

organisations to plan as well as to work effectively to provide consumers with what they seek.
Item, size, location and advertising are the key considerations. This is often used by Hank and
Patty towards expansion decision in Netherlands, to carry Marvin and Smith's cafe-shop chain.
Such basic factors were used and designed with thorough market analysis. The following section
outlines such components:
Product: It applies to the products of business and its exclusive products or services produced for
its particular sector. Hank and Patty are growing their businesses in Amsterdam, carrying out
study, here Roast-Coffee produces the most profits on coffee business segment as per its outcome
(Deshmukh, 2019). Thus the organization focuses on this aspect and using Gumutindo Coffee
beans. Hank and Patty also developed their coffee-house atmosphere with Ugandan pattern of
most of the beans are purchased from there. It is relaxed and friendly to its consumers with Eastern
African feel. Organisation offer customers fee unlimited Wi-Fi and power adapters for using their
tablets, notebooks and other gadgets.
Price: This represents the amount paid by the buyers for product and they prepared to pay too.
Such prices are set by business in line with costs incurred in manufacturing goods or services as
well as line with market analysis. Individual's buying power, or basically consumers, plays an
important role in the failure or success of goods or services provided by companies. If somebody
can't afford any commodity, they can't even recognize the products to be their requirements, or
they would either switch to a certain lower price alternatives. Hence, price variable is quite crucial,
and both founders have studied the market scenario deeply. We target people, groups and specially
families of the working class and of upper middle class. Their rates of multiple coffee varieties
and certain secondary items are in line with incurring costs business and visitors are able to spend
at such level.
Place: It's a quite significant aspect of marketing mix, it's about product positioning and channel
delivery. Industries must place their goods and deliver them in a way as to meet potential
consumers or customers as well as improve their availability there (Dey, 2019). Hank and Patty
expanded in Netherlands, opening 2 new stores of Marvin and Smith's cafe in London along with
this. That implies they launched 3 new stores at same time, 1 out of those is for offshore
expansion.
Promotion: In marketing mix promotion leads as well as follow other P's and through this
customers know about company products and services at the potential marketplace. Promotion

leads a company in conducting brand recognition. It will include several medium such as
advertising, personal selling, branding, sales promotion, direct marketing, public relations, social
media outreach and many more (Duarte and et. al., 2019). Through these medium an organisation
able to aware customers about offering as well as it will also help them in convincing to purchase
offerings immediately. In respect of Marvin and Smith's cafe they can conduct numbers of
promotional activities as that will help them in aware customers at huge ratio as well as it also lead
to footfall at the cafe. Methods which they may adopt are social media platforms like Facebook,
Instagram, LinkedIn and so on as well as they can also promote business through digital media.
QUESTION 3
Identify key factors consider while expanding into an unfamiliar territory
While expanding a business a company go through numbers of issues which directly and
indirectly impact on their business operations and functions. So it is essential for each and every
firm to conduct analysis as through that they can determine factors which impact on business
during expansion process. In respect of Marvin and Smith they are planning to introduce their
business of cafe in Amsterdam, Netherlands, during which they go through several issues because
they are unfamiliar with respective territory. Below some factors are given which lead arise issue
challenges:-
Human resources management:
It is considered as strategic approach through which an organisation able to manage people
at the workplace in effective manner. This will also help business in gaining competitive
advantage at the marketplace by enhancing staffs potential, manufacturing process and so on.
There are numbers of functions are conducted by HR management in order to conduct business
activities properly such as benefits administrating, training and development, compensation
management, talent acquisition and so on (Geiger and Suber, 2019). Moreover when a company
expand their business operations and functions at international market human resource
management go through several issues from which some are given below which may faced by
Marvin and Smith while expanding their cafe:-
 Employees training and development: It is one of the main function of human resource
management, according to which they plan or design training for employees so that they
conduct their work effective as well as it will also help in maintaining safety at workplace

(Harrison and et. al., 2019). In respect of Marvin and Smith's cafe, they are expanding their
business at Amsterdam and according to which it is essential for them to provide training
and development session so that they can perform activities properly. But in this process
they will face issues because human resource team need to design training according to
respective nation culture for which they need to conduct proper analysis. Moreover, in
order to avoid this issues respective company can do market analysis so that they can know
culture, value and belief of Amsterdam. Then accordingly human resource will develop
training and development for employees which help in establishing business at respective
place effectively.
Marketing
It is considered as process which help a company in developing effective and relationship
with customers and satisfying their need by conducting value exchange. By conducting effective
marketing activities an organisation able to attract more and more customers towards their
products or services as well as it will also help in creating brand image in the mind of customers.
In respect of Marvin and Smith's cafe they are introducing their business in new market i.e.
Amsterdam and for that they need to conduct effective marketing strategy so that they can attract
more and more customers. But while this they go through some issues, which are mentioned
below:-
 Selection of marketing mode: According to this respective company need to conduct
market analysis as that will help in selecting appropriate method of marketing. This will be
challenging for company because they are conducting business in hospitality industry and
they focuses on different customers segment (Matei and Zirra, 2019). Due to which
respective cafe need to determine most appropriate mode of marketing so that they can
attract them successfully which lead to increase footfall and business. In respect of this
Marvin and Smith's cafe can conduct marketing through social media, newspaper and
digital media because through it they able to cover all segment people. Through this they
also able to attract customers from all different locations of Amsterdam.

QUESTION 4
Calculate and evaluate how 2 profitability and 2 liquidity ratios may influence decisions available
to firm
In order to determine business effectiveness company management need to calculate some
ratio so that they can determine whether their business is in profit or loss (Mathur, 2019). In
respect of Hank and Marvin, they are expanding their cafe business in Amsterdam market and for
that they calculated two profitability i.e. gross profit ratio and net profit ratio. Along with this
company also calculate two liquidity ratio that is current ratio and quick ratio, calculation of all
ratios are given below:-
What do they tell you about the current business?
Hank and Marvin want to expand their business or cafe in Amsterdam market and for that
they calculated two types of ratio i.e. profitability ratio as well as liquidity ratio. This is so because
through that they able to take proper decision for the business as well as it will also help in
estimating company expenses and profitability which they can gain respective nation marketplace
(Panel, 2019). For calculating profitability ratio respective cafe management calculate gross profit
ratio through which know about effectiveness of cafe operational performance as well as they also
calculate Net profit ratio because through that they can determine their expenses in effective
manner. In addition to this firm also evaluate its liquidity ratio by calculating current ratio which
help in determine whether cafe have enough resources in order to meet short term or day to day
objectives in effective manner. Along with this they also evaluate quick ratio which is also known

as acid test ratio through this firm able to determine its ability to use near cash or quick assets in
order to meet cafe requirement in effective manner.
Evaluate how the calculated ratios influence decisions available to Hank and Marvin and
what implications might they have for the expansion plan?
Above calculated ratio help Marvin and Smith's cafe to determine where their decision of
expanding business at Amsterdam market is effective or not as well as it will also help in
conducting effective decision related to situation and budget (Geiger and Suber, 2019). In respect
of respective company by calculating liquidity ration it can be determine that they have more
assets compare to liabilities which means they can effectively expand business because they are
financially strong. Moreover they also need to focus more on their promotional activities as that
will help in increasing sales at the respective marketplace.
QUESTION 5
Summary about overall viability of overseas expansion
By conducting evaluation of above discussed point it can be summarised that ever
company want to expand their business at the international or global market. This is so because
through it they able to get numbers of benefits such as increase numbers of customers, footfalls,
profitability, sales, market shares, goodwill and many more. While conducting this a firm need to
conduct numbers of analysis such as reason to expand business because that will help them in
developing decision. Moreover they also need to conduct market analysis through marketing mix
as that will help in identifying product, price, place and promotion in order to offer their products
to potential customers. Along with this firm also need to analyse issues which may faced by a
company while expand their business at the overseas level as well as they also need to evaluate
different ratio such as profitability ratio, liabilities ratio and so on. This is so because through it
they able develop proper decision through which business expansion can be done.

REFRENCES
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