Marvin and Smith Coffee Shop Expansion

This report analyzes the expansion plan of Marvin and Smith's coffee shop into Poland, examining the marketing mix strategy, potential challenges, and profitability ratios. It provides insights into the feasibility of the expansion and highlights key considerations for success.

Business Essentials

Table of Contents
INTRODUCTION...........................................................................................................................1
Expansion of the Marvin and Smith into the Poland...................................................................1
Marketing mix in relation to the coffee shop expansion plan......................................................2
Issues and challenges raised by the Marvin and Smith Coffee shop...........................................4
Profitability ratios:.......................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
Business essentials is an innovative set of self-paced courses in different types
of key business areas which are designed to improve the critical skills of the business.
Business essentials allows in developing the business skills among individual in order
to carry out the sustainable operations within the company. The report is based on New
venture that is Marvin and Smith's coffee shop which is currently situated in South
London. This report will help in providing the better place for the expansion of the
business and also help in determining the key competitors, target market, location and
capital required to establish a business. It will also helps in finding the ways to get finest
coffee beans supplied from Uganda.
Moreover, In order to carry out the fair trade practices various Marketing mix
elements and various issues related with the Human resource and operation
management of the firm.
Expansion of the Marvin and Smith into the Poland
As the Marvin and Smith coffee shop is currently performing its operations in the
South London which have rapidly grown since recent years (Botelho and Kulishov,
2018). In order to expand their business in the international market, both the partners
decided to diversify the business in Poland. So they have to consider proper Marketing
planning of the Poland In order to sustain the business for the long term in the Poland
market. As it is not easy to offer a great coffee to the customers and gain their faith and
loyalty at new places as large number of competitors have already established their
potential brand image on the customers. Marvin and smith coffee shop has increased its
focus on high-quality snacks and excellent customer services. However, Poland has a
highly fragmented yet flourishing Coffee shop market which undergoing considerable
consolidations as international brand expand and weaker chain still struggle to survive.
The main reason behind opting the Poland for expanding the coffee business are as
follows:
Foreign Policy: As the country is a member of the North Atlantice and the European
Union (EU) enjoys the good relation with the US. This helps the Marvin and Smith's
coffee business in economic security. As the polish government has been a strong
supporter of the American Military presence in Europe.
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Out sourcing: Poland is emerged as a Business process outsourcing hub help the
Marvin and Smith's coffee business to outsource its products and expand the business
operations.
Legal structure: The current legal of the Poland is based on the foundation of polish
law. This system relies on series of codes such as Labour law, custome, foreign
exchange act etc (Cienski, 2018). Law of public finance and Chamber of control allow
the business to adopt the flexible operations within the firm.
Environmental policies: Also Marvin and Smith enjoy the environmental policies of the
Poland that helps in improvising the quality measures and standards. Also it allows the
Marvin and Smith company to manage the waste management of the firm which helps
in attracting large number of customers.
Marketing mix in relation to the coffee shop expansion plan
It is putting a right product in a place in right time. For this each and every aspect
of business plan is needed to be known. Marketing mix always helps in understanding
the product, place, price, promotion and various other factors that can help in expanding
the business internationally or in another city or country (Verhoef, Kannan and Inman,
2015). For expansion of Marvin and Smith’s coffee shop in abroad they will use
marketing mix 4 P's model as marketing mix is associated with 4 P's of marketing.
Marvin and Smith wants to expand their coffee shop in Poland So they have made a
business expansion plan based on marketing mix strategy which has been described
below: Product: the product that is to be sold to the customers in Poland will be both
tangible and intangible. Tangible products that they will be selling to their
customers will be high and finest quality tea and coffee to their customers. Not
only this they will be selling snacks, cold drinks and pastries inspired from East
Africans. Intangible products that they will be selling to their customers will be
excellent customer experience. Experience will be one of the most important and
basic product they they will be selling. They will be providing their customers with
good and finest quality of tea, coffee, food, other beverages. Other than this they
will be selling excellent ambiance, relaxing environment as per their customers
requirements. Their unique selling proposition will be the additional features that
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they will be providing to their customers which are Wi-Fi facilities to their
customers, power point sockets for charging, board games according to the
theme of the coffee shop. Price: Price of their products will be according to the competitive prices as per
their competitors in Poland. They will be offering value based pricing according to
the quantity of the product like small, medium, large etc. Value based pricing
strategy is where prices of the products are set primarily not exclusively (Dadzie
and et.al., 2017). Prices of the products that will be chosen by the customers will
be fixed according to the quantity and according to the extra ingredients that are
chosen by them. Prices of all the extra ingredients will also be fixed and if the
customers will be wanting to add some of them then the price of those
ingredients will be added to the total amount of the product. So it can be said that
prices of the products will not be rigid and with its flexibility and varied prices
customers will get attracted towards their coffee shop. Place: Marvin and Smith has chosen Poland to expand their Coffee shop market
due to various benefits. Poland has a solid macroeconomic performance, has a
well developed financial sector. Importation of high quality products and policy
related to it is quite easy. There are many other policies of Poland which makes it
easy for UK business to expand their business in Poland. Natural and human
resources are easily available in Poland at an affordable price. Infrastructure in
Poland is easily available. This will help Marvin and Smith to expand their coffee
shop business in Poland quite easily. It will also help them to flourish their
business. Taxation system and openness to Foreign direct Investment also helps
new business to establish themselves and sell their products and make them
available to their customers in an effective manner. Other intangible products can
be easily made available to the customers such as Wi-Fi, parking space etc.
 Promotion: It is one of the most important component of marketing as proper
promotions can help the business to boost themselves, increase their brand
recognitions, sales etc. within that country (Hys, 2017). In this advertising, sales
promotions etc. are seen and worked on. Marvin and Smith can do advertising of
their Coffee shop in various ways which will help them to reach their target
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audience so that awareness regarding their business presence within the new
market can be made. This will also help them to increase their profitability with all
the product and services offering made available to the target audience. They
can do promotions through mass media like television promotions, newspaper
articles etc. They can also provide sales promotions such as combos or coupons
etc. to their customers for the growth of their business and sales of their
products.
Issues and challenges raised by the Marvin and Smith Coffee shop
Business involves various different types of functions within the organization in
order to accomplish the main objectives of the business. Such functions are Human
resource Management, Financial management, Operation management, marketing etc.
these functions need to be coordinated together in order to In order to expand the a
business various different types of issues and challenges will be raised within the
different departments (Gutierrez-Gutierrez, Barrales-Molina and Kaynak, 2018). So
issues raised in Human Resource function of the business and operation management
of Marvin and Smith are as follows:
Human resource
Humans have always been the complex and managing and controlling the
people is always been a tricky process. So in this digitized world, transparency of social
media, persistence of software updates and remoteness of International teams have
made the human resource as a difficult job. Various issues raised with the
establishment of the Marvin and Smith's coffee shop in Poland are as follows:
Attracting top talent of Poland: Marvin and Smith have established a their coffee
business at new place so they have to employ the people of the Poland in order to
deliver the goods and services to the customers. So it is very important to attract and
retain the best talent which requires the discernment, time and complex recruitment and
selection program in order to attract right individual.
Embracing the change with grace and Ease: It is one of the biggest concern as the
change is the shape-shifter that influence the environment, workplace, customer and
competitors. As it is well known that humans are afraid of change if they enters into the
comfortable functions (Analoui.,ed., 2018). So this is one of the main issues which helps
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the Marvin and Smith's coffee shop as the changes will help in increasing the efficiency
within the firm. These changes may be managerial, structural, procedural or
technological.
Developing the skilled workforce: The regional aspects and culture of the Poland affects
the behaviour of the people living there. So the Marvin and Smith need to develop the
skills of great leader in order to create the effective team within the organization. So
there may be a communication and interpretation problem as company is establishing
the its business at new place.
fostering the culture of continues learning: There is a lot of problem in Retention of the
employees within the firm as employees leave their job due to the lack of development
and opportunity (Gutierrez-Gutierrez, Barrales-Molina and Kaynak, 2018). So It is also
one of the great concern as Marvin and Smith company have to also concentrate
towards staff retention by improving their skills and development.
Operation Management
Operation management is mainly concerned with the designing and controlling of
the process of production and redesigning business operations in order to deliver the
main services to the customer. For the expansion of the business activities in Poland,
Marvin and Smith has concentrated on the quality based coffee to the customers as
they buy the best coffee beans from Gumutindo Coffee who is a fair trade supplier in
Uganda. Also, this company focuses in high quality raw material which includes the tea
and herbal infusions for the operation management. Various issues regarding the
operation management within the newly established Marvin and Smith Coffee shop in
international market are described below:
 It may be possible that Marvin and Smith coffee is promoted by the people of the
south London as it is made according to the tastes and preferences of the
people. However, establishing a business in a international market may involves
the ineffective designing and production process will not be liked by the people
leaving in Poland.
 Limited resources in also one of the problem concerned with the operation and
management department.
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 Cost pressure from the global competitors is one of the main issue which need to
be addressed soon by the Marvin and Smith company.
 Demand fluctuations of the Poland also affect the main operations of the
business.
Profitability ratios:
To analyse the profitability of the organisation on which there has been consideration on the
main profits generated by the firm with reference to the total revenue retained by the
organisation from its sales. It defines the operational ability and gains which have been retained
with references to make adequate ascertainment over the profitability of the firm. It helps the
managerial professionals in analysing the costs implicated during production and operations on
which an alternative solution would have positive impacts on making corrective decisions.
Gross profit margin: The profit which is retained after paying off the costs of
production and sales through the sales revenue. However, it defines the gross profit left after
making payment of all the costs implicated during production such as direct labour, material and
overheads.
Gross profit margin gross profit *100 208000 57.78%
net sales 360000
Net profit margin: This is the profit left after making payment of all the operational
expenses. Therefore, on the basis of which company makes payments to the shareholders as well
as profit distribution among partners.
Net profit margin Net profit *100 26800 7.44%
Net sales 360000
Liquidity ratios: These are the ratios which shows the liquidity or solvency of the firm
in meeting the challenges as well as debt requirements during any financial crisis.
Current ratio:
Current ratio current assets 35400 5.71
current liabilities 6200
Quick ratio:
Quick ratio Current assets - inventories 8000 1.29
Current liabilities 6200
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Current business:
As per analysing the profitability as well as liquidity of Marvin and Smith’s coffee shop
on which it can be said that, both the ratios are reflecting positive outcomes. Thus, firm is
capable of meeting the risks relevant with the solvency. The idol ration for current ratios in 2:1
while the results defines it as 5.71. therefore, it is a favourable state for the business. Along with
this, as per considering the profitability of the firm on which gross profit has been generated
were 57.78% and NP ratio is about7.44%.
Expansion decision for Marvin & Smith’s coffee shops:
In accordance analysed outcomes son which it can be said that, profitability and
solvency of firm in on favourable conditions. Thus, the planning for expanding the
business will be effectives and firm is capable of bearing such expenses. Along with
this, it has been estimated that, in the upcoming period there will be growth in the sales
volume of the organisation as it will lead them for retaining better success.
CONCLUSION
From the above assignment it can be summarized that The European country
that can be chosen to expand Marvin and Smith's Coffee shop is Poland. As foreign
policy of Poland is quite strong which supports business. Financial stability of Poland is
also strong which might help Marvin and Smith's Coffee shop business. Then with the
help of marketing mix 4 P strategy it has been analysed that Marvin and Smith need to
focus on their intangible products as well with their tangible products, they will be
needing to follow value based pricing strategies for the selling of their products. They
can do mass media marketing in order to increase the popularity of their business.
Overall it has been analysed that this marketing mix strategy will help them to make
their coffee shop expansion plan in Poland. It has also been analysed that Marvin and
smith's Coffee shop will be facing a lot of challenges in expanding their business in
Poland. Most of the challenges are related to Human resource management,
operations, logistics and supply chain management. This will be quite challenging for
Marvin and Smith to manage these challenges and set their business in Poland. These
issue can arise within their business and can work as a hindrance in setting up their
business. Lastly it has also been analysed that the total profit that will be generated will
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be from total revenue that will be generated. Their gross profit margin will be
approximately 57 percent, net profit margin will be approximately 7 percent, current ratio
will be approx 5 and quick ratio will be approx 1.29.
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REFERENCES
Books and Journals
Verhoef, P.C., Kannan, P.K. and Inman, J.J., 2015. From multi-channel retailing to
omni-channel retailing: introduction to the special issue on multi-channel
retailing. Journal of retailing. 91(2). pp.174-181.
Dadzie, K.Q., and et.al., 2017. How firms implement marketing strategies in emerging
markets: An empirical assessment of the 4a marketing mix framework. Journal
of Marketing Theory and Practice. 25(3). pp.234-256.
Hys, K., 2017, October. Mechanisms Stimulating Actions Customer-Decision Maker on
the Market: Marketing Mix Instruments.
Botelho, J.M.M. and Kulishov, V., 2018. THE FEITORIA PRIME MARKET MODEL: A
CASE STUDY OF BILATERAL TRADE OPPORTUNITIES PORTUGAL-
POLAND. Scientific Journal of Polonia University. 27/(2). pp.11-17.
Shastak, M., 2018. Business planning as a tool of development of a successful
manufacturing company: case of “Coffee Roasters” LLC (Doctoral dissertation).
Cienski, J., 2018. Start-up Poland: The People who Transformed an Economy.
University of Chicago Press.
Gutierrez-Gutierrez, L.J., Barrales-Molina, V. and Kaynak, H., 2018. The role of human
resource-related quality management practices in new product development: A dynamic
capability perspective. International Journal of Operations & Production
Management. 38(1). pp.43-66.
Analoui, F. ed., 2018. Human resource management issues in developing countries.
Routledge.
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