Business Essentials: Expanding Marvin and Smith's Coffee Shop into Spain

Business Essentials
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Table of Contents
Introduction:....................................................................................................................................3
1. Research and decide on a country (within the European Union) that Marvin and Smith’s coffee
shop could expand into. Justification for your choice must be given regarding choice of country,
logistical considerations, ethical considerations and the structural challenge of expanding into
that country. Note that you should assume for the purposes of this assignment that the Brexit
negotiations will make no difference to the trading environment as it is at present.......................3
2. Present a tailored marketing mix in relation to the coffee shop expansion plan abroad.............5
3. What are the implications of the need for Marvin and Smith’s to cover a wider geographical
area in terms of a different country? Consider any impact this may have on any two of the
following and show how these issues are interlinked:.....................................................................7
4. Using the financial information provided, evaluate two profitability and two liquidity ratios
and discuss how this may influence decisions available to them....................................................9
5. Write a concluding summary about the overall viability of overseas expansion at this stage.. 11
Conclusion.....................................................................................................................................12
Reference list:................................................................................................................................13
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Introduction:
This business report has been prepared to plan an expansion for a renowned coffee shop in the
other countries within the EU. The organization Marvin and Smith’s coffee was established in
the year 2016 and at present, it is one of the renowned coffee businesses globally. This business
is planning its expansion after getting immense success in UK. The analysis of this report is done
in order to gain a clear geographical idea about Spain, as it is the country chosen in which the
company will expand their services. This report also highlights the strategies, which will help the
company to expand their services in a proper way within the geographical location. The reason
behind choosing Spain as the country in which the company will focus on to expand their
services is the preference of the Spanish people. Coffee is highly preferred among the Spanish
people and the market of Spain is very huge, which will eventually help Marvin and Smith’s
coffee shop to connect with more customers and gain more profit. This report will also shed light
on the marketing mix strategy and its role in the expansion of Marvin and Smith’s coffee shop in
Spain.
1. Research and decide on a country (within the European Union) that Marvin and Smith’s
coffee shop could expand into. Justification for your choice must be given regarding choice
of country, logistical considerations, ethical considerations and the structural challenge of
expanding into that country. Note that you should assume for the purposes of this
assignment that the Brexit negotiations will make no difference to the trading environment
as it is at present.
Marvin and Smith’s Coffee shop has established them as a highly competitive business in UK.
The company has never-ending customers and it is highly preferred by the international visitors.
The present state of success of the company has opened a door to expand their business in a new
country targeting a new segment of customers (Meyer and Peng, 2016). The coffee market in
Spain went through huge growth in 2012 and the rate of growth was 4.26 %, however this
percentage then continued to decline and kept on being steady at a downbeat average growth
pace of 1.25 %. Due to this growth percentage, it is evident that Marvin and Smith’s coffee shop
will get huge profit if they expand their business in such a country (Knoke, 2018). Marvin and
Smith’s coffee shop is known for practicing fair trade in business. Fair trade plays very effective
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role in the industries of Spain and the reason behind this is the customers’ choice towards
authentic products.
Figure 1: Economic Statistics of Spain
Source: (Statista, 2018)
As per records, the coffee industry in Spain achieves a huge amount of revenue, which highlights
the potential of expansion of this industry. Spain has experienced huge investments in coffee
industry due to the practice of fair trade and this has allowed coffee business to enhance their
sales in order to maintain a proper payment structure as well as better employee legislations
within the industry. The practice of the country towards fair trade has made it inevitable that
Marvin and Smith’s coffee shop will also expand their business in Spain in no time. For
expanding the business, a secondary market research is performed which helped in shedding
light on the area that will be best for starting a new coffee shop. The country has huge potential
towards coffee industry because families run most of coffee businesses in Spain. The identified
place is Valencia, which has the best possibility of profit gain for the business, most of the coffee
businesses of Spain are in Valencia. The choice of this place is because Valencia is among the
oldest market area in Spain (Fritsch et al., 2015). Presently Coffee Productions is the largest
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