Business Expansion Plan: Marvin and Smith Coffee Chain in Finland

This report analyzes the feasibility of expanding Marvin and Smith's coffee chain to Finland. It examines the country's coffee consumption, market competition, and the impact on the company's marketing mix, supply chain, profitability, and liquidity. The report concludes that Finland presents a promising opportunity for Marvin and Smith to expand their business, leveraging their unique coffee blend and customer experience.

Business Essential Advanced
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Table of Contents
Introduction..................................................................................................................................3
1. Choice of Country..................................................................................................................4
2. Marketing mix..........................................................................................................................6
3. Geographical Area implication...........................................................................................8
4. Effect on the profitability and Liquidity..........................................................................10
5. Overall viability of expansion............................................................................................11
Conclusion..................................................................................................................................12
References..................................................................................................................................13
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Introduction
Marvin and Smith are looking forward to flourishing and expand their business in a
different country due to increase in the demand for their coffee inspired by East African
Coffee. The report consists of the prospect for the establishment of the new coffee
chain in other countries. There is the inclusion of the Marketing Mix including 4 Ps with
respect to the expansion that is being considered by the Marvin and Smith. There is an
analysis of the implication the expansion will have on the supply chain management and
over the advantage that they will have on competitors. There is also an evaluation of the
impact that will be there on the profitability and Liquidity of the company along with
viability of the expansion at the current stage of Marvin and Smith.
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1. Choice of Country
Coffee is the most loved beverage all over the world. There are various aspects that are
analyzed before the decision regarding the selection of the country for the expansion
and growth. Marvin and Smith are looking to expand the coffee business in the other
countries due to increase in the demand and successful acceptance by the customers
of the fusion coffee made out of the beans from Gumutindo Coffee imported from
Uganda. Europe is a very big market for the consumption of the coffee with an
approximate consumption of the around 30% of the global consumption (Ministry of
Foreign Affairs, 2016). The country which can be best suitable for the expansion and
growth of the coffee chains in Finland because of the following reasons:-
Coffee consumption - The coffee consumption is the most by the Finland in the
European Union. Finland average coffee consumption is 12.00 Kg per person per year
followed by the Norway, Iceland, and Denmark etc. (World Atlas, 2018). The market of
the Finland will be an important place as the demand for the coffee will be higher in
comparison to the other countries. The temperature remains moderate of the country
with being 17 degree C highest and going down up to - 6 degrees which will increase
the demand of the coffee. The market is very big and diversified for the coffee. The new
fusion with the coffee and beans from the Uganda looks to have a great scope. The new
taste will also make the people to try the coffee and will further result in increase in the
profitability and growth of the company.
Market competition – It is important that the competition must be analyzed before
starting the new venture, especially in the new countries. The analysis of the
competition helps in determining the future growth and prospects. The sustainability can
be determined by the market condition and competition in the market. Finland is open to
the diversification and new taste in the coffee business. They are also tempted towards
the organic coffee which is a positive sign for the Marvin and Smith coffee. The
competition in Finland is very less in comparison to the other countries which will be
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beneficial for the Marvin and Smith to capture the market and increase the profitability of
the company.
(Figure – Coffee consumption of the top 10 countries)
(Source – World Atlas, 2018)
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2. Marketing mix
Marketing Mix is the technique used by the organization to analyze the market and
advertise the product that is being sold to them. It helps to achieve the marketing
objective depending on the market condition. The marketing mix considers 4 elements.
Price – The price is an important factor for the selling of the product. There are various
factors included in the calculation of the costs (The Economic Times, 2018). There are
different types of the pricing strategies that can be used for the determination of the
price of the product. The price is a critical factor for the demand of the product. The
Marvin and Smith are also focused on providing the customers a good taste with some
fusion because of which they can keep the price even a bit above than normal. It is
important that the consumers are satisfied with paying the price and feel that the
experience was of value. This could help in keeping the existing customers and also
attracting new customers (Mintz, and Currim, 2013).
Product – The product refers to the item that is being provided for the selling of the
product. It is important that something innovative must be provided to the consumers
than the available product in the product (The Economic Times, 2018). The product
provided by the Mervin and Smith is very innovative and fusion with the beans from the
Gumutindo coffee from Uganda. The product provided is new and its taste is different
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Place Price
Promotion Product
Marketing
Mix

from the available coffee in the market which will provide the competitive edge over the
other rival in the market.
Place – The place is an important factor and refers to the market where the product is
going to be sold. It is important to analyze the demand for the product that is going to
be sold by the company (The Economic Times, 2018). The point of sale that is decided
is the highest consumer of the coffee. The demand is higher for the coffee and also
welcomes any new taste in it along with the fusion of it. It is a positive place for Marvin
and Smith as they are providing something new in the same coffee taste. The organic
coffee is also welcomed in the country which can help in further extension and growth.
Promotion – The promotion can be defined as the ways through which people are
aware of the product that is being offered (The Economic Times, 2018). It is important to
properly promote the product, especially in the new area and place. Marvin and Smith
can take various steps to advertise their coffee chain and advertise about the new type
of coffee that they are offering along with the providing of services with the specialist
staff and a memorable experience to the consumers. The promotion will lead to
attracting the customers and increase the demand.
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3. Geographical Area implication
a. Gaining Competitive Edge
Marvin and Smith are already famous in the native place. There is a huge demand in
the existing point of sale. There is high appreciation in the domestic market from the
tourists also. The coffee provided by them with a different taste has highly satisfied the
customers along with the experience and services that are being provided by the staff.
The organic coffee in the same streamline is also being preferred by the consumers in
the Finland which will be favorable for the organization. The growth and expansion is a
part of each and every organization and when the success is there it is important that
there is an expansion of the same. The Geographical area expansion will help Marvin
and Smith to gain a competitive advantage over the existing rivals. It will help to create
a brand name and goodwill among the target market thus resulting in an increase in the
customers (Zaefarian, et. al., 2013). The organization growth can be determined with
the help of the profit that is being earned and by also the market that is being captured
by them. Once there is expansion it will help in making the customers recognize at the
global level along with the already established rivals such as the Starbucks etc. (Huang,
and Sarigöllü, 2014). The Competitive edge can benefit the organization in different
ways. The expansion will lead to increase in the demand resulting in the increase in the
profitability and growth. The goal and objective of the sustainable success can be
achieved by getting an edge over the competitors in the market.
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b. Supply chain management
Supply chain management is an important factor while expanding in the geographical
context. The supply chain management should be strong and effective for the long-term
sustainability and growth. Marvin and Smith are also bringing the coffee beans from
Uganda it is important that there is proper inventory management at the domestic and
newly established market. Inefficiency in the supply chain management can result in an
increase in the variable cost of the company and also create the situation of stock out
(Fernandes, and Pinho, 2016). The starting of the business is very important for an
effective management and cost to be as minimal as possible thus there must be
properly allocation of the funds. Marvin and Smith must take adequate steps to
effectively manage the process of the supply chain including the reorder level. The
Coordination must be effectively done by the specialized personnel so that the inventory
must be managed. The expansion and growth affect the supply chain management
most as it is difficult to manage the supply across the geographical boundaries
(Fernandes, and Pinho, 2016). The Coffee beans used are ordered from Uganda which
needs to be managed with analysis of the time taken to reach the destination. The
transportation and local another factor must also be taken care so that there is timely
delivery.
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4. Effect on the profitability and Liquidity
The profitability and Liquidity depends upon the revenue generated and the expenses
incurred for the production of the product and services offered. It is important there is
proper analysis of the allocation of funds. The profitability and liquidity will increase as
per the data and analysis of the demand. In the beginning it is important that the
organisation is able to recover the cost that is being incurred by them to provide the
product to the customer. There must be strategic planning for meeting the revenue that
is required to repay the cost involved. It can be seen that there is continuous growth in
the coffee drinkers and Finland is most consuming country in the European Union which
is a positive sign for the company. Merve and Smith must effectively manage the supply
chain management so that there is not a position of the stock out or increases the
variable cost of the company (Fernandes, and Pinho, 2016). The company is not
earning a very high profit and the establishment of the new site at new place will require
an investment which must be looked. The company can acquire funds from various
sources each having its cost attached. The fund generated from banks or financial
institutions will attract the interest cost which needs to be analysed before acquiring.
The place is new and market trend and data looks promising through which it can be
stated that the profitability of the company and liquidity will become stable but if there
are some unfavourable results there can problem for the Merve and Smith in repayment
of the loan taken. The company can use the capital available for the establishment of
the coffee shop chain which will be an effective option as it will not attract any interest
cost but can also mismanage the fund allocation. The liquidity will become strong and
profitability will increase. There is better opportunity for the company as there is not
much rival, the company position is strong with promotion and liking among the tourists
of the new taste, The target market is good will place being highest consumption
country and open for the diversification and new taste it can be stated that there will be
increase in the profitability and liquidity of the company (Estherdoan, 2014).
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5. Overall viability of expansion
The viability of the expansion depends upon the various factors such the long-term
growth and sustainability, acceptance of the new taste, value for the product provided to
the seller and profitability of the same. The expansion of the new coffee looks
promising. The European countries are the most consumed area of the coffee. Finland
is the highest in terms of per kg of being 12 and can increase higher if the people below
the age of 15 are excluded (World Atlas, 2018). It is important that the product provided
by the company must be something new and different from what is already on the
market. Marvin and Smith are providing the fusion of the coffee beans that are brought
from Uganda. It is a type of organic fusion with the taste inspired by the taste of Eastern
as well as African. The product is new and innovative which will help to get a
competitive edge over the rivals (Li, et. al., 2017). It is also important to look at the rivals
in the market and in case of Finland there not many big players which are a positive
sign for the company that can help the company in capturing the market. It can be also
stated that the company is able to get an appraisal in the hometown and very quickly
opened two shops in London itself. There is regular demand for the type of coffee they
provide with the specialized staff making the experience of the customers valuable
resulting in growth and demand. The people are also fond of the organic coffee and the
fusion of it with natural herbs will be an advantage for Marvin and Smith. The customer
satisfaction has played an important role through which it can be analyzed that there
can be an equal amount of opportunity in Finland and the expansion is viable for the
business to grow and expand resulting in high earning of the revenue along with the
profitability.
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Conclusion
It can be concluded with the help of the report that the expansion plan of the company
looks effective. It can be stated that Finland can be a good prospect due to high
consumption and demand. The company positive point is the new infusion of the coffee
beans with an organic touch of natural herbs. The experience and value that they
provide are also important to increase the demand and retain the customers. It can be
concluded that the organization must focus on effective and efficient management of the
supply chain. There will be a positive impact with an edge over the competitors that are
there in the market. It can be stated that the popularity and expansion of the shop will
be profitable for the company to capture the market. The overall business expansion in
Finland looks promising and can result in long-term profitability and growth.
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References
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U.S. Isn't in the Top 10. [Online]. Also available at
https://www.theatlantic.com/business/archive/2014/01/here-are-the-countries-
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03-2018]
 Fernandes, R. and Pinho, C., 2016. Support International Business Expansion
with Sequential Reviews. In Sustainable Supply Chain Management. InTech
 Huang, R. and Sarigöllü, E., 2014. How brand awareness relates to market
outcome, brand equity, and the marketing mix. In Fashion Branding and
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advantages. Asia Pacific Journal of Management, 34(1), pp.19-46
 Ministry of Foreign Affairs, 2016. What is the demand for coffee in Europe? CBI.
[Online]. Also available at https://www.cbi.eu/market-information/coffee/trade-
statistics/. [Accessed on 14-03-2018]
 Mintz, O. and Currim, I.S., 2013. What drives managerial use of marketing and
financial metrics and does metric use affect performance of marketing-mix
activities?. Journal of Marketing, 77(2), pp.17-40
 The Economic Times, 2018. Definition of 'Marketing Mix. The Economic Times.
[Online]. Also available at
https://economictimes.indiatimes.com/definition/marketing-mix. [Accessed on 14-
03-2018]
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 World Atlas, 2018. Top 10 Coffee Consuming Nations. World Atlas. [Online]. Also
available at https://www.worldatlas.com/articles/top-10-coffee-consuming-
nations.html. [Accessed on 14-03-2018]
 Zaefarian, G., Henneberg, S.C. and Naudé, P., 2013. Assessing the strategic fit
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