The Coffee Shop Business Assignment

COURSEWORK COFFEE
SHOP

TABLE OF CONTENTS
INTRODUCTION .............................................................................................................1
QUESTION 1....................................................................................................................1
Business expansion in Finland.....................................................................................1
QUESTION 2 ...................................................................................................................2
Marketing Mix with context of coffee shop...................................................................2
QUESTION 3 ...................................................................................................................4
QUESTION 4....................................................................................................................5
CONCLUSION ................................................................................................................ 7
REFERENCES.................................................................................................................8

INTRODUCTION
In the present era, various companies has desire for exploring its operations with
purpose of attaining success. This could be performed with business expansion is
considered as stage of life of organization is fraught with context of perils and
opportunities. The present report will give brief discussion about Mervin and Smith's
coffee shop as it will be going overseas in Finland as it is the highest consumption
country. This report will be reflecting marketing mix for expansion plan abroad and
financial performance for tracing its viability along with human resource and operational
and supply chain challenges with its solutions.
QUESTION 1
Business expansion in Finland
The business will be expanded in Finland as there is huge consumption of coffee
or capita by Finnish people. In normal countries, 8 to 9 cups a day coffee is consumed
as in Finland approximate 30 cups of coffee is consumed. This trend is originated
because of extreme cold temperature as low as -40 degree in Northern Finland which
makes warm Thermos and after reaching home there is necessity for cup of coffee.
Even in hot summers, iced coffee is preferred with best comfort. The most
advantageous aspect is that multinational chain like Starbucks has not placed its outlet
in this country as it is only capital city of Helsinki and airport (Jessica Wood, 2018).
Coffee is replicated as high social activity in Finland as coffee shops are not ideal
meeting spot but it is also served in home also as this is culture of Finnish people. The
attraction of coffee towards Finland people is far beyond different multinational or
artisan espresso bars even it is small or medium sized outlet. In every age of
demographics, staggering 6% of women, 14% of men has reported consumption of
more than 10 cups of coffee per day which is twice of national average as 5% of every
gender has absence of coffee consumption. It has 5.5 million inhabitants in year 2017 is
the highest coffee consumption countries per capita as it was around 9.9 kg per capita
consumption in year 2016.
Finns are very odd as compared to other nationalities and during roast it is
preferred to 80% coffee is consumed with context of Finland as it is lightly roasted. Over
the past 10 years they have started for attaining accustomed for darker roasts. Usually,
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coffee is brewed with filter or drip coffee machine like Moccamaster. Espresso is
considered as innovative aspect which is highly consumed in cafes. Old age people
does not have any ideas about cappuccino or espresso as Kahvi is in Finland signifies
with light roasted filter coffee.
High consumption of coffee is consumed in Finland at work and home as Finn
initiates there day by coffee and even ends by it. Typically, the corridors of workplace
are directly stained with coffee spills as everyone walks around with coffee cup. It
imports its coffee directly through Brazil which is its main supplier than more and more
consumers of Finnish are highly interested for best quality along with variety. Its minor
speciality of coffee roasters directly emerge with opening up space which is in presence
of wide range of its origins along with suppliers in Finnish market.
Illustration 1: Coffee consumption average per capita
(Source: Coffee in Finland, 2017)
The above graph is related to coffee consumption per capita average that is
1310 cups per year which is more than three or halves per day Comparatively to
European countries. As Finland is far ahead with this consumption, as Swedish
neighbours are also highly fond of hot brown with average annual consumption of 1070
cups.
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QUESTION 2
Marketing Mix with context of coffee shop
Product: The Coffee in Finland is pronounced as Kahvi in Finnish and Kaffee in
Swedish. There will be use of the finest coffee beans through Gumutindo Coffee as fair
trade supplier in Uganda which will be laying special emphasis for enabling farmers in
Uganda as for earning independent income and to operate their own farms. There will
be presence of ethical concerns with its potential customers with perspective of location.
In the similar aspect, high quality tea along with herbal infusions must be directly
sourced with fair trade registered foundation with context of East African will be inspired
about snacks, cold drinks and pastries will be also offered (Wróblewski, Maciejewski
and Mokrysz, 2018).
There will be offering of relaxing environment with continued Ugandan influence
and practical with requirements of consumer such as access to power point socket for
purpose of charging laptops, phones and free Wi-Fi. There will be trained Baristas with
high standards and offering opportunities for wage and development which is beyond
and above competitors. The unique aspect, is related to offering of themed evenings
like board game night and chat from Nanna with purpose of advice and chat.
Price: there are different pricing strategy that includes bundle pricing, skimming
pricing, premium pricing etc. The organisation will be adopting premium pricing strategy.
It would be having presence of diverse offering of price as it will be directly influenced
with competition and slight premium. The products will be priced at premium range due
to high quality and value of brand as with belief that price is secondary aspect for
customer as it is crucial culture of Finland. Finnish people consider the quality of
products and services rather than its price. This will be giving two variants with context
of beverages such as small and large as price will be proportional for ordering quantity.
There will be selling of coffee from vending machine under this brand as its price will be
competitive comparatively from its multiple competitors such as Cafe Coffee day and
local outlets. This coffee's price will be varying as per supplement aggregated to coffee
such as cream, extra chocolate etc.
Place: Marvin and Smith has additional two coffee shops based in London and
structured for managing information system. In the present scenario, its business will be
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expanded overseas in Finland as it has huge consumption of coffee and is in huge
demand. Its outlet will be highly targetting upper middle class along with rich people
which will be modified in shopping mall where is high footfall. The menu design will be
according to Finland as this will operate for extracting high customer base and its
scheme will directly based on practices of industry standards. Furthermore, coffee is
consumed in and out home as 88% Finnish household consumes coffee. In the similar
aspect, out of home consumption has attained significant growth and contributed in
raising in expertise segment. The opportunities are raising in Finnish market with
significance of small scale roasters (Mohede, Tumbuan and Tielung, 2018).
Promotion: The coffee shop of Marvin and Smith has presence of strong ethos
with context of promoting on basis of equality and fair trade with expectation of staff for
respecting and valuing belief. In the similar aspect, for promoting and demonstrating this
attitude and behaviour in coffee shop. There will be presence of themed evenings and
playing short board games if no customers have to play with as it is area which should
be highlighted in process of recruitment. At initial phase, it will be giving free sample to
its consumers for getting review about product and to raise intention of purchase. It will
be laying special emphasis on digital media for promoting its campaigns and to raise
connectivity among consumers. Its import of coffee beans and quality should be
advertised in print media and television.
QUESTION 3
Human resource management: In this coffee shops, effective global workforce
must be created which signifies when to use ex-pats and when for hiring locals and in
similar aspect, method for creating innovative class of employed as glopats. The lack of
qualified managers are considered as major constraint with speed because of
expansion in overseas as in Finland. The knowledge-based society with its growth as
with pressure of opening with emergence of markets will directly led for cutting edge
global organization with recognition of more intellectual capital and human resource as
highly significant with financial assets with context of building sustainable competitive
advantage. With context of following lead, chief executives in this business expansion it
has to bridge yawning chasm among human resources of organization reality and
rhetoric as HR should be allotted for prominent seat with context of board room.
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Henceforth, appropriate training and development will be given to its workforce along
with best working facilities and conditions (Ten steps to a global human resources'
strategy, 2018).
The most salient problem is for understanding and maintenance about cultural
diversity as operating with people of different locations with different cultural
backgrounds with adaption of work style of business with innovative ideas and methods
for communicating and unfamiliar social practices. In case employees will be hired from
Finland only as its employee will be having different concept and idea for managing
employees and for running technology process on basis of its experiences back home.
So in this context, they must be open for innovative style of work and cultural
differences as hallmark of cultural diversity in HR in its coffee shop. The professional
development will be encompassing with extra training given by HR to its employees like
allowances for attending conferences, networking campaigns along with other programs
based on competency. This will help its employees for honing skills on basis of global
marketing, finance trends and international business development.
Operational and supply chain: There is requirement of more staff for handling
pressure with business of working in other country. There might be requirement of hiring
staff on ground in new country as it will be specified with vary from country to country
along with business to business. On the contrary, regardless with particular situation,
hiring more staff is also risk as its aim is not to raise overheads but to put trust in new
area as new people will meet face to face. It should be performed in better aspect then
it will raise revenues and margin which could easily pay with perspective of extra time
and staff for helping and managing innovative micro-multinational. Further, there is
requirement of ensuring that coffee shop is 100% prepared with problems of
international trade for growth and succeeding in efficient aspect. In the same series,
ensure about ready product is necessary as with presence of any alterations must be
altered as soon as possible because rolling of right product at right place and in right
time, attainment of success is guaranteed. Simultaneously, during hire it should be
capable for managing it as expertise could be leveraged, skills along with strength for
attaining objectives and goals (Ferreira, 2018).
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On basis of supply chain, imports, shipping, logistics and exports are things
which every enterprise has dedication of departments due to managing its supply chain
for crossing national boundaries could be replicated as real issue. Th beans are
imported from Uganda then there is contended on basis of geographical distance. On
the contrary, time and cost both are directly involved in this which is not only issue as
legislations should be also followed.
In this note, there must be development of strategy, budget and business plan.
As the worst aspect is that with absence of appropriate planning international expansion
is performed. There should be conducting of due diligence and with presence of solid
plan will make it easier for avoiding unexpected surprises.
QUESTION 4
Profitability Ratio
Gross profit ratio
Gross profit 208000
Net sales 360000
Gross margin ratio 57.78%
Interpretation: The above ratio is measuring profitability with reference to its
gross profit along with net sales on basis of its relationship. It has measured operational
performance of business entity. The Marvin and Smith's coffee shop has gross margin
ratio of 57.78% which is very high and preferable (Asche, Sikveland and Zhang, 2018).
The business is reflecting that the profitability of the firm is high and it is gaining more
profits.
Profit margin ratio
Net Profit 26800
Net sales 360000
Profit margin ratio 7.44%
Interpretation: The above table is reflecting net profit margin as it is earning net
profit of 26800 which shows that there are huge expenses but its profit margin ratio is
recommendable as 7.44% against net sales of 360000.
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Liquidity ratio
Current ratio
Current Asset 35400
Current Liability 6200
Current ratio 5.71
Interpretation: There is measurement of liquidity of Marvin and Smith's coffee
shop with context of current ratio (Setiawan and Amboningtyas, 2018). The ideal ratio is
of 2: 1 where its ratio is exceeding the target which shows that company is capable for
repaying its current liabilities on basis of current assets.
Acid test ratio
Inventory 8000
Quick asset 27400
Current Liability 6200
Acid test ratio 4.42
Interpretation: There is measurement of acid test or quick ratio where short term
obligations are met with quick assets. In simple words, to repay its current liabilities in
short duration which is less than a year. The ideal ratio is 1: 1 whereas Marvin and
Smith's coffee shop has ratio of 4.42 which is higher than ideal amount and beneficial
for business entity.
It could be evaluated that in present scenario, current business is performing
such aspect which is giving high profit margin. As with context of liquidity, its position is
in effective and efficient manner. The decision about business expansion in overseas is
at appropriate time as on the contrary, it must consider various implication which might
impact negatively such as tax decisions. It should be capable for controlling its
operational expenses which might lead to negative profit margin and expansion must
follow rules and regulation of business expansion in overseas such as Finland. In the
similar aspect, while evaluating liquidity it has been traced that Marvin and Smith's
coffee shop has liquidity in high format comparatively to target as its assets are blocked
so it must go for business expansion or for investment. According to the acid test ratio
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the ideal acid test ratio is 1 : 1 which shows that company have equal assets as liability.
The ratio provides that the acid test ratio of company is 4.42. which shows that the
liquidity position of the firm is good and have more assets than its liabilities.
CONCLUSION
On basis of above report it could be concluded that business expansion and
trading overseas helps in raising margin and attains for fostering growth. It had been
shown that before expansion, it must prepare plan in efficient aspect and execution
must be in effective manner. The Marvin and Smith's coffee should is very feasible for
this business expansion as it is having high profit margin along with huge expenses as
well. In the similar aspect, it has been articulated that business expansion has
involvement of variety of innovative legislation along with trading laws and customs
which should be appropriately researched and inclusion in plans.
It has shown that buyers in Finland has presence of strict requirements with
perspective of coffee similarly to other European countries as it should follow WU legal
requirements which are applicable to coffee and mainly dealing with safety of food and
in this context, traceability and hygiene is very significant theme. Furthermore, it had
been observed that sale of sustainable coffee is growing in Finland as it is certified by
UTZ. The fair trade and organic has significant presence in niche products. It has been
evaluated that end market prices of coffee are highly dependent on market segment
which is targeted. While evaluating its financial statements, there is measurement of
overall financial performance which shows that company is capable for business
expansion in overseas as in Finland which is the highest coffee consumption European
union country.
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REFERENCES
Books and Journals
Asche, F., Sikveland, M. and Zhang, D., 2018. Profitability in Norwegian salmon
farming: The impact of firm size and price variability. Aquaculture Economics &
Management. pp.1-12.
Ferreira, J., 2018. Fostering sustainable behaviour in retail: Looking beyond the coffee
cup. Social Business. 8(1). pp.21-28.
Mohede, C. E., Tumbuan, W. A. and Tielung, M. V., 2018. ANALYSIS OF PACKAGING
ELEMENTS AND ITS IMPACT TO CONSUMERS BUYING DECISIONS USING
FACTOR ANALYSIS TOOL ON COFFEE PACKAGING PRODUCTS. Jurnal
EMBA: Jurnal Riset Ekonomi, Manajemen, Bisnis dan Akuntansi. 6(2).
Setiawan, H. and Amboningtyas, D., 2018. FINANCIAL RATIO ANALYSIS FOR
PREDICTING FINANCIAL DISTRESS CONDITIONS (Study on
Telecommunication Companies Listed In Indonesia Stock Exchange Period 2010-
2016). Journal of Management. 4(4).
Wróblewski, Ł., Maciejewski, G. and Mokrysz, S., 2018. Consumer preferences on the
coffee market in 2 developing Central European Countries: on the 3 example of
Poland 4.
ONLINE
Coffee in Finland. 2017. [Online]. Available through <https://finnpartnership.fi/wp-
content/uploads/2018/01/Coffee-in-Finland-2017-report-final.pdf>.
Jessica Wood. 2018. Why Finland Drink More Coffee Than Any Other Country. [Online].
Available through <https://theculturetrip.com/europe/finland/articles/why-finlands-
coffee-culture-reigns-supreme/>.
Ten steps to a global human resources' strategy. 2018. [Online]. Available through
<https://www.strategy-business.com/article/9967?gko=db7b9>.
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