Coffee Shop Expansion in Finland

This assignment examines the viability of opening a coffee shop in Finland. It delves into the country's high coffee consumption culture, analyzes profitability ratios using current assets and liabilities, and highlights the favorable market conditions for coffee businesses. The report concludes that Finland presents a promising opportunity for expansion due to its strong demand for coffee.

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PROJECT

EXECUTIVE SUMMARY
Marvin and Smith and Hank and Patty are two businesses which was opened
simultaneously and engaged in running a coffee shop for acquiring maximum revenue. Basically,
main motive is to expand their business across international boundaries by considering necessary
facts or figures such as; profitability ratio, acid test ratio, income statement and so on. Therefore,
assignment is going to focus on various factors which must be studied while expanding a
business into several geographical region. Traditional marketing mix, reason behind selecting
European country for expansion process and various other elements are also outlining in this
project. Mainly, an organization needs to make changes as per consumer need or demand for
understanding each or every aspects for maintaining their goodwill at marketplace. Although,
few country are having high range of coffee demand but some are medium which shows that
company needs to consider indispensable elements before making any decision. Apart from this,
one thing is determined that number of competitors are emerging for gaining maximum funds
which is also influencing the organizational strategies. Thus, overall assignment is going to focus
on some major elements which must considered by Marvin and Smith while establishing their
new branch in other nation.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION ..........................................................................................................................2
Q1. Justification for expanding Marvin and Smith's in Finland.................................................2
Q2. Marketing mix......................................................................................................................4
Q3. Need of covering geographical area and impact of issues...................................................5
Q4. Impact of profitability and liquidity on decisional process..................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9
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INTRODUCTION
Expansion of multinational companies and corporate world is a very long process
because fluctuation in various internal and external factors have a major impact on a company
performance. Marvin & smith and Hank and Patty these two organization working in a
partnership for generating more or more revenue (Anderson, Sweeney and Williams, 2011). In
order to fulfils their dream they wanted to expand their business in new country to gaining
maximum benefit by using various marketing strategies. Thus, overall assignment is going to
highlight the measures taken by Marvin and Smith while expansion process in order to minimize
the possibilities of errors.
Q1. Justification for expanding Marvin and Smith's in Finland
European union was expanded across the international boundaries in which almost 28
nations are falls by having their distinct uniqueness such as; nature, buildings, culture and
various other factors. All these elements make entire union distinguish from each other.
Reason for selecting country:- After analysing necessary information about whole
Europe such as; legal consideration, drinkers of coffee, cafe culture, lifestyle etc. it has been
analysed that “Finland” is most suitable country for expanding coffee business. According to
survey report it is identified that around 12.0 kilogram coffee is used by per person in a single
year which is one of the top most achievement of this nation. In fact, kids, youngsters, aged
every members are surrounded by coffee and somehow get addicted with them. Basically,
around eight or nine cups of coffee are consumed by a specific individual which is minimum but
at maximum level most of them drink almost 30 cups in a single day. However, this situation
arises due to presence of extreme cold such as; as per weather department temperatures of
northern Finland diminished around minus 40 degrees (Bradford, 2015). On the other hand, at
the time of hot summers Finnish people are consuming iced coffee for better health and
relaxation.
Facts based on culture, lifestyle and drinkers:- In ancient time around 18th century it has
been identified that coffee is used by masses on daily basis in order to maintain their life style
and standards. In fact, beverages which was reserved for holidays are consumed by Finnish on
daily basis for enjoying life. Coffee culture means every individual is preferring coffee while
meeting, family togetherness, friends groups and so on. It means they are maintaining their
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country culture for impressing others and supporting each other while involving in working
similar activity. Thus, coffee is extended throughout the rural Finland as every individual is
consuming thrice in a day and more than this as well as becoming a most integral part of meals.
Traditionally, people living in Finland are using coffee while having pastries by dipping pastry in
a coffee and few members are pouring the hot beverage in a saucer. It means, drinking coffee
become a culture for entire nations as society members are enjoying this by maintaining
standard. Apart from this, young generations are travelling across the international boundaries
and gains information about new customs by which they get attracted. Along with this also learn
new method of designing coffee in order to change taste and try something new or different from
others (Burke and Friedman, 2011). Hence, invention of advanced machinery of preparing coffee
is very helpful for common people and make their life more easier. For instance; one can prepare
cup in a mini seconds and having fun at any time.
Ethical consideration:- Expansion is not an easy task because while establishing a new
branch company must face numerous of issues, obstacles and problems such as; exploitative
activities, wrongful conduct, language barriers, culture issues and so on. It means, Marvin and
smith needs to focus on various other factors also before establishing a new business at
marketplace. In fact, number of welfare programmes are introduced by political parties for
reducing the conflicting situations at societal place and aids in overcoming distinct obstacles
which may affect the working conditions as well as entire corporate world. Ethics is all about
respecting rights of others and governmental rules in order to minimize the possibilities of
misinterpretations. It means company needs to follow necessary elements before making any
changes or during expansion process so that they can easily overcome business problems in a
defined time frame.
Structural elements:- According to survey it has been analysed that Finland is a very
well structured nation by having outstanding buildings which attracts minds of maximum clients.
Mainly, companies have opportunities to gain maximum benefits by offering qualitative coffee
with advanced features as it aids in seeking the minds of high range of customers. In fact, this
nation is not facing a problem regarding infrastructure, technical and so on. Therefore, selected
firm acquire maximum opportunities while expanding business in Finland due to increment in
consumer demand (Cavusgil, Rammal and Freeman, 2011).
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Logistics:- European countries are surrounded by outstanding facilities of logistics due to
proper management of this department. In fact, aids in creating a competitive stage for
consumers due to comprehensive of logistics functions. Along with this, overall department is
offering best possible experts for handling all difficult situations in much appropriate manner.
One of the most beneficial things which is served by logistics section is that they can promise
with clients for giving best facilities.
Apart from this some other things which shows that company can definitely prefer
Finland for expansion of coffee shop are – fair trade, providing necessary facilities to their
employees, environment, impressive location, suitable sources of raw materials and so on. All
these elements are showing that selected nation is most appropriate one for business of coffee as
demand is high as well as outstanding surrounding. Apart from this, prominent thing is that
company can easily attain their target by satisfying customer needs or requirements.
Q2. Marketing mix
After selecting a best nation for establishing a new business now its time to promote
specific goods or services across various geographical region for maximizing income. Along
with this, wanted to establish a goodwill of a nation at marketplace by satisfying needs or
demands of domestic as well as foreign clients. Basically, Finland is surrounded with coffee
drinkers due to which managers of an enterprise will not face that much of problem while
conducting several marketing activities (Guffey and Loewy, 2012). Hence, marketing mix must
be considered at the time of encouraging sales. Thus, four important P'S are described as
follows:-
Product:- Marvin and Smith is trying to
expand their business in Finland because
demand of coffee is increasing day by day.
Thus, it is essential to analyse the need of
coffee at marketplace for increasing their
revenue. In fact, common people of Finland is
curious to have coffee either its winter and
summer because it become a culture. Basically,
coffee is designed by an organization with the
help of advanced features in order to seek the
Price:- Finland is a very well established and
developed nation as well as every member are
capable of buying coffee because they get
addicted towards it. Thus, in order to seek the
attention of consumers Hank and Patty is
offering affordable products without charging
extra amount. Beside this, some of the
essential factors are considered by managers
while finalising price of product are described
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attention of millions clients. As per given case
study it is analysed that Marvin and Smith is
going to introduce a new coffee shop by
utilizing numerous of coffee beans (Hair,
2015). Moreover, additional refreshments are
also offered such as; snacks, pastries and other
elements.
below:-m
 Identify the most appropriate price for
specific coffee?
 In what way price is easily paid by
consumers ?
Promotion:- After emerging of modern
technologies at marketplace companies are
having numerous of opportunities while
making strategy for promoting goods or
services across the international borders. For
example; social media, internet sources, online
advertisement, designing pamphlets, handouts
and so on. Main objective of these factors is
promote coffee in various regions of Finland
for gaining more customers. Additionally,
online service is one of most prominent
technique of acquiring customers trust. Along
with this, sometime they also offer discounts
and combos in order gain trust or loyalty of
maximum customers.
Place:- According to this factor, company
needs to select best suitable place for
establishing their branch because locations
plays a very crucial role in maximizing sales.
Thus, it is essential to consider necessary
factors such as; where customers are hanging
more or more, shopping, historical monuments
and different places to visit. It means, place
which is selected by common people for
spending their time in a peaceful environment.
Therefore, most indispensable element is
surrounding of a nation.
Hence, these above traditional marketing mix must be analysed while conducting
marketing activities because it assist managers towards corrective path by defining each or every
aspect (Lamb, Hair and McDaniel, 2011). Thus, two main factors which is encountered by
selected firm is described as follows:-
Q3. Need of covering geographical area and impact of issues
An organization needs to focus on various useful factors or elements while expansion
process because it helps an organization in attaining their set targets or objectives. In fact, every
geographical region are having different barriers and profitable things which may help company
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while attaining set objectives. Basically, Marvin and Smith needs to analyse various region in
order to identify the most suitable location for establishing a coffee shop.
Organisation culture:- According to this element it has been assessed that culture of an
enterprise is linked with values and behaviour which is contributing in a social environment. It
would give aggregate esteem, convictions of an association workers and other part those are
related with an organization. The common esteem is assuming an essential part in figuring
significant elements that an individual and colleague are putting forth best nature of items. It is
an inventive impact by utilizing transcendent culture of an association. It has been seen that
specific viewpoints for changes in an association to define a successful business condition which
is being looked by Hank and Patty . Therefore, analyses of culture is indispensable for
maintaining the peaceful environment at workplace because it aids in attaining set objectives and
targets (Patten and Newhart, 2017).
There are different standards and esteem which is constantly connected with the general
population that are useful in making a compelling examination of the market. Social norms needs
to be followed in suitable manner in order to run an organization in ethical way without
exploiting the rights of common people. The arranging will be made for seeking the attention of
each kind of clients that are have a place with various culture. Thus, main thought process behind
doing as such is to not influence the social parts of the country. The custom and ceremonies
individuals from an association to influence prizes to take after esteem and standards of state of
mind to individuals have in agreement of espresso business.
Basically, correspondence framework would be more sufficiently positive to decrease
gaps among different countries culture. Thus, few successful systems those are having immense
effects on different phases of arranging process. For every sort of business, it is essential to have
positive administration in agreement to manage social ramifications. It has been confirm that
hierarchical culture will be dull without a pioneer is in more hard to manage their business in
more agent way (Sundareswaran, 2011).
Gaining competitive advantage: It has been watched that Hank and Patty are managing
different difficulties which are influencing the efficiency of an association. They required to
make investigation of them to produce more successful focused advantages over the other same
line business association. It would be famed as one of the pivotal aspects to confront their rivals
to build their benefit through showing huge incentive to the clients. This will be conveyance
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either through offering low value items or some different means. These are useful in achieving
most extreme preferences over the other organization.
It is one the most essential part to manage the contenders to improve their benefit through
offering profitable items and administrations to their general clients. It will helps with making
high esteem either by the methods for low cost or by other alluring offices. There are a portion of
the huge issue those are should have been thought about in agreement to achieve long and here
and now points and goals. Giving better nature of products and ventures than customers that are
more appropriate from each other contenders. Since each needs more powerful quality in the
espresso that could fulfils their requirements and needs.
On contrary to this, cost is second most profitable worry for the business that can have
colossal effects on the profitability and development of an organization. They have to set cost by
the knowing each client acquiring power. This would be a standout amongst the best courses by
which Marvin and Smith can expand most extreme benefit and set goodwill at marketplace in a
defined time frame (Tyson, 2014). Clients fulfilment will be the essential angles to gather most
extreme outcomes from conveying more appealing administrations as contrast with different
contenders. The second thing is related with consistency in diligent work which would be resolve
through utilizing benchmarking strategies
Q4. Impact of profitability and liquidity on decisional process
According to given case study it is analysed that both the members are going to launch a
new business that is coffee shop in Finland. Therefore, it is essential to analyse financial
statements in order to understand the negative and positive impact of introducing new business
(Using the Marketing Mix to Strengthen your Marketing Strategy, 2016). Thus, by considering
profit and loss Hank and Patty make take an appropriate decisions. Basically, around 26800
revenue is generated during time.
Profitability ratio: According to this factor it has been identified that profitability ratio
is considered as most effective accounting metrics. In fact this tool is utilized by an organization
for assessing the potentiality of an organization by judging the profit earned by an enterprise by
comparing it with total expenses as well as expenditure that is charged while accounting time
frame.
Gross Profit = 208,000
Net Profit = 26,800
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Sale = 360,000
Ratios Formula Results
Gross profit Margin Gross profit / Total Sales *100 208000/360000*100
= 57.8%
Net profit Net incomes / Total Sales *100 26800/360000*100
=7.4%
According to above data of profit and loss accounts appropriate net profit and gross profit
of Marvin and Smith can determine. Thus, After fulfilling entire expenses of an organization its
time to reach at well effective position by gaining sufficient amount of revenue.
Liquidity ratio:
Current ratio Current assets / Current liabilities 35400/6200= 5.7
Liquid ratio Liquid assets / Current liabilities 35400-8000/6200=4.4
CONCLUSION
From the above report it has been summarised that expansion process is not an easy task
because number of business activities needs to accomplished before implementing a new product
at marketplace. In fact above assignment was fully focussing on several indispensable elements
which is considering by partners while introducing a coffee shop. Throughout the study it is
analysed that Finland is most famous or world largest nation for coffee drinkers due to
fluctuation in weather and presence of extreme cold. Along with this culture of a nation is also
depend upon this only as most of Finnish are addicted to coffee and drinking around 30 cups in a
day. Moreover, report is all about analysing the profitability ratio of an organization with the
help of different elements as well as shows necessity of coffee. Hence, it has been analysed that
Finland is seen as a most suitable nation for expanding a coffee shop due to high level of
consumer demand.
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REFERENCES
Books and Journals
Anderson, D. R., Sweeney, D. J. and Williams, T. A., 2011. Essentials of modern business
statistics with Microsoft Excel. Cengage Learning.
Bradford, M., 2015. Modern ERP: select, implement, and use today's advanced business systems.
Lulu. Com.
Burke, R. and Friedman, L., 2011. Essentials of management and leadership in public health.
Jones & Bartlett Learning.
Cavusgil, S. T., Rammal, H. and Freeman, S., 2011. International business: The new realities.
Pearson Higher Education AU.
Guffey, M. E. and Loewy, D., 2012. Essentials of business communication. Cengage Learning.
Hair, J. F., 2015. Essentials of business research methods. ME Sharpe.
Lamb, C. W., Hair, J. F. and McDaniel, C., 2011. Essentials of marketing. Cengage Learning.
Patten, M. L. and Newhart, M., 2017. Understanding research methods: An overview of the
essentials. Taylor & Francis.
Sundareswaran, S. D., 2011. Essentials of Managing Stress in the Era of Globalization-An
Organizational Perspective. Journal of Contemporary Research in Management. 6(3).
p.67.
Tyson, S., 2014. Essentials of human resource management. Routledge.
Online
Using the Marketing Mix to Strengthen your Marketing Strategy. 2016.[Online]. Available
through: <http://www.dreamalatte.com/coffee-shop-business-plan-marketing-mix/>.
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