Hank and Patty's Coffee Shop: Expanding to Netherlands - Business Essentials Advanced

This assignment analyzes the viability of Hank and Patty's coffee shop expanding to Netherlands. It explores the justification for choosing Netherlands, the marketing mix strategy, the implications of geographical expansion, and the impact of profitability and liquidity on decision-making. The analysis concludes with an assessment of the overall viability of overseas expansion at this stage.

Business Essentials Advanced
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Table of Contents
Introduction........................................................................................................................3
Q1. Justification of chosen country....................................................................................4
Q2. Marketing Mix..............................................................................................................6
Q3. What are the implications of the need for Hank and Patty to cover a wider
geographical area in terms of a different country?............................................................9
Q4. The following financial information, evaluate how their profitability and liquidity may
impact on decisions available to them.............................................................................11
Q5. Write a concluding summary about the overall viability of overseas expansion at this
stage................................................................................................................................13
Reference List..................................................................................................................14
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Introduction
In this assignment, a detailed discussion has been done on the business essential for
Hank and Patty’s new opening coffee shop in Netherlands. Huge demands of coffee
among customers are there in the states of E.U. To open a new coffee shop, a huge
investment is the first requirement. People go to these cafeterias just to relax and enjoy
good coffee. High profitability in future is a definite surety as huge demand in always
there. Therefore, the shop authority always tries to provide the best facilities for the
customers by providing good ambiance as well. In this assignment, why Netherland has
been chosen for the new setup, its scope, marketing mix policies, and financial
processes, implementation of geographical area in terms of need, profitability, and
liquidity will be discussed.
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Q1. Justification of chosen country
Hank and Patty’s coffee shops are present in south London. They have successfully
opened the shops within a year. The reasons behind their success are the quality of
coffee beans, fulfilling customers’ needs like giving them facilities like charging their
phone or laptops, wifi facilities, offering them east African snacks, fresh mango juice,
herbal tea, herbal infusions, cold drinks and many more products, using staffs in a
mannered way, wage development facilities for staffs, live chat and so on. Now after the
success, they are planning to open a new coffee shop in Netherland to develop and
expand their business in E.U.
Hank and Patty has chosen Netherlands for this new opening. Many reasons are there
to choose this country. First and foremost reason is the consumption of coffee in
Netherlands. This country comes within the top twenty countries with a consumption of
8.4 kg per capita per year (Scarlat and Dallemand, 2018). Dutch are the world second
biggest coffee drinkers (Gunter et al., 2017). The Dutch government also works actively
in this process. With the growing demand of coffee, government is in favor of expanding
this business. With a diverse culture and foreign influence, Dutch are welcoming,
overwhelmed people. Over a 17 million of living population, it is the 66th populated
country in the world and millions are coffee drinkers (Grosso et al., 2016).
The transport and communication system of this country is also a great working factor.
With a long term panning and with the help of many technologies, it is developing with a
great speed. Around 74 percent of people with the age group of 55, 50 percent people
from the age group of 18 to 34 and almost 35 percent of people are from the age group
of people who tend to drink coffee a lot (Frankfort-Nachmias and Leon-Guerrero, 2017).
In Netherlands, nowadays small-scale initiatives in trade and development od
cooperation is the main thing by which social and economic condition is more
developing. The growing rate of turnover is helping in the economy as well
(Westenbrink et al., 2017). Staff welfare is another issue that is in the favor of
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establishing coffee shop. With a good wages and developing condition, this will help this
business to develop.
Netherlands, a country in Europe With a good location, the establishment of Hank and
Patty’s coffee shop in Netherlands, will succeed because people has a tendency to
come and visit these coffee shops with a good and likely sprit. In this country, the
communication level is good, that is why this may help in the establishment of the shop.
Netherlands is a country where a number of tourists come every year to visit, therefore,
the acceptance level of people can help in development of the coffee shop. Before
establishment, tax issues, legal interactions, legal policies will also needed a check. If
the company can make this business a taxable one, it will be a beneficiary step for the
company. However all the reasons are working in favour of Hank and Patty’s to choose
Netherlands as their option to expand their business.
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Q2. Marketing Mix
Hank and Patty’s coffee shops are very famous in London. Now to expand the business
in E.U, the company has chosen Netherlands as a new venue. To develop the business
there, marketing mix for Hank and Patty’s coffee shop includes four factors are-product,
price, promotion and place. Marketing mix of the company is discussed below:
Marketing mix Examples
Product Hank and Patty’s is a famous brand in
European states (Katz-Rosene and
Paterson, 2018). In London, they have
many shops. Key element of their
marketing mix is coffee. Various types’
coffee such as cafe latte, cappuccino, long
black (Americano), Ristretto, Espresso,
double espresso are offered by this
company. With so many various types of
good and quality coffee, this organization
also provides customers a good ambiance
and superb customer services as well.
Except coffee, fresh snacks, herbal tea,
diffusions are also there to offer
customers.
As Hank and Patty’s trying to establish a
new coffee shop is Netherlands, therefore
the organization will try to focus in serving
its best product to the customer and
providing them best coffees within a good
ambiance.
Price Hank and Patty’s coffee shop provides so
many types of coffees with sufficient
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prices. Here, Different group of people
comes here to visit, have a cup of
delicious coffee and spent some time.
Therefore, the organization has different
prices for different coffees. Here the prices
are divided according to the small and
large sizes. According to requirements,
people can choose and order what they
want.
As it is a new venture for Hank and Patty’s
organization, therefore for the initial
stages, company will provide a low
scheme policy with some attracting offers.
Some combo offers, which may include
any food products, will also be there to
gain customers. Economy pricing policy
is the policy companies will chose. For
gaining customers, company may try to
give some products with some discounts.
Promotion The best way to promote is via the coming
customers. This organization always tries
to do promote via some exciting offers and
some quality food and drinks such as cold
coffee, or cold shake.
In Netherlands as well, Hank and Patty’s
will eye to promote themselves by keep on
serving good quality coffees, food and a
great ambiance. Word of mouth promotion
and promotion via online method such as
social media, mailing, advertisements, and
pamphlets are the best way to promote.
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Place Hank and Patty’s has developed coffee
shops in Wands worth, London. London is
always a great place for tourists and many
coffee shops, restaurants are there. With
the great ambiance, good customer
service Hank and Patty’s has gained a lot
of popularity in London.
As a new venture to be start in
Netherlands, the company will try to
choose a great place to attract as many as
can. Therefore, Hank and Patty’s will
choose a crowded place to set up the
coffee shop. As Netherlands, is very
famous for coffee and millions of coffee
drinkers are there, it will be an easy task
for Hank and Patty’s coffee shop to gain a
good number of customers. The company
as location will choose city areas.
Table 1: marketing mix
(Source: Created by the learner)
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Q3. What are the implications of the need for Hank and Patty to cover a wider
geographical area in terms of a different country?
Implementation need for Hank and Patty’s coffee shop:
Hank and Patty’s coffee shop are very famous in South London. Many shops are there
but now to increase and expand the business in E.U, the company has chosen
Netherlands as a new location. To gain and expand the business in a wider
geographical area, the need of implementation has to be there.
Information system:
Being a new place the company will try to expand the business in Netherlands while
using their information system. In any organization, information system is must. With the
help of proper technology and information system, it will be helpful for any company to
track the records on a daily basis. To maintain the records of all the employees, to gain
a high margin of profit, to gain customers are the main need to have a proper
information system (Kerzner and Kerzner, 2017). In a new place to expand the business
in a well mannered way, the importance of information system becomes more evident.
Completely new group of customers to target, the organization will try provide some
more features with a developed information system. In every outlet, a new management
team will be needed. The company will try to track the delivery orders, online orders,
and online payments and try to promote their products as well. The delivery options also
can be arranged in a planned way. Few facilities are needed to be there for customers
like, facilities of paying via cards while visiting outlets, dealing with the customers who
pay online and many more. Some more software, improvements in IT department all
can be managed with the help of a great information system.
Management structure:
Hank and Patty’s coffee shop wants to expand business while establishing new shops
in Netherlands. In this entire process, the need of a good management system is a
crucial point. In London, the organization becomes well known but in Netherlands, while
establishing new outlets, Hank and Patty’s coffee shop has to maintain a good
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management system. In every outlet, to manage the entire system, to look after all the
minute details a good number of staffs are needed to be recruited by the management
(Kerzner and Kerzner., 2017). After recruit, the employees needed to manage in a
planned way. The atmosphere within the shops, servicing to the customers, managing
accounts every work need a close monitoring by the management system. If any
organization has a good a good internal management structure, the business will also
be greatly benefitted. Another important thing is the communication between the
organization and the organization. A good management structure always closely looks
into in these issues to avoid any conflict of interests. With the help of a good
management structure, any organization can develop without facing much internal
issues.
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Q4. The following financial information, evaluate how their profitability and
liquidity may impact on decisions available to them
In any business organization, identifying the profitability and liquidity is very important.
With the help of these two factors, effectiveness and efficiency as well as the economic
condition of that particular organization can be elaborated. Profitability and liquidity
shows any company’s position in current market (Storey et.al,2017).
Gross profit and net profit are two main factors of profitability. By looking at the Marvin
and smiths coffee shop, it can be said that the profitability and liquidity will help in
identifying company’s current state in market.
From the data, it is visible that, the company generated £36000 in 2016, gross profit
was £208000 and net profit was £26800 in 2016. Recent asset of company was £35400
of which 8000 was in inventory and entire responsibility of organization is £6200. The
organizations liquidity and profitability can be calculated as discussed below:
Profitability ratios:
Gross ratio of profit = (Gross profit / sales) * 100
= (208000 / 360000) * 100
= 57.78
Net ratio of profit = (Net profit / sales) * 100
= (26800 / 360000) * 100
= 7.44
The above figures shows that the gross profit index is very high and companies direct
costs are low. Gross return was above 30 %, whereas net profit ratio is 7.44%, which is
well below operating standard of 20%. To avoid this management should cut company’s
indirect cost.
Liquidity ratios:
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Current ratio = (Current assets / Current liabilities)
= (35400 / 6200)
= 5.71
Quick ratio = (Current assets – inventories) / (Current liabilities – Bank overdraft)
= (35400 – 8000) / (6200 – 0)
= 27400 / 6200
= 4.42
Liquidity ratios are high and excess liquidity is not good for company’s future. Therefore,
the company should maintain a good rate of liquidity to maintain sustainability in a
proper manner.
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Q5. Write a concluding summary about the overall viability of overseas expansion
at this stage
Lastly, it can be said that the company Hank and Patty’s coffee shop has many places
to work and develop as well. By providing good and quality food, this cafe can improve
and gain its places in Netherlands. With a new ambiance, new place, new offers, good
relationship with customers slowly but steadily this café can establish their branches in
Netherlands. To achieve the objectives and in order to be a big brand, company can
expand the business in new place with a better marketing strategy and good customer
relationship.
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Reference List
Frankfort-Nachmias, C. and Leon-Guerrero, A., 2017. Social statistics for a diverse
society. Sage Publications.
Grosso, G., Micek, A., Godos, J., Sciacca, S., Pajak, A., Martínez-González, M.A.,
Giovannucci, E.L. and Galvano, F., 2016. Coffee consumption and risk of all-cause,
cardiovascular, and cancer mortality in smokers and non-smokers: A dose-response
meta-analysis.
Gunter, M.J., Murphy, N., Cross, A.J., Dossus, L., Dartois, L., Fagherazzi, G., Kaaks,
R., Kühn, T., Boeing, H., Aleksandrova, K. and Tjønneland, A., 2017. Coffee drinking
and mortality in ten European countries-the EPIC Study.
Katz-Rosene, R. and Paterson, M., 2018. Thinking Ecologically about the Global
Political Economy. Routledge.
Keasey, K., Watson, R. and Wynarczyk, P., 2016. The performance of small firms:
profits, jobs and failures. Routledge.
Kerzner, H. and Kerzner, H.R., 2017. Project management: a systems approach to
planning, scheduling, and controlling. John Wiley & Sons.
Kerzner, H. and Kerzner, H.R., 2017. Project management: a systems approach to
planning, scheduling, and controlling. John Wiley & Sons.
Scarlat, N., Fahl, F. and Dallemand, J.F., 2018. Status and Opportunities for Energy
Recovery from Municipal Solid Waste in Europe. Waste and Biomass Valorization, pp.1-
20.
Westenbrink, G., Beers, G., Joosten, F., Dijkxhoorn, Y., van den Broek, J., van der Lee,
J. and de Groot, N., 2017. Agricultural sector development: guidelines for Aid & Trade
Support in Dutch PSD-partner countries. Ministry of Agriculture, Nature and Food
Quality of the Netherlands..
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