Interpretation of Financial Statement

Business Essential
Advance

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1. Market Research on European Nation....................................................................................1
2. Marketing mix.........................................................................................................................2
3. Implication that are faced by Hank and Smith's coffee shop..................................................4
4. Interpretation of financial statement.......................................................................................5
5. Summary.................................................................................................................................7
CONCLUSION................................................................................................................................7
REFRENCES...................................................................................................................................9

INTRODUCTION
Business is an activity which emphasis on regular and continuous distribution and
production of goods and services for satisfying customers needs and wants. In other words, it
refers to sum total of all operations that are related to purchase products and services with the
goal to earn profits(Tyson, 2014). Hank and Smith are the business partners of food and catering
company and want to expand their business in other country. This report describes about the
factors that company must taken into consideration before expanding their business in France.
Along with this, it also discuss about interpretation of financial accounts and marketing mix.
TASK 1
1. Market Research on European Nation
As per the given case study, Hank and Smith are running business together of food and
catering sector from many years. After getting good experience in this sector, both want to open
their own coffee shop in south London. Regarding the coffee shop Hank and Smith spend 1 year
in research and planning. Choosing best location, figure out initial capital requirement, key
competitors, identify target market are included in their research.
After establishing their in London successfully, Hank and Smith want to expand their
business in European countries to generate high profit and increase the market share of company.
Both decided to open up their own coffee shop in France. As more number of people drink
coffee on regular basis which is beneficial for the firm(Sundareswaran, 2011). In France large
number of tourist are visiting that helps in increasing the market share of company as there are
various attractive tourist spots in country. After Germany and Italy, France is the third largest
coffee consumption country in Europe. According to the study in 2015, per capita coffee
consumption of France people is close to European average of 5.41 kg per year(Coffee in
France. 2018). There is great potential for growth and expansion of in coffee in this country as
there has less legal activities, company have to follow the European union legal requirements
that are applicable to coffee.
Facts based on culture, lifestyle and coffee drinkers of France
France people are big consumers of coffee as they do not get affected by the economic
condition of the country. People of country are ready to pay higher cost for getting good quality
of coffee. More than 50% of France people are willing spend money on coffee and 25 % of
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population which are aged between 18 to 35 years consider coffee machines at their home as a
status symbol marker. More than 23% France people consumes coffee in their daily routine and
27 % population are the social consumers which means drinking coffee is the moment of
relaxation with the friends, family and colleagues. The comparison of coffee lifestyle in France's
popular cities gives interesting trends(Coffee in France. 2018).
For instance, people of Paris seeks to try and taste different type of flavours in coffee. In
Strasbourg, people prefer to drink coffee in morning and consumers of Lyon drinks coffee in
afternoon.
According to the ethical consideration, Hank and Smith have to adopt fair trade coffee
standard that states coffee beans which are produced as per the fair trade standard. They must
also primarily taken into consideration to ensure staff welfare. Company should arrange training
and development program for employees of the firm and also provide high standard orientation
program to them.
There are various factors that must be taken into account before setting up own coffee
shop in France. Hank and Patty have to check convenient transport facility available for people
to reach at coffee shop(Hair, 2015). It is important reason for selecting shop location at the area
where company can seize the attention of customers and attracts more number of people.
Offering quality drinks and customer loyalty is the main aim of the company and in order to
achieve there goals, company must maintain it effectively by providing theme evening concept
which is recently in trend and it attracts the coffee drinkers. Hank and Smith get finest beans
from gutumindo coffee, it is the supplier in Uganda that focuses on encouraging farmers of
country to run their own farms and earn independent profits. So it is beneficial for company to
get coffee beans from them as it is affordable for the firm.
2. Marketing mix
This refers to the tactics and set of actions which firm uses to promote there brand,
products & services in the marketplace. Marketing mix is consist of 4P's that are price, product,
promotion and place these are as follows:
 Product: It is commodity which is produced to satisfy the needs and wants of the
consumers. It may be tangible and intangible in nature as it can be in the form of goods
and services. In this case, Hank and Smith want to establish their own coffee shop in
France. The reason of selecting France is there are large number of people drinks coffee
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