Filiz and Smith Coffee Shop Expansion

This assignment analyzes the financial performance of Filiz and Smith coffee shop to assess its readiness for expansion into Bulgaria. It examines profitability ratios like gross profit ratio and net profit ratio, along with liquidity ratios such as current ratio and quick ratio. The analysis concludes that the coffee shop's strong financial position supports expansion into the Bulgarian market.

European Fair-trade
Coffee Shop

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................2
TASK 1............................................................................................................................................2
TASK 2............................................................................................................................................3
TASK 3............................................................................................................................................4
TASK 4............................................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
The value of trade has increases with the unique concept of globalization which enhances
the existing capabilities of an individual. Filiz and Smith coffee shop has been selected for this
report by explaining their current role in the business environment. This report stresses on
business expansion of an entity in one of the developing nation of European union is Bulgaria.
The report describes reason for chose the Bulgaria for expansion. It shows the marketing mix is
how to use in promoting or marketing the products and services. It describes that the coffee shop
should expand business or not on the basis of the ratios such as profitability ratio and liquidity
ratio.
TASK 1
The Filiz and Smith coffee shop is currently operating very well in the beverage market.
It wants to expand the business in a European country by which it can gain more benefits and can
become an international coffee shop. The particular coffee shop should expand the products and
business in Bulgaria country which is a country of Europe continent (Pay, 2009). Bulgaria will
be the best choice to expand the business. It can open a new coffee shop at there or can merge
with existing coffee shop as well. Bulgaria's population consist of mostly urbanized people
because with help of large administration department in that area. In addition to this, including of
more principle will help in proper division of empire and territory. However, country has
involved political construction by adopting of democratic constitution because here, system of
government are in limits of political authority. Therefore, it results in removing of poor
performance of government. Moreover, Bulgaria's is that type of parliament in which unitary
consist of large levels of political, economic and administrative. Bulgaria involves of
differentiated temperature and climate condition by including of some climatic changes features
that are summer, winter, and rainy (Goffee and Scase, 2015). Because of this are factors or
determinants the Bulgaria is the best for expanding the business of Filiz and Smith coffee shop.
In terms of the ethical consideration the Bulgaria is consisting of some particular
intension which include of imperishable letters and some code of ethics in honour to provide
right and reliable information through this, they play crucial role in democracy country. As per
the another ethical code is the country is does not discuss with the tourists and group guides the
limits for subsistence and accommodation of the groups and does not recommend upon his or her
discretion other restaurants, hotels, alternatives routes or competitive tour guide companies. The
ethical code and conduct of the country Bulgaria is better and too much effective so the Filiz and

Smith coffee shop can easily open a coffee shop at there (Talbot, 2015). Relationship of varied
media outlets and professionals they need to be properly defined through involving of mutual
respect and fair competition so that prevention of media consist of proper advertising and
promotional activities related to their product and services which coffee shop is offering.
Logical consideration is relating to or used in or characteristic of logic (Jacob, 2015). It is
a capable of or characterised by clear or valid reasoning. The logic behind expanding the
business at Bulgaria country is the population of that country is urbanized, so the urban people
and youngsters are taking more interest in the beverage products. Bulgaria is a tourism
destination site of the world and large number of tourists come for visiting. In addition to this
society and culture of the nation also offers positive conditions for executing desired operations
of business in successful manner. People of this country or nation give preferences for living a
high standard lifestyle and due to that it is a great opportunity for opening a coffee shop in the
Bulgaria (Alon and Lattemann, 2016). They are like to go outside with friends or family for the
party and outing than it will increase the sales and revenue of the coffee shop. Hence, this all are
the factors of logical considerations, management structure, ethical consideration etc. are helpful
and make the business in successful manner, because of this the coffee shop should expand the
business in the Bulgaria nation.
TASK 2
Marketing mix consist of various actions and tactics for promoting their brand in
competitive market easily. Therefore, through this, they can earn maximum profits and represent
in market by increasing goodwill of firm. The Filiz and Smith cafeteria is newly opened which
results in creation of perfect marketing mix to analysis town by using of 4P's. Moreover,
marketing mix help in developing of plan for selling out goods and services which they are
producing for customers. Cafeteria consist of 4 P's that are product, price, place and promotion.
Thus, for reaching out to target market during implementing of these 4 elements they need to
understand well in advance.
 Product: The coffee shop need to understand which product they are offering to their
customer by satisfying their needs. Moreover, they also need to analysis that this target
market is demanding that type of product or not. Cafeteria product prices need to be set
on basis of customer because this add value to product before selling to consumer
through a voluntary marketing exchange. Product involves of name, brand, packaging,
size and presentation. Moreover, service industry involves of intangible item therefore,

here packaging and size does not matter (Adams, 2015). Therefore, these cannot store
and transport because they are perishable in nature.
 Place: Place is very crucial in marketing mix situation because this involve of targeting
market for selling of goods and service which they are producing for customers.
Moreover, from this, distribution of product will be easily and effective because they
have segmented their while market into small groups which will rise in sale of their
product. However, place refers to location and area in which they are targeting and
making available for customer. Therefore, manager of organization need to select proper
area before providing of goods to their consumers because through them only they will
earn profits (Barbero and Fiore, 2015). Coffee shop need to chose area near office,
college and tuition that receives lot of incoming of customers, by which consumption of
coffee will increase.
 Promotion: The Filiz and Smith cafeteria need to decide promotion by involving of
various communication channels for customers because they need to inform to those
people who has been targeted for coffee. However, it allows marketing managers for
communicating about their product well by involving of various tools such as T.V.,
social media, templates, radio and newspaper (Gunsberg, 2015). Moreover, through this,
they can reach out to their ultimate goals easily because promotion of cafeteria includes
of youngsters people for rise in sale.
 Price: A price is one of the most important element of the marketing mix, which
generates a turnover for the coffee shop. The coffee shop should make the pricing
strategy which the all level consumers can afford and can consume the products and
services. The Filiz and Smith coffee shop should make the affordable pricing.
TASK 3
Geographical help in understanding of making sign and symbol because through this,
they can sell their product effectively (Schapira, Schapira and Schapira, 2016). It can be consist
of various situation which help in collecting of raw material for their finished goods for
consumers. Moreover, it consist of importing of varied raw material from differentiated territory
and region. The geographic area is implement to the business in the Bulgaria. It may have impact
on some factors, the factors which impact to the business are as follows:

Management Structure: Management structure for organization consist of authority and
top level manager because they help in making some decision for establishment of their product.
Through determining of various communication channels and factors which affect in external
and internal environment forces for their product and service. Therefore, from this, they can
identify individual for specific role within business activities. The Filiz and Smith company is
affected because different countries have different management structure in their business. The
coffee shop should adopt that structure.
Personnel and managing staff issues: Personal management can be defined as obtaining,
using and maintaining a satisfied workforce. The coffee shop is going to expand its business in
the Bulgaria, so the personnel of that country are different. The company should hire the
personnel and management team from that particular country (Deiters, 2015). If the personnel of
coffee shop's are of home country in the Bulgarian business than it will create issues regarding
the culture, expressions and language specially. The company must should hire the personnel
from the host country that is Bulgaria.
TASK 4
Calculation of Profitability ratio and Liquidity ratio:
Profitability Ratio Formula Amount
Gross profit 2,08,000
Net profit 26800
Net Sales 3,60,000
Gross profit ratio GP/ net sales * 100 57.78%
Net profit ratio Net profit / net sales * 100 7.44%
Liquidity Ratio
Current assets 35400
Current liabilities 6200
Inventory 8000

Prepaid expenses 0
Current ratio Current assets / current liabilities 5.71
Quick ratio
Current assets – (stock + prepaid expenses) /
current liabilities
4.42
Profitability Ratio: Profitability ratios are those ratio which help business to rise in
ability by generating earning and reduce in expenses which are incur at time of promotion and
establishment of business (Novak, 2016). Moreover, ratios involves of comparison of income
statement and those categories which display organization ability for generating of profits from
there operations. Two quantitative relation includes in profitability ratio such as:
Gross profit of the company is 57.78% which shows that the company is performing well
in the market and have a less cost of goods, so the company is able to expand the business.
Net profit is balance of all revenue and expenditure which business occurred at time of
establishment such as taxes, depreciation and interest. Here the net profit is 7.44%, which shows
that the coffee shop is having a good profit and it should expand the business in Bulgaria.
Liquidity Ratio: This ratios refers at time of measuring of liquid assets and liabilities
from bank and other financial institution for generating of profits for company. In these ratios
there are current and quick ratios are considers such as:
Current ration of the Filiz and Smith coffee shop is 5.71:1, which shows that the shop is
performing highly well in market. Company have too many assets. So it should take decision to
expand.
Quick ratio is 4.42 in this case which shows the coffee shop has GBP 4.42 of liquid assets
available to cover each GBP 1 of current liabilities, so it good for company.
CONCLUSION
From the above report it can be articulated that the Filiz and Smith coffee shop should
expand the business in the Bulgaria country which is a developing country of the world as well
as European continent. It concluded that the country chosen on the basis of the climate and
weather, political situations and geographical area and the company using 4Ps of marketing mix

to expand products and services. The expansion decision is taken on the basis of ratio, so all the
ratios are better of the shop. Hence, the company should expand its business in the Bulgaria.