RESIT Business Essentials Advanced Case Study

This case study analyzes the international expansion of Marvin and Smith's coffee shop, focusing on the viability of expanding into France. It examines market analysis, marketing mix, organizational culture, financial profitability, and liquidity to assess the company's potential for success in the international market.

RESIT Business
Essentials Advanced –
Case Study
Assignment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
1. Identify a county for expansion of business and justify choice..............................................3
2. Present a tailored marketing mix in relation to the coffee shop expansion plan abroad.........4
3. What are the implications of the need for company to cover a wider geographical area in
terms of a different country.........................................................................................................6
4. Use financial information, evaluate how their profitability and liquidity may impact on
decisions available to them.........................................................................................................8
5. Overall summary regarding viability in international expansion............................................9
CONCLUSION..............................................................................................................................10
REFRENCES.................................................................................................................................11
.......................................................................................................................................................11

INTRODUCTION
Launching a business refers to a process by which an individual establish or start
there business. For opening a new venture a person required to do various things like
evaluation and analysis of market (Au and et. al., 2013). Along with this they required to
prepare budget according to resources and equipments which are requirements for
launching and running a business. Organisation which is selected for this assignment is
Marvin and Smith’s coffee shop which is opened in January 2016 at Wandsworth, South
London. Founder of respective shop are Hank Marvin and Patty Smith who worked
together for many years and then decide to launch there coffee shop. They offer quality
and herbal products and they use finest coffee beans. Along with this they decide to
offer themed evening such as board game night, chat with Nanna for taking advice and
many more. Topics covered in this report are country of European Union in which
respective company can expand and marketing mix related to this. Factors which
impact respective company while expanding there business and evaluation of company
profitability and liquidity which influence decision making.
TASK
1. Identify a county for expansion of business and justify choice
According to given case, there are two person Hank Marvin and Patty Smith who
are working at a food and catering industry form long time. Now they are planning to
launch their own business in some other country. Where they can get maximum profit
and customers bases. Thus, both important peoples of respective company do market
analysis and evaluation in order to develop appropriate and effective strategies. They
spend almost 12 months for conducting research and market analysis for their coffee
shop (Vogel, 2018). Before launching business they determine various factors such as
total capital, resources required, target market and audiences, suppliers, competitors
and many more.
After conducting research of different different countries and buying behaviour of
customers of those countries Hank Marvin and Patty Smith decide to expand their
business in France. Mostly peoples or travellers visit this country to travel and visit
various attractive places and monument. This is consider as opportunities for respective

company to expand in this location in order to enhance there profit and customers
bases. Peoples of France also attracted and like bakes and herbal foods as well as
coffee with finest coffee beans. After deciding area Marvin and Smith’s coffee shop
decide various other things such as budget, target audiences, location and many more.
So it is responsibilities of owners of respective company to select appropriate
location which help them in enhancing there selling of products. Such as they can use
area near college, tourist visiting place and many more. Along with this they also
consider that location where supply of goods are easy. It is essential for respective
coffee shop to plan and decide appropriate location, decision, policies which help in
enhancing business in effective and appropriate manner (Gupta, Goktan and Gunay,
2014). For this company also decide various activities to enhance there customers
bases such as they are using herbal and fresh products, they made coffee with finest
coffee beans.
Along with this they are also plan to provide theme evening such as board game
night and chat with Nanna for any advice or suggestion. Manager of respective
company train and develop there employees so that they operate as well conduct there
business in effective manner. Hank Marvin and Patty Smith develop as well as decide
products and services according to need and demand of customers of France market.
By expanding business operations and function at France market company able to
enlarge there customer base, understand new market, increase profitability, market
share and many more.
2. Present a tailored marketing mix in relation to the coffee shop expansion plan abroad
While expanding a business in new market, a company has to conduct marketing
mix which help them in launching and running business in effective and appropriate
manner. In context of Marvin and Smith’s coffee shop when they are expanding
business in abroad market that is German they conduct Marketing mix (Heald, 2018).
Which help them in expanding business in effective manner, along with this they also
able to target appropriate customers for there coffee shop. Explanation of marketing mix
in context of Marvin and Smith’s coffee shop is explained below:-
Marketing Mix:-

It refers to the process which is adopted by a company in order to attract
customers and promote there company brand as well as products at a marketplace. By
which they able to attract more customers base which leads to enhancement in
profitability in proper manner (Pinto and Garvey, 2016). It include 4 P's that are Product,
price, place and promotion. Process of Marketing mix is essential for a company
because it is easy to adopt and adoptable in every situation. Expatiation of different
factors of marketing mix in context of Marvin and Smith’s coffee shop is given below:-
Product: It refers to the item which a company going to sold to there customers.
Company develop products according to customers needs and demand so they attract
them in effective manner. This will help them in enhancing profit and customers bases
in proper manner. In context of Marvin and Smith’s coffee shop for expanding business
in German they do market analysis and evaluation which help them in knowing demand
and need of customers. Accordingly they are offering products which are herbal and of
good quality. Along with this they are providing theme evening such as game night, chat
for advice and many more.
Price: It refers to value which a company decide for their product which they are
offering to customers. The price of a product is depend upon cost of production, target
customers, ability of market which they pay for particular products (Boyd and et. al.,
2015). There are various type of marketing pricing strategy which a company can use.
Such as in respect of Marvin and Smith’s coffee shop they are adopting premium
Illustration 1: Marketing Mix
(Source: Marketing Mix, 2019)

pricing method for giving value to there offering products which they will serve at France
market. It is responsibilities of respective company manager to decide appropriate price
for product which is not too high and not low.
Place: It refers to place which a company decide to sell there products
and services. While deciding place management of a company must consider some
major things like it must be under budget of company. Area must be known and easy to
achieve by customers. Along with this it must be easy and profitable for a company to
run there business in effective and appropriate manner. In respect of Marvin and
Smith’s coffee shop they must decide appropriate place at France which can be easy to
achieve by customers. They also decide place from which they easily reach to
suppliers, retailers and wholesalers.
Promotion: It refers to strategy and methods which is adopted by a company in
order to promote and advertise there products in effective and appropriate manner. A
company can adopt various promotional activities such as print media, social media,
words of mouth and many more to attract customers (Garg and Garg, 2013). In respect
of Marvin and Smith’s coffee shop they are running a coffee cafe which is more likely by
young and business peoples. So attract them respective company can use promotional
techniques like advertise on social media, print media and e-mail marketing and many
more.
3. What are the implications of the need for company to cover a wider geographical
area in terms of a different country
When a company decide to expand there business at different geographical area
of different countries they go through various process. During which they go through
various issues and changes that influence business of a particular country. When
Marvin and Smith’s coffee shop decide to launch there business at France they go
through changes in various factors (Halinen, 2012). Such as information system, supply
chain, organization culture, management structure, change in competition, staffs and
many more. Major two factors which affect business decision making of Marvin and
Smith’s coffee shop are explained below:-
Organisation culture:

Organization culture is refers to beliefs, values, assumptions, ways of interaction,
objective and many more which a company follow in order to operate there business
operations and functions in effective and appropriate manner. While developing
organization culture, a company must consider several factors such as size of a
company, technology they are using currently and for expansion, working style,
ownership, objectives and many others (Freeman, 2012). It is necessary for a company
to analysis and evaluate market when they plan to expand business in another country
or location. This will help them in developing strategies, plans and rules according to
requirements of location.
While expanding business Marvin and Smith’s coffee shop do market evaluation
and analysis by which they get aware and understand about culture of France. This will
help them in expanding business in effective manner and also they able to develop
strategies, plans, policies and regulation accordingly. If respective company not
evaluate culture in proper manner they not able to run their company in effective
manner. This is so because company not able to develop strategies appropriately which
leads to conflict situation. Understanding organisation culture help a company in
creating share values and effectiveness in proper manner. By this managers of
respective company can do allocation of resources and duties in effective and efficient
manner. Organization culture develop by Marvin and Smith’s coffee shop are effective
because it is based and consider both employees and customers.
Personnel and managing staff issues:
This factors refers to the issues which is face by personnel and managing staff in
an organisation. If an employees face issues or problems it will directly and indirectly
affect there performance which leads to reduction in organization productivity as well as
profitability. So it is responsibility of a management of an organisation to do analysis of
there organisation culture on regular basis and ensure that employees not face any
problems and issues.
In respect of Marvin and Smith’s coffee shop they must do regular analysis of
market as well as organisation. That help them in developing plans strategies and
policies according to situations and conductions (Schilling and et. al., 2012). They
develop plans or organization by collaborating both location culture so that every

employees feel connected and motivated. They also provide training and develop to
employees when they get new things or task which help that employees in conducting
task in proper and appropriate manner. It is also responsibility of respective company
manager that they communicate to there staffs in effective manner so that there
employees feel free in communicating there issues and problems in effective manner
(Schilling and et. al., 2012). This will help them in developing strategies, policies rules
and regulation according to the issues which staffs are facing. Along with this
employees also feel motivated and connected towards the company which leads to their
productivity and profitability.
4. Use financial information, evaluate how their profitability and liquidity may impact on
decisions available to them
As per the given case study, it can be seen that Marvin and Smith are going to
launch there own coffee cafe with the name of Marvin and Smith’s coffee shop in
German market. Before launching business company do analysis of market and there
budget in order to know there financial status. Along with this company also able to
know there overall performance at marketplace of United Kingdom. At starting
company's financial position is determine as financial statements of Marvin and Smith. It
would be consider more appropriate outcome in order to generate more proper net profit
of 26800 with a time period. In December 2016 respective company develop profit and
loss statuette whose result is more crucial. Marvin and Smith coffee shop has to sell
products and other items of costing 360000 to get appropriate profit at a market place.
In this procedure respective company able to generate more expenses for generating
that particular number of products ans other goods.
Profitability ratio: It refers to financial statement which is use to analysis and
evaluate ability of a business to generate profit or earning by its revenue, operational
cost, balance sheet assets and many more (Battilana and Lee, 2014). By this company
can know there financial status at a marketplace in appropriate and effective manner.
Profitability ratio of a company increase or decrease according to time and conduction
of market as well as company.
Gross Profit = 208,000
Net Profit = 26,800

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%
By analysing profit and loss statement of Marvin and Smith coffee shop,
company able to determine gross profit and net profit. By which they able to determine
their financial status (Au and et. al., 2013). After respective company fulfil all expenses
then they will reach to a effective and appropriate position which is suitable as a amount
of profit.
Liquidity ratio:
Current ratio Current assets / Current liabilities 35400/6200= 5.7
Liquid ratio Liquid assets / Current liabilities 35400-8000/6200=4.4
From the above given ratio of Marvin and Smith coffee shop it can be analysis
that liquidity position of company is effective. By which they can enhance there business
and offering at marketplace.
5. Overall summary regarding viability in international expansion
According to this report there are two peoples Hank Marvin and Patty Smith who
are working together at a food and catering industry. Now they are planning to launch or
open there coffee shop with name of Marvin and Smith coffee shop. For which these
two peoples are developing business plan to identify appropriate country for expansion.
For this they conduct analysis and evaluation of various countries countries and
customers behaviour (Vogel, 2018). After analysing respective company decide to
launch there business at market of France. Then accordingly they make plans and
strategies to launch and run business in effective manner at respective country market.
For this they also conduct analysis and evaluation of financial statement. Before
expanding business in another country company analysis market situation. Company

also develop strategies to maintain effective organisation culture, along with this
company also train and develop there employees so that they conduct task in effective
manner.
CONCLUSION
From the above discussed point it can be conclude and analysis that for
expanding business company has to do various activities such as market evaluation,
study of consumers behaviour and many more. By this company able to develop
strategies and plans in effective manner in order to conduct business operations in
appropriate manner. While expanding business company can also conduct evaluation
by using marketing mix. By this they able to identify there target customers and market
in proper and effective manner. For expanding business in effective manner company
also do analysis of financial statements and then develop budget accordingly.

REFRENCES
Books and journals
Au, K. and et. al., 2013. Incubating the next generation to venture: The case of a family
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Vogel, S.K., 2018. Freer markets, more rules: Regulatory reform in advanced industrial
countries. Cornell University Press.
Gupta, V.K., Goktan, A.B. and Gunay, G., 2014. Gender differences in evaluation of
new business opportunity: A stereotype threat perspective. Journal of Business
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Heald, M., 2018. The social responsibilities of business: Company and community,
1900-1960. Routledge.
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Garg, P. and Garg, A., 2013. An empirical study on critical failure factors for enterprise
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Halinen, A., 2012. Relationship marketing in professional services: a study of agency-
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Freeman, M., 2012. To adopt or not to adopt innovation: A case study of team-based
learning. The international journal of Management Education. 10(3). pp.155-168.
Schilling, A. and et. al., 2012. Understanding professionals' reactions to strategic
change: the role of threatened professional identities. The Service Industries
Journal. 32(8). pp.1229-1245.
Schilling, A. and et. al., 2012. Understanding professionals' reactions to strategic
change: the role of threatened professional identities. The Service Industries
Journal. 32(8). pp.1229-1245.
Battilana, J. and Lee, M., 2014. Advancing research on hybrid organizing–Insights from
the study of social enterprises. The Academy of Management Annals. 8(1).
pp.397-441.
Online
Marketing Mix. 2019. [Online]. Available
through<https://www.123rf.com/photo_30166165_stock-vector-vector-4p-
marketing-mix-model-price-product-promotion-and-place.html>