Hank & Patty's Coffee Shop: Business Expansion Strategy and Analysis

This report analyzes the business expansion plans of Hank and Patty's coffee shop, focusing on their strategy to open a new location in France. The report begins with a survey of the EU market, highlighting France's attractiveness for tourism and business opportunities. It then delves into the application of the marketing mix (7Ps) to attract customers and gain a competitive edge. The report evaluates the impact of cultural factors, competitive advantages, and profit analysis on decision-making. It includes profitability ratios to assess financial performance and provides recommendations for sustainable growth, emphasizing the importance of customer satisfaction, ethical practices, and adaptation to local market conditions. The report is a comprehensive overview of the challenges and opportunities associated with expanding a coffee shop business in a new market.

Business

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK ..............................................................................................................................................1
1: Survey in respect to business growth and expansion in EU ..................................................1
2. Use of Marketing Mix.............................................................................................................2
3. Impact evaluation....................................................................................................................3
4. Impact of profit analysis in decision making..........................................................................4
5. Analyse of viability from expansion.......................................................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Business is an organisation where product and services are exchanged for one another or
in terms of money. Every business needs some kind of investment and sufficient customers to
whom its output can be sold on a regular basis in order to gain maximum profit (Ellguth, Kohaut
and Möller, 2014). The production function can be carried out in such a way that needs and
demands of customer can be fulfilled. In the market there is always a huge chance of uncertainty
exists. In this project report the same will be explained in the context to hank and patty as they
want to expand their business in other parts of the country. Regarding their business research
valuable decision and suggestion will be provided underneath.
TASK
1: Survey in respect to business growth and expansion in EU
In the mention case study, about two partners Smith and Marvin who are searching for a
location that will suppose to be right option for them in order to expand their business. France is
the best available option for them. It so because, France is known for its attractive places and
huge hub for tourists. This will be selected for the opening of new coffee shop. It will help to
attract maximum number of people by their effective quality facilities. If every aspects of coffee
material or quality are good then chances of getting more customers will be huge. At the same
time profitability can also be increase if customers are willing to visit the coffee shop.
Marvin and Smith need to select that place which is having maximum number of tourists
where facilities will be already formulate and there is no any extra efforts can be required. There
are various ethical needs which are to be implemented so that earlier success can be attain. To
continue their business operation for very longer period of time they need to deliver superior
quality of coffee to their customers with beautiful aroma (Gamble and Thompson Jr, 2014). The
primary objective of both partner is to draw maximum number of attention towards there shop.
The other part of there business is rely on training of staffs so that they can face customers in
more effective manner. This help them to manage their business in more effective manner or
goodwill will also be increased. With proper training and hospitality they can face customer in
more efficiently and in ethical ways. Their problems which are faced by people regarding coffee
are resolve with all respect and in ethical ways. It has been found that people are having different
taste and choice so for this they need to deliver services and products according to their interest.
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It will help them gain loyalty and believes towards their business. They are having a sufficient
amount of experiences in this particular field. They are offering themed evening like board game
night and chat with nanna that makes them more different from other shops (Lai and et. al.,
2014). They are having huge ethos of promoting fair trade, equality to respect and value their
believes at the workplaces. This research will help them to increase their efficiency and future
chances of growth opportunities. With the improvisation in their business strategies they are now
wants to increase their new branches of coffee shop. It will be entirely depend upon how they are
implementing new ideas in capturing new market.
They need to follow various legal norms which are used in France in context to opening
of new business. They required to cop up with all of them so that any issues arises in future can
be restricted. The best option of making business more successful is to provide services
according to the demand of customers. In the present situation so many company's are involve in
same sort of business which lead to increase maximum competition. Marvin and smith have to
produce new innovative ideas that can be different from other so that maximum advantages can
be attain. The trend and technology shall be used according to the standard by which future
sustainability would be mate. They need to use that system that help them to complete there
work on time and in effectively.
2. Use of Marketing Mix
In the process of opening new business at other location Hank and patty is search a new
location for establishing their coffee shop. The beginning of coffee shop is started from UK with
having best coffee bean in it. They are using more quality product in making coffee so that large
number of customers can be attracted toward their business (Cross, 2013). All the major aspects
were implemented and by this the strategies has come into force but till the time when the
business was kept expanded in same location at UK there services are got outdated. For this they
wants to implement new marking mix for their business which can make them new in the
market. Under which 7ps of marketing can be used. Those are explained underneath:
Product: It has been seen that Marvin and smith is having business of coffee which they
are prepared from using coffee beans that would increase the quality of coffee before delivering
it to the customers. Other products which are offered by them are Snacks, cold drinks to the
customers that would attract them to visit more and more. It will help them to increase demand
for coffee among people.
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Price: For delivering quality coffee they are charging economical price so that everyone
can easily afford to buy. It will help to draw more customers towards their business and other
aspects can be considered. The cost will be easily determine which is asked by company for their
services. As per the customer requirements price for products can be fixed. By knowing that if
product are provided according to the demand of customers it will directly increase profitability
of there business.
Place: For opening new venture of shop, they need to select that areas or location which
is entirely favour them (Zakrajsek, 2013). That's why they are gone with France. It is chosen
because there are maximum number of customer visited for visiting France beauty in the
meanwhile they can avail coffee also.
Promotion: In order to make an impact on market of France they need to choose best
promotional mode. Such as there are various options available to promote their products.
Advertising their business over TV and other areas of location where it will draw maximum
attention of customers. It will help them to create a bigger image in the market about their
product quality.
Packaging: It is related with that basic feature of the coffees such as its presentation,
logo. All these are making an effective impression to customers from entering through the doors
(Definition of 'Marketing Mix, 2017). It consists of various visual components that would help to
attract maximum number of customers.
Positioning: It is directly based on goodwill of the business. It indicate where coffee
business of Marvin and smith are standing in the market in respect to other competitors. The use
their product by the customers are well enough to retain them for the future. It also consists of
various feature and benefits provided to them as compare to other competitors.
People: Determine about target market and people addressed in our marketing concepts
that are effective for their sustainability (Romano, 2013). They need to analyse need of people
as a team to fulfil customer needs.
3. Impact evaluation
In the mention case of hank patty, they are planning to setup a new business in other parts
of the country for this they evaluated various aspects which is required in that process. There are
various factors which are making critical impact over setting up of new business are need to be
determine in early phase. It will help them to control extra cost and expenses for them. In this
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context, there are various impact that they have to faced in respect to geographical expansion.
The necessary decision is going to be taken after collecting various review and implication
related with budgets, costs and other business operations. Information collected from several
people those are local residents in those areas regarding their choose and demand for coffee.
It will be helpful for them in attain success for there business in coming time. The
situation which is exists in France market is identified as per its internal and external factors that
are related with it. The cultural and social aspect of market are need to be analyse so that future
demands of customers can be fulfilled (Prewitt and Weil, 2014). Some of the impacts which are
born by business in regards to the different problems are explain under below:
Cultural impact of organisation: It is considered as those aspects which are present in
every country. It is related with values and beliefs that an individual or group carries with them.
They can demand product which can meet out its cultural needs and requirements. It is mainly
influence historical, geographical and other factors that can affect assessment of new business
plan. Differences which are arises because of attitude, behaviour and values will affect the
receptivity of a individual. In this manner, organisation will be able to identified the services and
products according to the demand of customers so that they can get best possible outcomes. In
the business planning, there are various factors that will be making huge impact on the business
are faced by Marvin and smith. All those comments are determine in relation to opening of a new
coffee shop. In France, people are following various culture which are categories by the
government. In order to meet their criteria, they have to go through with norms of every people
which will help to stay away from any kind of conflict.
Gaining competitive benefits: In the current scenario, smith and Marvin have to deal
with various competitors those are working as the same business operations. It is seems to be
huge challenge against them. It will affect them to take competitive advantage and to gain future
sustainability. If people will be provided with the superior facilities then others they can create
effective chance to earn maximum profit. With additional creativity in design and presentation of
service delivery more healthy outcomes can be attain. Quality in coffee taste and aroma can also
be considered as best option to retain maximum people towards their brand.
4. Impact of profit analysis in decision making
Any business cannot completed without its financial performance. For making crucial
decision they need to analyse net profit generated from the coffee shop during the year. In the
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mention case study of Marvin and smith, financial performance of their business operation in UK
is more effective. It can be observed that profitability position of company is positive with the
Net profit of 26800 during the year. It means that they are having sufficient amount of capital for
the further expansion of business at different parts of the country (Urner, 2016). They are selling
different products and services and from that more than 360000 of total sale of coffee are done
during the year. In that process, they are incurring huge expenditure over 181000. In order to
analyse various situation from the income statements they need to analyse various ratios:
Calculation of profitability ratios: In order to analyse profitability position of marvin
and smith they need to use below mention two ratios:
1. Gross profit margin ratio: Gross profit / Sales *100
2. Net profit margin: Net profit / sales *100
Particulars Amount
Sales 360000
Gross profit 208000
Net profit 26800
Gross profit margin 57.80%
Net profit margin 7.40%
By using both gross and net profit margin ratio profitability position of Marvin and Smith
can be determined. It can analyse that GP margin is 57.80% and NP margin is 7.40%. In the
expansion of business they required funds but after analysing ratios, it has been seen that the
amount of funds available with them are not enough after paying all debts. The rate of gross
profit margin is high as compare to the net profit margin.
Calculation of Liquidity position: For this purpose Marvin and Smith need to go through with
current ratios and liquid ratio. It will help them to analyse total cash availability to meet out
liquidity position.
Current ratio = current assets / current liabilities
Liquid ratio = Liquid assets / current liabilities
Particulars Amount
Current assets 35400
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Current liabilities 6200
Inventory 8000
Liquid assets 27400
Current ratio 5.7
Liquid ratio 4.4
Current ratio is use to determine payment of short term assets and liabilities. After
analysing the above statement it has been found that position of current assets are more as
compare to that of liabilities. It is come out to be 5.7 : 1. Likewise, liquidity position of company
is 4.4 : 1 which is more effective as compare to ideal ratio of 1: 1. From the above analysis, for
the expansion purpose company is having positive position to make their valuable decision.
5. Analyse of viability from expansion
From the above analysis, it has been discussed that planning for expansion of new
business in European nation is more impressive idea. Regarding this various factors are need to
considered that are associated with the business. Marvin and smith has chosen France to set up
their new venture of coffee shop from which they can gain maximum return in very short span of
time. All this can only be possible through proper plan and strategies and by using right market
research. Before entering into new market, a company study is need to be done my planning
marketing mix for the company (Anderson and et. al., 2014). It will help them to determine
positive and negative aspects so that its impacts can be control. The resource which are used in
setting up new business is need to be utilised in well organise manner so that minimum wastage
can be done. The innovation can be done by using quality in service delivery and offering
superior product to the customers. In relation to make business more effective Marvin and smith
is need to implement corrective actions that can control their outside impact over there business
performance.
CONCLUSION
From this above project report, it has been concluded that business is an effective aspects
for any person or organisation. They can make use of profit by using positive implementation of
plan. The project summarised with various information about opening of new coffee shop at
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other part of UK. For this, proper research of market and related implication are discussed under
this project. Use of marketing mix for the purpose of setting new venture and its impact are
explain under it. Analysis of financial performance is also done through calculating certain
ratios. At last, viability of impact can be analysed that are available during initial phase of new
business.
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REFERENCES
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Hill.
Lai, T. T and et. al., 2014. School principal leadership styles and teacher organizational
commitment among performing schools.Journal of global business management.10(2).
p.67.
Cross, S. E., 2013, June. A model to guide organizational adaptation. In Engineering,
Technology and Innovation (ICE) & IEEE International Technology Management
Conference, 2013 International Conference on(pp. 1-11). IEEE.
Zakrajsek, T., 2013. Essentials Skills in Building and Sustaining a Faculty Development Center:
Budget and Staff. Journal on Centers for Teaching and Learning.5.
Romano, A., 2013. Investigative Essentials for Journalists in Multicultural and Diverse
Communities. In Journalism Research and Investigation in a Digital World (pp. 263-
272). Oxford University Press.
Prewitt, J. E. and Weil, R., 2014. Organizational opportunities endemic in crisis
leadership.Journal of Management Policy and Practice. 15(2). p.72.
Urner, J., 2016. Development Of Intersensory Perception Comparative
Perspectives.Development.1. p.2.
Anderson, D.R and et. al., 2014.Essentials of statistics for business and economics. Cengage
Learning.
Online
Definition of 'Marketing Mix. 2017.[Online]. Available through:
<https://economictimes.indiatimes.com/definition/marketing-mix> .[Accessed on 9th
November 2017].
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