Business Expansion Plan: Marvin and Smith Coffee Shops

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Business Expansion
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Table of Contents
Introduction..........................................................................................................................................3
Question 1...........................................................................................................................................4
Justification for your choice of country must be given in relation to factors discussed in
seminars and potentially revealed by your own research.........................................................4
Question 2...........................................................................................................................................7
Present a tailored marketing mix in relation to the coffee shop expansion plan....................7
Question 3............................................................................................................................................9
Identify key factors Marvin and Smith should consider as they expand into an unfamiliar
territory and show how arising issues or d challenges may be interlinked and managed....9
Question 4..........................................................................................................................................11
Using the financial information presented above, calculate and evaluate how: 2 profitability
and 2 liquidity ratios may influence decisions available to them............................................11
2 profitability and 2 liquidity ratios may influence decisions available to them.....................11
(Note: ratios will be discussed in detail in class so be sure not to miss that particular
session)..........................................................................................................................................11
– what do they tell you about the current business?................................................................11
– evaluate how the calculated ratios influence decisions available to Hank and Marvin and
what implications might they have for the expansion plan?....................................................11
Question 5..........................................................................................................................................13
Write a concluding summary about the overall viability of overseas expansion at this stage
.........................................................................................................................................................13
Conclusion.........................................................................................................................................14
References........................................................................................................................................15
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Introduction
The expansion of business means the opportunity for the organisation to grow in any
sector or line of business. In other words business expansion means the company
have chance to grow the business and at the same time it contributes in growth and
development of the company. Business has risks associated so does the expansion
it will come with other positive or negative risks which will create the impact on
functions of the organisation. The business expansion is necessary as it increases
the business and at the same time it also increases the reach of company in other
countries or cities. This report concludes about the Hank Marvin and Patty Smith
who has been working in the food industry from a longer duration of time. They had
started the operation of business at lower level established the coffee shop in
Wandsworth which is located in South London. Afterwards, they have expanded the
business in London and opened two other coffee shops and further they are thinking
for the expansion of business in other countries.
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Question 1.
Justification for your choice of country must be given in relation to factors
discussed in seminars and potentially revealed by your own research.
The below is the list of countries and ratio which will help in analysing the perfect
country which will be suitable match for the expansion of business.
Country GDP(%) Coffee consumption(per
person per year)
Austria 0.542 6.1kg
Belgium 0.632 6.8kg
Bulgaria 0.120 2.9kg
Croatia 0.0794 5.1kg
Cyprus 0.0282 4.9kg
Czech Republic 0.293 4.0kg
Denmark 0.222 8.7kg
Estonia 0.0327 4.5kg
Finland 0.326 12kg
Germany 4.75 5.5kg
Hungary 0.184 3.1kg
Ireland 0.432 3.5kg
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Italy 1.77 5.9kg
Latvia 0.0404 3.4kg
Lithuania 0.0717 3.3kg
Luxembourg 0.0813 6.5kg
Malta 0.0168 2.3kg
Netherlands 1.07 8.4kg
Poland 0.648 3.1kg
Portugal 0.243 4.3kg
Romania 0.282 1.9kg
Slovakia 0.9 2.5kg
Spain 1.38 4.5kg
Sweden 0.401 8.2Kg

The above analysis tells of the different countries of Europe according to their GDP
and consumption of coffee. The need of analysis is necessary to determine the
understanding about the need of coffee in every country. Marvin and Smith wanted
to expand their business which requires the proper selection of other country as
expansion involves huge amount of investment and in return growth and
development is necessary. The table which we have prepared above carry the
analysis of different countries which shows Finland has maximum requirement of
coffee which we can target Finland for the expansion of business (Kumar and
Pattnaik, 2012).
Through the analysis it has been cleared that Finland is the largest in number for the
consumption of coffee and suitable place for the expansion of the business as it can
generate the higher results rather than other countries. The main reason for
choosing Finland is the country is financially stable and has subsequent growth in
the market of coffee and the options for growth are available. The financial stability
will help in generating more revenue and growth options and will be a successful
expansion. Marvin an smith have made the analysis which can help them to increase
the business and also helps in the expansion of business.
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Question 2.
Present a tailored marketing mix in relation to the coffee shop expansion plan.
The marketing mix is necessary as it helps in determining the expansion of business
in various countries and in accordance with them there is formation of strategies
which help in the proper expansion of business. The expansion of business is a
tough task which requires research, scenarios which are necessary before the
commencement of business expansion plan. The coffee business is totally customer
oriented which requires attracting the customers through offers and providing
promotional discounts. The marketing mix is the combination of various aspects
which require analysis before the commencement of business.
Marvin and Smith for the expansion of business used the marketing mix approach
which is briefly explained below:
Product: In every business product is the main thing as you are offering that to the
consumers. The main factor here is quality of the product as this is only way to
generate the business and have success. As both Marvin and smith are experienced
in the business of coffee through which they know the needs and demands of the
consumers which in return provides the growth and development of the product.
To compete with the competitors they have launched some facilities which help them
in generating more business. Marvin and smith have adopted the ways which can
help them in increasing the productivity as well as them offer some uniqueness in
their product which attracts the consumer. They started offering cookies and other
sort of offers with the coffee which attracts maximum customers and increase the
opportunities.
Price: This is the most crucial factor which plays role in attracting the consumers to
pursue their product and services. The consumers’ main concern is towards the
quality of product and as well as at the same time price as this is the combination
which generates the maximum business. In other words, Marvin and smith are
concerned with the making their expansion successful by offering quality product
with some uniqueness and other facilities to attract more and more consumers.
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The coffee business is already flourished in London very well and now the expansion
of business in Finland requires the place which has more customer base and initially
the price should be low in order to increase the footfall at the coffee shop. The
expansion of business requires the proper market research and other factors which
affect the working environment of the company (Singh,2012).
Place: The place is the most important and essential part of any business to
commence the business operations as it attracts the consumers and people get
aware about your business. Marvin and smith are expanding the business in new
country which requires market research in the whole Finland. As there are many
places which have coffee shops and they have to find the location which is in centre
of the Finland and generates more business. To achieve the maximum results they
have adopted the method of delivery coffee at home at nominal prices.
Promotion: The growth of the business is mainly depends on the marketing and
effective promotion techniques. The promotion increases the reach and people get
aware about your products and at the same time it attracts the consumers too. The
business is new in the business which requires online and offline strategies. Marvin
and Smith has adopted the way of online promotions through social media and
collaborating with food bloggers to make people aware about their venture.
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Question 3
Identify key factors Marvin and Smith should consider as they expand into an
unfamiliar territory and show how arising issues or d challenges may be
interlinked and managed.
The expansion of business includes pros and cons as it is an new country which
means difficulties can arise and for these difficulties there should be proper
resolution which can help the business to grow in proper manner.
Human resource management
Human resource management is backbone of every company and they have crucial
role in the process of expansion of business. Human resource managers of the
company finds the effective personnel according to the requirements of the company
and also they deal with the changes which arises in the process. The business
expansion in different country requires the proper information and understanding of
that place and requirements of the people by keeping all these things in mind they
hire the skilled and capable personnel which can contribute in the growth of the
company.
The major issues which arise in the process of expansion are cultural differences
and prevailing competitors in the market barriers in the growth and development of
the business. The effective management form the strategies which help in
overcoming these barriers. To eliminate the cultural differences it requires the skilled
and local employees who understand the place and know the mindset of customers.
To manage the things effectively it requires effective communication among the
employees and other management persons.
The expansion is in the new country which means pool of prevailing competitors in
the market which means formation of competitive strategies. These require the
formation of competitive strategies which helps in overcoming the situations and also
does not affect the working environment of the company.
Marketing
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The marketing plays important role in the business expansion in the new country as
the business is new in the market and for the country which you are dealing has
different set of language and culture which hampers the productivity of the company
in the market. The marketing is the option to make people aware and at the same
time it helps in increasing the popularity of the business. In today’s world the
competition is on peak which means the efforts are require double to promote and
flourish the business. There are proper marketing approaches which are followed by
companies to sustain in the market. Marvin and Smith shop has been running
successfully in London which means they have market dominance and they can ue
as strength for the purpose of expansion.
In today’s world the generation is more drawn towards the internet which means you
can attract them through the various ways of marketing. The analysis predicted that
Finland has largest coffee consumption country and at the same time they are
financially stable which means chance of the growth are high in nature.
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Question 4
Using the financial information presented above, calculate and evaluate how: 2
profitability and 2 liquidity ratios may influence decisions available to them.
2 profitability and 2 liquidity ratios may influence decisions available to them.
(Note: ratios will be discussed in detail in class so be sure not to miss that
particular session).
– what do they tell you about the current business?
– evaluate how the calculated ratios influence decisions available to Hank and
Marvin and what implications might they have for the expansion plan?
Profitability
Ratios:
Particulars 2017
Return on Assets 23.72%
Net margin 7.44%
The profitability of the company depends on the overall performance of the company
over the specified period of time which determines the financial position of the
company. Marvin and smith coffee shops have been operating business from a long
duration which shows they have achieved growth over the years. In 2017, the
company has retained the net margin of 7.44% which means they have achieved
growth more than the set standards. Net margin covers the overall profitability of the
business and hence it affects the financial performance and stability of the company.
It helps in determining the current profit earning capacity of the company and helps
them to formulate the strategies which help in fulfilling the long term goals of the
company. The Return on assets are 23.72% which implies that the company has
utilised the assets of the company which in return generated the huge amount of
income (Al and Alam, 2013). The profitability analysis helps the company to find the
current abilities and helps in performing the future plans and projects.
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