Business Essentials: Marvin & Smith Coffee Shop Expansion Report

This report analyzes the potential for Marvin & Smith, a UK-based coffee shop chain, to expand its operations into the European Union, specifically focusing on Germany. The report begins with a justification for expansion, highlighting the success of the brand in the UK and the opportunities presented by the German market, particularly in Dresden. It then details a tailored marketing mix, including product (coffee quality and snacks), pricing (competitive pricing strategy), place (Dresden location), and promotion (various media and promotional strategies). The report also discusses the organizational and competitive impacts of expansion, emphasizing the importance of organizational culture and gaining a competitive advantage in the Dresden market. Furthermore, it evaluates the financial implications, analyzing profitability and liquidity ratios to assess the company's financial stability and its capacity for investment. The conclusion summarizes the findings, recommending Germany as a suitable location for expansion and highlighting the importance of competitive pricing and integrated marketing strategies to promote the business. The report is a comprehensive analysis of the expansion opportunity for Marvin & Smith.

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TABLE OF CONTENTS
Table of Contents.............................................................................................................................2
INTRODUCTION...........................................................................................................................1
1.Justification and challenges of expanding business............................................................1
2. Tailored marketing mix in accordance with expansion of Marvin and smith’s.................2
3.Impact that are faced by Marvin and Smith........................................................................3
4. Evaluation of impacts of profitability and liquidity position.............................................3
5. Conclusion..........................................................................................................................4
REFERENCES................................................................................................................................6

INTRODUCTION
Business is one of the reliable measure that is done for the purpose of operating their
business transactions in proper manner. This project report is based on opening a new British
coffees shop chain operations in some other part of EU nations. The main purpose of this report
is to organise a research for analysing and suggesting the most reliable EU country and strategies
to be chosen for expansion of coffees shops. Apart for this, use of marketing mix is also being
done in context to opening a new business. Implication and evaluation of various complication
that are associated with the expansion of new shops is discussed under this report (Anderson and
et. al., 2014).
1.Justification and challenges of expanding business
Marvin and Smith’s started their business operation in the year 2016. After getting
valuable amount of success in UK market, both the owner is looking forward to expanding their
coffees shops in another potential market in European nations. Massive growth in shorter period
can be valuable achievement for both the owners. Unique customer services and facilities and
targets on fair trade in coffees shop makes them stand among their competitors all over the UK.
The enhancement in customer preference of both the owners and their positive impression on
global visitors in UK show the potential of an organisation. It will assist in attaining better
growth and success in the market. As per the mentioned analysis, it has been found that
maximum number of German people used to spend their leisure time by taking afternoon coffees
and with some popular snacks. It will be the direct opportunity for Marvin and Smith’s coffee
shop to get a decent flow of consumer on continuous basis (Bradford, 2015).
They have chosen Germany for the shop and there is various reason for this suggestion.
Because of the culture and lifestyle of German people are the main factors for Marvin and
Smiths. The consistent consumption rate of coffee rate in Germany is about 150 litres. Fair trade
is highly ordered in every products and services that relies on particular sector in Germany
because of certified and authentic products between domestic customers. As per the secondary
research, Dresden would be most potential market place in Germany by Marvin and Smith’s
coffees. They do have one of the reliable business and transport facilities in the world. The
another important aspects of Germany economy from overall impact that is arises in economic
crisis in 2009. Per capital income of country has increased from 42,235.33USD to 44,481.97
USD from 2016 till 2017. However, German GDP has attained a sufficient amount of growth
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with 1.8 % by the closing of 2018. It means that there are great chances of getting more reliable
growth and sustainability in near future time (Jones, George and Langton, 2013).
2. Tailored marketing mix in accordance with expansion of Marvin and smith’s
This particular section of project report has been utilised in order to develop a valuable
marketing mix planning for the purpose commencing business operation in more effective
manner. It is essential for Marvin and smith to make proper analysis of market by using
appropriate marketing mix components. Some of them are mentioned underneath:
Particular Strategic recommendations
Product It is essential part of coffees that is to be served in Marvin and Smith coffees
shops. It must be of appropriate quality which is made out of fine beans of
Gumutindo. Henceforth, café is suggestion for retaining their culture of various
customer. The other important part of innovation must be done in the coffee shop
is to serve snacks with coffees. They would also need to make continuous
modification in their popular types and flavour of items that are mainly consumed
by the Germans.
Price It has been seen that all the coffees shops that are being served by Marvin and
smith is limit with certain brand recognition in global market. Likewise, there
would be various old time coffee houses located in Dresden. The prices are one
think that can directly make impacts on the overall growth and profitability of the
business. A standard cup for coffee is being set in between EUR 1.5 and 2 in
Germany. Henceforth, both parties required to fix their costs of their coffee to
EUR 1.5 so that client need to offered with appropriate quality at low prices
(Patten and Newhart, 2017).
Place Dresden is the one place which is selected by Marvin and Smith’s coffee shop in
Germany. The main reasons for selecting this place is mentioned underneath:
 It is one of the oldest place which is founded in 1934 and age-old culture
of coffees and other products.
 Maximum number of visitors are gathered at this place during the time of
festival.
 It is best known for its old cake market that draws the attention of
customer that can come once in the year.
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Promotion Both partner where going to start a new outlet of coffee shop in Germany. Thus,
they need to make appropriate promotion of their business so that maximum
number of customers can get attracted towards them. There are various sources
from which promotion can be done. Some of them are done by using Television,
Social media and posting hoarding at major locations. Some basic promotional
strategies must be used such as serving coffee with complementary dishes for a
particular period of time. They must be use unique theme of concern culture and
consumer facilities such as charging ports and Wi-Fi facilities (Scopes, 2013).
3.Impact that are faced by Marvin and Smith
There are different kind of impact that are required to be associated with owner of Coffee
shop. It is essential for them to face two of the most similar impact those are faced by Marvin
and Smith Coffee shops to cover wide number of terrestrial region for operating in Germany are
mentioned underneath:
Organisation Culture: It has been found that culture is one of the important aspect for
Marvin and coffee to attract maximum customer toward their business. They are majorly focused
on fair trading, convenience of client and pleasant theme. They need to overlooks that there is
not any kind of discrimination among staffs and employees. Equal respect to all guest of
customer is one of the main target of Marvin & Smith coffee shop (Grigsby, 2012).
Gaining competitive advantage: Attaining maximum competitive advantage is Dresden
market that will also be more tough task in front of Marvin & Smith. This market is more known
as for the delicious cake and loyalty between local customer (Competitive Advantage, 2018).
This would make them to compete with other cafes with proper quality of their coffee because of
effective use of coffee bean. Likewise, German age old cafes will be naturally having positive
experience in developing tastiest cakes as per the demand of customers.
4. Evaluation of impacts of profitability and liquidity position
In order to make proper analysis financial stability of the company, they need to make
analysis of profitability and liquidity ratios of the company.
Profitability ratio:
Ratios Formula Results
Gross profit Margin Gross profit / Total Sales *100 208000/360000*100
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= 57.8%
Net profit Net incomes / Total Sales *100 26800/360000*100
=7.4%
ROCE Net operating profit / (Total assets-
current liabilities) x 100
=800/(113000-6200)
x100=25.09%
From the above ratio calculation, it has been found that gross profit generated by the
company is with healthy rate of 57.8%. It represents effective financial strength for expanding
into new market. While in case of net profit observed to be 7.44% at the closing of 2016 that is
strong point for financial growth. Likewise, they are getting decent amount of return in 2016
which is about 25.09% (Tomsho, 2012).
Liquidity position:
Current ratio Current assets / Current liabilities 35400/6200= 5.7
Quick ratio Quick assets – (stock + prepaid
expenses) / Current liabilities
35400-8000/6200=4.4
According to the above calculation, it has been found that current ratio of the company was
5.7 that indicate presence of maximum assets value within an organisation which is to be
invested for global expansion. While, quick ratio would be determining with 4.42 that provide
information about overall capability for making large number of investments in Germany
market.
5. Conclusion
From the above project report, it has been concluded that Germany has been one of the
appropriate place that is more suitable and suggested to Marvin & smith coffee shops. There is
various reason for choosing that particular place which are discussed effective in context to
business. On the basis of German people demand they need to included cake with coffees that is
new option for them. Popularity of Dresden between domestic and global units that is effective
reliable for attaining maximum growth in near future. Every aspect related with transportation,
customer perception and other options are essential supporting them to start their new shop. Use
of competitive pricing and integrated strategies in order to promote their business all over the
market. Moreover, both profitability and liquidity position of the company is also supporting
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them to make expansion of their business at global market. The entire report is estimated to be
reliable and satisfied for both the owners in respect to make decision regarding expanding their
coffee shop outlets.
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