Business Expansion Strategies for Marvin & Smith Coffee Shop

This report provides a comprehensive analysis of the business expansion strategy for Hank Marvin and Patty Smith's coffee shop, focusing on entering the German market. It begins with an introduction to the factors influencing business decisions, including political, legal, social, and technological aspects. The report then delves into a detailed market analysis of Germany, highlighting its suitability for the coffee shop due to factors like a cold climate, fair trade policies, and a strong existing coffee culture. A key section focuses on the marketing mix, covering product development (healthy coffee options), pricing strategies (cost-effectiveness and comparative pricing), place (market location and online sales), promotion (e-marketing and social media), people (German-speaking staff), process (traditional coffee-making methods), and physical evidence (shop design). Further, the report examines crucial aspects of organizational culture, supply chain management, and financial ratios like liquidity ratios and current ratios to ensure successful expansion. The conclusion summarizes the key findings and recommendations for the coffee shop's expansion strategy.

Business Essentials

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
TASK 2............................................................................................................................................4
TASK 3............................................................................................................................................6
TASK 4............................................................................................................................................7
TASK 5............................................................................................................................................8
COCLUSION...................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Each and every company has a need to analyse the factors which can control them to
work in the environment, mostly for those organisation which are going to start a new business
to accelerate their revenues (Ebert and et. al., 2014). Political aspect and rules and regulations of
the legislation are providing a guideline in which company members have to make their business
activities. The present report is based on the Hank Marvin and Patty Smith which are planning to
open a new coffee shop in South London. They are having an objective to provide a luxury
service to their customers which can increase the number of attracted people. They are having to
provide some extra facilities to their customers like; WIFi which is a need of the customers. This
report is having content on the justification to select a country to expand business and marketing
mix for this.
TASK 1
It is essential for the Marvin and Smith to increase their business to grow their revenues
so they have to make analyse properly about those markets in which has all the qualities and
features which they want. Political, legal, social and technological factors are having huge
impact on the companies activities which have to be analyse by them. Market growth is a factors
which can create a direct impact on the companies business so it is necessary to analyse the GDP
rate and GNP rates which can shows the country's growth in the recent times. As the Marvin and
Smith are focused to grow their business in the European Union so they have to analyse the
countries which are having all the things and features which can be used by them to develop their
business in these countries. As the European Union has 28 nations in it which are having a trade
policy so they have to analyse the needs of the customers in those countries as per the products
(Hair, 2015). To expand business it is essential for them to analyse the needs of the customers
and social trends which has a huge impact on the business. Germany is also a EU nation which
has a cold climate which creates a need in the consumers to eat and drink hot products so Marvin

and Smith can expand their business in the Germany. Some factors are here given under below
which can help to describe the reasons to start business in it;
Fair Trade policy; German government supports to those business entities which are using fair
trade policy in their business. According to this supplier can make their supply to the
organisations which are working across the boundaries which are providing them impressive
benefits against to the products. German government is supports for those companies which
wants to expand their business in their nations cause it increase their foreign funds. Germany is
providing proper support to new companies which are not having a proper knowledge of the
market, government rules, tax and other responsibilities.
Environmental aspects: As the Germany is having cold environment which creates need in the
customers to take a hot drinks. As they are having deals in the coffees, it helps them to attract the
customers easily (Wilson, 2014). Most of the peoples which are living in the Germany likes the
black coffee which is healthy and as well as helps to retain the body temperature while working
in the outer areas. As the Marvin and Smith believes to provide a basic taste in the coffee it can
helps them to meet the needs of the customers.
Market: Most of the German peoples are intakes coffee in the regular basis which is effective for
the Marvin and Smith, approx 25,000 branded outlets are available in the market which shows
that peoples are interested to drink coffee.
Gross Domestic Production: Germany has € 3.70 Trillion gross domestic production and auto
mobile industries are having full support in this. So it can be used by the Marvin and Smith they
can make a deal with these companies to provide coffee's in lunch and evening time.
TASK 2
Marketing mix are having focus on all of those factors which are essential to decide, as
the Marvin and Smith are planning to expand their business in a European Union nation. They
have to use marketing mix to take decisions on product, price, promotions, place etc. They have
to make their plan and strategies according to the marketing mix to be successful in the market.
So factors are described under here for the marketing mix decisions:
Products: As the Marvin and Smith are having their expertise in coffee and they are having
target to expand it in the Germany, they have to make analyse the needs of the peoples and their
target audience. They have to make research on the taste which their customers wants from them.
Most of the Germans are having focus on their health and they want to take healthy drinks, so

Marvin and Smith have to provide a proper healthy coffee to their customers which has a taste
and nutritions in it (Guffey and Loewy, 2012).
Price: As they are entering in the country and wants to increase their business, they have to
analyse the market. They have to analyse that retaining companies and business entities pricing
strategies. They have to use cost effectiveness in their activities to decrease their prices for those
peoples which are having focus to purchase a cost effective products. So they have to use cost
effective price strategies and have to use comparative prices for those coffee which are available
in the market. It can help them to make initial customers and it can helps them to increase their
number of customers in the starting phase.
Place: It is essential for them to choose a right place to deliver their services and products to
customers, it has a huge impact on the business and revenues cause most of the customers wants
a convenience to reach out to their target products. As the Germany is having a cold environment
so have to start their business from a shop which is situated in the market and having a little open
space in it's front (Anderson and et. al., 2014). They have to start their business in the market
which is easy to reach for their customers. They have to use online sales also for those customers
which wants to take a coffee at their home.
Promotions: It is essential part to increase the number of peoples which knows them so they
have to use effective promotion strategies to advertise their products and services in their
targeted market. Most of the peoples are having c9onnected with the internet, e mails and social
media so Marvin and Smith have to use it to advertise their brand and as well as their products,
place also. They can make their Facebook account to make promotion of their products in their
target audience. They can use print media also but it is costly and old method for the advertising.
So they have to emphasis on the e marketing tools which are contemporary and effective to
impact on the target audience.
Peoples: It is essential for the Marvin and Smith to use peoples in the organisation which knows
the local language, so they have to recruit German peoples in it which knows the customer's
exactions and needs. As well as it is helpful for those customer which does not know the English
to communicate.
Process: It is related to the process which is used by the company to make the product as the
Marvin and Smith are having focus to provide proper taste of the coffee so they have to use their

traditional method to make a coffee, they have to use their traditional recipe to make coffee with
the latest machines (Omachonu and Einspruch, 2010).
Physical evidence: Packaging of the product and it's presentation creates a huge influence on the
customer's to attract them. So they have to use in a impressive way to attract customers in the
coffee shop, so interiors, colours and furniture can make a huge influence on the customers so it
can be used by the Marvin and Smith.
TASK 3
Some points are here which is essential for Marvin and Smith to cover a wider market in
the Germany, these points are here:
Organisational culture: It has a huge impact on the business as Marvin and Smith are working
in the London, they are highly customers oriented to provide them proper customers satisfaction.
An organisational culture contains beliefs and environment of the organisation which creates a
huge impact on the business and as well as on the customers. So Smith and Marvin have to
maintain this culture in Germany also to manage their business activities according to the
London and as well as to make a positive impression on the customers (Mendling, Recker and
Reijers, 2010.). As they are working open mindedly to adopt changes as per the requirements of
the customers which help them to be better as per the customers needs. Innovative changes are
acceptable by the customers which helps to make changes in the products, so they have to use
innovative changes in the coffee and as well as in their trading style to meet the customer's
expectations.
Supply chain: It is has direct impact on the customers as they are targetting on those customers
which wants to take a home delivery, so it is essential for them to manage a proper supply chain
to manage the effective supply against to the orders. Along with they have to make their proper
focus on those customers which are direct consuming their product in their outlet. The supply
management has a focus to deliver the right product to the right customers on right time. So they
have to use different team for online customers and present customers in the outlet. It can help
them to make their supplies effectively (Li, Lai and Wang, 2010). They have to use proper
supply management in Germany to provide proper customers assistance. It can increase the
profitability of the company and it can increase number of satisfied customers.
So above presented points are having huge significance and it has implication to increase
the customer satisfaction.

TASK 4
Liquidity ratio: it is one of the ratio which defines the liquidity status of the company. It
defines the total ability of the firm for paying off its short term debts against its assets out of total
profits of the company. Liquidity is calculated by dividing total cash by debts which are short
term in nature. After the calculation part if answer is more than one then it will mean that it is
fully recovered. Liquidity ratios have different forms or types:
 Current ratios: current ratios are those ratios which are calculated by a firm in order to
determine whether it is capable to fulfil its short term debts or not. It is also calculated by
dividing total assets by total liability of firm. The ideal ratio is 2:1. the higher the ratio,
the higher the company is bale to pay its liabilities off against its assets. Lower ratio is
bad for company as it create bad image in the market industry. Here the following is the
calculation of current ratio of Marvin and Smith as:
Formula
current liabilities /current
assets
Calculation
35400/6200=5.7
The ideal ratio that as been set
is 2:1 . so current ratio for
Marvin and Smith is 5.7:1,
which is much more than the
limit. So its good for their
firm.
 Quick ratio: It is calculated for identification of abilities of a company to pay short term
debts . Acid ratio is an another name for quick ratio (Mendling, Recker and Reijers,
2010). If the ratio is less than 1 , then the firm is not able to pay its liabilities and debs.
But if it is more than 1 it is able to pay off the debts and liabilities.
Formula
cash and its equivalents
+marketable securities /current
liabilities
Calculation=
(35400-8000)/6200=4.42
The quick ratio that has been
calculated is 4.42: 1, which is
greater than ideal ratio and it is
a good indicator. As, ideal
ratio is 1:1.
Profitability ratios: it is the ratio which identifies the capability of the company to make
income as compared to its expenses and costs that has been incurred . The various forms are:

 Gross profit ratios: Marvin and Smith calculates this ratio because for identification of
cost of goods and services against sale are generated by it.
Formula
=(Gross profit/sales)*10
Calculation
= (208000/360000)*100
=57.77%
It has been concluded that
gross profit margin of their
firm is much higher than ideal
ratio. So this is advantageous
for them.
Net Profit Margin: It has used by the company to make identification of the net profits which
are earned by the companies by their business activities. It is based on the sales and it is
calculated from sales (Hair, 2015). It can be calculated by the subtracting all of the indirect cost
and expenses from gross profits to analyse the net profits which is earned by the company in a
limited time period. It can determine the organisation's progress by comparing it to the recent
year's net profit. It is an essential part for the organisation to analyse their profit quarterly to
make essential changes in their business activities according to increase and decrease in their
net profit.
Here is calculation presented for the Marvin and Smith:
Formula
=(Net profit/sales)*100
Calculation
= (26800/360000)*100
=7.44%
According to this result it
shows that Marvin and Smith
are less compare it to the
gross profit ratio.
TASK 5
As the Marvin and Smith wants to expand their business in the Germany, it creates a
huge need for them to make proper analysis of the market and as well as customers. Most of the
companies which are successfully working in their own country wants to expand their business
in the overseas to increase their revenues. Mostly these organisation are having focus to expand
their business in their retaining product and services. Most of the companies which are having
trade wants to explore their business in the overseas (Yang, Davis and Robertson, 2012). It

creates a compulsion for them to create a proper market analysis of the targeted market, as in the
given scenario Marvin and Smith have to make analysis of the market and it's growth before
investing in it. They have to analyse the needs of the customers in the products and as well as the
business methods which can increase the effectiveness as per the needs of the customers.
Developing products and business activities can help them to attain the business objectives. Raw
materials, distribution centre and promotions also have to be based on the consumers cause
customer is a core part and they has a potential to provide business and revenues. Competitors
which are working in their target market is a risk for them so it is essential for them to make a
proper competitive strategy to be stronger in the market.
COCLUSION
The above concluded report is having focus on the needs for businessmen which wants to expand
their business in the foreign country. Marketing mix is essential part which can be used by the
Smith and Marvin to take decisions to make marketing strategies. They have to make proper
analysis of the market to make products more better as per the needs of the customers of the
Germany. Along with they have to provide extra benefits to attract customers towards them and
use their services initially.

REFERENCES
Books and Journals
Abdullah, D.F. and Sofian, S., 2012. The relationship between intellectual capital and corporate
performance. Procedia-Social and Behavioral Sciences. 40. pp.537-541.
Anderson, D.R. and et. al., 2014. Essentials of statistics for business and economics. Cengage
Learning.
Cobanoglu, C. and et. al., 2011. The impact of technology amenities on hotel guest overall
satisfaction. Journal of Quality Assurance in Hospitality & Tourism. 12(4). pp.272-288.
Ebert, R.J. and et. al., 2014. Business essentials. Pearson Education Canada.
Ferrero, I. and Sison, A.J.G., 2014. A quantitative analysis of authors, schools and themes in
virtue ethics articles in business ethics and management journals (1980–2011). Business
Ethics: A European Review. 23(4). pp.375-400.
Guffey, M.E. and Loewy, D., 2012. Essentials of business communication. Cengage Learning.
Hair, J.F., 2015. Essentials of business research methods. ME Sharpe.
Li, D., Lai, F. and Wang, J., 2010. E-business assimilation in China's international trade firms:
the technology-organization-environment framework. Journal of Global Information
Management (JGIM). 18(1). pp.39-65.
Mendling, J., Recker, J. and Reijers, H.A., 2010. On the usage of labels and icons in business
process modeling. International Journal of Information System Modeling and Design
(IJISMD). 1(2). pp.40-58.
Omachonu, V.K. and Einspruch, N.G., 2010. Innovation in healthcare delivery systems: a
conceptual framework. The Innovation Journal: The Public Sector Innovation Journal.
15(1). pp.1-20.
Smith, T.A., Mills, A.M. and Dion, P., 2012. Linking business strategy and knowledge
management capabilities for organizational effectiveness. In Conceptual Models and
Outcomes of Advancing Knowledge Management: New Technologies (pp. 186-207).
IGI Global.
Wilson, J., 2014. Essentials of business research: A guide to doing your research project. Sage.
Yang, D., Davis, D.A. and Robertson, K.R., 2012. Integrated branding with mergers and
acquisitions. Journal of Brand Management. 19(5). pp.438-456.
Online
Use Predictive Analytics and Machine-Learning. 2017. [Online]. Available Thorough:
<https://www.afflink.com/blog/4-innovative-supply-chain-management-techniques>.
[Accessed on 24th March 2017].
What is Supply Chain Management?. 2011. [Online]. Available Thorough:
<https://scm.ncsu.edu/scm-articles/article/what-is-supply-chain-management>.
[Accessed on 24th March 2017].