Expansion Strategy and Financial Analysis: Marvin & Smith Coffee Shop

This report analyzes the expansion plan of Marvin and Smith's Coffee Shop, focusing on entering the French market. It begins with identifying France as a suitable expansion location, justifying the choice based on market analysis and potential customer demand. The report then details a tailored ...Read More

Coffee
Shop

Table of Content
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......................................................................................................................................5
5. Overall summary regarding viability in international expansion.........................................................8
CONCLUSION............................................................................................................................................8
REFCRENCES............................................................................................................................................9

INTRODUCTION
Term launching a new business means a condition when an individual or a group of
individual wants to establish or start a new business entity in order to fulfill demand and need of
customer as well as society. While launching a new entity a person needs to do various things
such as market analysis and evaluation in order to know demand and need of consumers in
effective manner (Au and et. al., 2013). Along with this they also required to identify and arrange
resources and equipments which are required in this process. Organization on which this report is
based is Marvin and Smith’s Coffee shop that launched in January 2006 at Wandsworth, South
London. This coffee shop is founded by two people Hank Marvin and Patty Smith, who works
together in food and catering industry and now decide to launch own coffee shop. They decide to
offer herbal, natural and quality products and for coffee they will use finest coffee beans. Along
with this they decide to provide theme night in which they do various activities or program such
as board game night, chat with Nanna and ask about any questions and many more. This report
include topic like European country which is suitable for this company in order to expand
business and it also explain marketing mix in respective context. Moreover it explain various
factors which impact on company while expanding business as well as it contain analysis and
evaluation of respective company profitability and liquidity which affect decision making
process.
TASK
1. Identify a county for expansion of business and justify choice
According to given situation of Marvin and Smith’s coffee shop which is given, there are
two peoples Hank Marvin and Patty Smith those are working at food and beverage catering
industry. After getting experienced for long duration they are decided to launch their own coffer
cafe at another country. From where they can expand their customer base and profitability ration
in effective and efficient manner. For which they decide to market analysis and evaluation in
order to decide customer’s base and location according to what products they are offering.
During development of business they face various issues and problems such as customer demand
are changing, budget, resource arrangement and many more. So it is responsibility of manger of
respective café to develop and maintain their strategies and plans in effective manner according
to culture and demand of France potential customer (Vogel, 2018). That leads to increase in
profitability, customers base and market shares in effective and appropriate manner.
2. Present a tailored marketing mix in relation to the coffee shop expansion plan abroad
When an organization wants to expand their business at a marketplace they have to
conduct marketing mix that help them in launching business in effective and appropriate manner.
In respect of Marvin and Smith’s coffee shop when they decide to expand business in France
they will conduct marketing mix. Through which they able to expand business in effective

manner. Explanation of marketing mix in respect of Marvin and Smith’s coffee shop is
mentioned below:-
Marketing Mix:-
It is defined as a procedure or technique which is conduct by a company which helps
them in attracting customers in effective manner that leads to brand image as well as products of
an organization (Gupta, Goktan and Gunay, 2014). Through which they able to attract more and
more customers in order to enhance profitability and customers in proper and effective manner.
Marketing mix include 4 P’s which are product, price, place and promotions. Whose explanation
in context of Marvin and Smith’s coffee shop is mentioned below:-
Product: It refers to the product which is offer by Marvin and Smith’s coffee shop at
their new location of expanding business which is France. So it is role and responsibility of a
manger of respective company is to develop strategies and plans according to demand as well as
need of customers. So they decide to product products with herbal, fresh and good quality
products at affordable price.
Price: It is a factor which gives value to a products and services of an organization. In
respect of Marvin and Smith’s coffee shop they are offering their products with premium price at
market of France market. Along with this is responsibility and role to decide products of product
in appropriate manner.
Place: It refers to the factor by which an organization can decide appropriate location for
expanding a business n effective and appropriate manner (Heald, 2018). In context of Marvin
and Smith’s coffee shop they must decide appropriate and effective place at France market so
that they can attract more and more customers in effective and appropriate manner. Along with
Illustration 1: Marketing Mix
(Source: Marketing Mix, 2019)

this they also decide place from where respective company can communicate to its suppliers,
retailers and wholesalers in effective and proper manner.
Promotion: It is a factor by which an organization can decide promotional and
advertisement activities in order to promote their products and services in effective manner
(Pinto and Garvey, 2016). Ian respect of Marvin and Smith’s coffee shop they decide to do
promotion through digital and social media in effective manner. Along with this they can also do
promotion through print media such as news paper, magazine and pamphlets.
3. What are the implications of the need for company to cover a wider geographical area in terms
of a different country
If an organization decide to expand their business operations and functions in effective
manner at diverse geographical area of different countries then they have to go through various
procedures. During which they have to go through various major issues and problems that affect
their business operations and functions. When Hank and Smith decide to launch their business
with name of Marvin and Smith’s Coffee Shop at France they have to go through various
problems and issues. Along with this they have to go through several changes in respect of
various factors. Such as information system of a company for managing data an d information,
supplier chain process, culture of an organization, staff, competitors and many more. There are
various major factors which influence business of Marvin and Smith’s Coffee Shop, those are
explaining below:-
Organisation culture:
Organization Culture is defined as value, belief, assumptions, ways of interaction,
Objectives and many others which is need by an organization in order to conduct their business
operations and functions in effective and appropriate manner. For this company develop and
follow various factors such as organization size, technology which company using now a day for
expansion, style of working, objectives, goal and many others (Boyd and et. al., 2015). It is very
essential or necessary for an organization to analysis and determine market if they decide to
expand business in another location or country. Along with this company also able to develop or
create strategies, plans, policies, rules, regulations in order to operate business operations and
according to requirement of organization.
So when Marvin and Smith’s Coffee Shop plan to expand their business operations and
function in another country market they will conduct market evaluation and determination
through which they able to get understand as well as aware about culture of France in which
they are expanding. If they will not conduct analysis and evaluation in effective manner, they not
able to plan strategies in efficient as well as appropriate manner. This will occur because they
not able to develop strategies and plans in appropriate manner that leads to conflict situation and
reduce productivity of employees. Along with this company management also able to do
allocation of resources as well as duties in appropriate and effective manner. But organization

culture that is developed by Marvin and Smith’s Coffee Shop is effective because they mainly
focused on employees and customers welfare and effectiveness.
Personnel and managing staff issues:
This refers to the issues and problems that is face by an organization’s personnel and
managing staff while conducting their work or task. If in a company employees face any issues
or problems it can directly and indirectly affect performance and motivation that leads to
decrease in productivity and profitability at a workplace (Garg and Garg, 2013). Thus it is role
and responsibility of a manger of an organization to develop as well as maintain effective and
positive organizational culture so that employees not face any issue and problems.
In context of Marvin and Smith’s Coffee Shop they conduct market and organization
analysis on a regular basis so that they can develop policies and rules according to situation and
condition. Along with this they also able to develop strategies and plan in respect of situation
which currently organization is going through. Management of Marvin and Smith’s Coffee Shop
develop plans by collaboration both location or area cultures so that both location employees feel
connected and coordinated. Along with this they also decide to provide training and
development of employees which help both location employees in conducting work or task in
effective and appropriate manner. It is also major role and responsibility of Marvin and Smith’s
Coffee Shop to communicate work to employees of both locations in appropriate way so that
they feel connected and motivated. Moreover staffs also feel free while discussion issues and
problems to employers. That helps in developing and maintaining strategies, plans, rules and
regulations in effective manner according to issues as well as problems which is face by staff.
Due to this employees feel motivated and conduct their work with full effectiveness which leads
to profitability and productivity.
4. Use financial information, evaluate how their profitability and liquidity may impact on
decisions available to them
According to the given case study of Marvin and Smith coffee shop, there are two people
Marvin and Smith who are planning to launch their own coffee cafe with name of Marvin and
Smith coffee shop at market place of German. But before they open there business at respective
market they conduct analysis and evaluation of market in order to understand customers behavior
and requirement of budget for expanding business (Halinen, 2012). Along with this they also
able to know and evaluate about their performance at United Kingdom market in effective and
appropriate manner. In respective case financial position of a coffee shop is determine by
financial status of Marvin and Smith. It is consider as effective and appropriate when respective
coffee café will earn more net profit of 26800 within a particular time period in appropriate
manner. At 2016, December Marvin and Smith coffee shop create and analysis their profit and
loss status which outcome is identify as a crucial position. According to analysis of market
Marvin and Smith coffee shop must have to sale products and services of amount 360000 to earn

effective profit at a market place of German. For this process respective coffee café has to
generate more expenses in order to sales particular amount of products and services.
Profitability ratio: It is defined as a statement of financial status of a company by which
they able to analysis and define ability of a business to generate as well as enhance profit and
earnings by its revenue, operational cost, balance sheet, assets, liabilities and many more
(Freeman, 2012). Along with this they able to know financial status by which they develop and
plan strategies as well as policies in effective and efficient manner. Respective ration of a
company may increase or decrease according to time and situation of marketplace in appropriate
manner.
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 evaluating and analyzing above given profit and loss of Marvin and Smith Coffee
shop owners of cafes able to identify and evaluate their profit and loss. Through which they able
to analysis their financial status for expanding business in France in appropriate manner. By
fulfilling all the expenses of company Hank and Smith able to run and expand their business in
appropriate and efficient manner.
Liquidity ratio:
Current ratio Current assets / Current liabilities 35400/6200= 5.7
Liquid ratio Liquid assets / Current liabilities 35400-8000/6200=4.4
By evaluating above given ratio of Marvin and Smith Coffee Shop, it should be estimate
that liquidity position of respective coffee shop is effective and efficient (Schilling and et. al.,
2012). That will help them in enhancing business operations and functions in effective and
appropriate manner in order to expand customer’s base and profitability in efficient way.

5. Overall summary regarding viability in international expansion
In respect of given case there are two major persons Hank Marvin and Patty Smith, those are
working in a food and drinks catering industry and now they are planning for launching a new
coffee shop with name of Marvin and Smith Coffee shop. To launch shop in effective and
appropriate manner they conduct various activities such as developing business plans and budget
in efficient way (Schilling and et. al., 2012). Main reason for developing business plan is to
identify efficient country or area for expansion. Due to which they do evaluation and analysis of
various countries and behavior of customers in respective countries. After conducting all
evaluation respective coffee cafe decide to launch their business at France marketplace. Thus
accordingly both peoples plan strategies and resources for launching business in effective and
efficient manner at respective market place. Along with this Hank Marvin and Patty Smith also
conduct financial statement evaluation so that they can know their efficiency. They also develop
plan and strategies in order to conduct market evaluation and analysis in order to identify
potential target customers in proper way. That will help them in expanding business, increasing
profitability and customer’s bases.
CONCLUSION
From the above discussed topic it can be analysis and conclude that launching and
expanding business in effective manner required various things such as evaluation of market as
well as company. This will help company in knowing and understanding customers or market
need and demand and requirement of resources which a company need to run a business in
effective and appropriate manner. Along with this company able to develop strategies and plans
in order to fulfill need as requirement of society. When a company expand their market they
must identify their target market by which help in making decisions as well as budget in order to
products and services in effective and appropriate manner. When a company develop budget in
proper manner they able to identify resources, process and equipments in order to conduct
strategies. Through budget an organization also able to know their financial status and further
requirement of capital for accomplishment of task in appropriate manner. When they find there is
lack of fund then they will arrange or borrow it from various financial resources like banks,
investors, shareholders, financial institutions and many more.

REFCRENCES
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Vogel, S.K., 2018. Freer markets, more rules: Regulatory reform in advanced industrial
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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
Venturing. 29(2). pp.273-288.
Heald, M., 2018. The social responsibilities of business: Company and community, 1900-1960.
Routledge.
Pinto, C.A. and Garvey, P.R., 2016. Advanced risk analysis in engineering enterprise systems.
CRC Press.
Boyd, B. and et. al., 2015. Knowledge transfer in family business successions: Implications of
knowledge types and transaction atmospheres. Journal of Family Business
Management. 5(1). pp.17-37.
Garg, P. and Garg, A., 2013. An empirical study on critical failure factors for enterprise resource
planning implementation in Indian retail sector. Business Process Management
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Halinen, A., 2012. Relationship marketing in professional services: a study of agency-client
dynamics in the advertising sector. Routledge.
Freeman, M., 2012. To adopt or not to adopt innovation: A case study of team-based
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Schilling, A. and et. al., 2012. Understanding professionals' reactions to strategic change: the
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Online
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