Market Analysis and Expansion Strategy for Coffee Shop

Desklib provides past papers and solved assignments for students. This report analyzes a coffee shop's expansion into Austria.

ADVANCED - ASSIGNMENT 1 (RPTN)
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Contents
Question 1:................................................................................................................ 3
Question 2:................................................................................................................ 5
Question 3:................................................................................................................ 7
Question 4..................................................................................................................9
Question 5................................................................................................................10
References...............................................................................................................11
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Question 1:
Austria is the country which speaks German and present in Central Europe. Austria
has joined the European Union in 1995, it is famous by his mountain villages,
imperial history, and also the rugged Alpine. Hank Marvin and Patty Smith want to
expand their coffee shop in Austria, they both are working together for the many
years in the sector of the food and catering industry. The Marvin and the Smith have
the same dream to run their own business. So for their dream, they decided to open
the coffee shop of their own. For their dream, Marvin and Smith spent their 12
months on the research and planning for the coffee shop and they collect details and
also decide the best location for their coffee shop, at last, they opened their shop
January 2017 in Wandsworth South London. Now Hank Marvin and Patty Smith
want to expand their business of coffee shop in Austria. But Austria has joined the
European Union in 1995 for Brexit negotiation (Cumming, et. al., 2016). Austria
supports Britain for granting more time for the negotiations and to avoid crashing out
from the European Union with there is no exit deal. There is also the possibility that
further defining the certain points and if it helps to avoid the Brexit scenario. Britain
leaves the European Union on March 29, through the opinion has increased the
extension of the deadline is to allow more time to overcome with the divisions in the
UK parliament and the conservative party. The Brexit Negotiations are generally
taking place between the European Union and the United Kingdom and the reason is
that the United Kingdom wants withdrawal from the European Union. This
negotiation period starts from March 29, 2017, at this time the United Kingdom
serves the withdrawal notice under article 50 that comes under the Treaty on the
European Union. On 29 March 2019, the prime minister of the United Kingdom agree
with the governments Brexit Treaty. The European Union is the UK's most important
partner in trading. At the 2017 beginning, 51% of imports in the UK come from
Europe and also 45% of UK exports went to the EU. At present, the UK is the current
part of the Single Market, which means the traffic barriers and non-traffic barriers has
been eliminated on the trade in the services and goods between the United Kingdom
and the other European countries. The United Kingdom is also the part of the
customs union that means the same tariffs is to be set as the other European
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Countries. This discussion shows that the Brexit negotiations will not make any
difference to the trading environment, so Hank Marvin and Patty Smith can expand
their coffee shop in Austria and to serve their best in the European countries. The
trade market will not affect the business that Hank Marvin and Patty Smith want to
open in Austria (Veilleux, et. al., 2018). Austria is also the best place where beautiful
mountains and villages make it unique from another country.
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Question 2:
Marketing Mix in relation to the coffee shop
Hank Marvin and Patty Smith want to expand their business of coffee shop in
Austria, for this, they have some strategies that are to be implemented. In order to
expand their business and stand from another coffee shop in the market, Marvin and
Smith decided the following steps:
 Marvin and Smith use the finest coffee beans that are from Gumutindo
coffee, fair trade suppliers run their own farms, in addition, they serve snacks,
pastries and cold drinks like mango juice, etc.
 Marvin and Smith always ensure that the staff of their coffee shop where well
trained and they have standard and they also offered wages to their staff that
makes it different from their competitors (Laukkanen, et. al., 2018).
 They also try to provide the environment in which their customer get relaxing
like east African feel and also provide some customers' needs such as
Powerpoint sockets for charging the phones and laptops and also provide
free Wi-Fi.
 Marvin and Smith provide themed evenings for the customers like chat with
Nanna and board game night. Marvin and Smith have strong ethics for
promoting trade (fair) and also expect to their staff to respect the values and
promote wellness and good attitude and behaviors in the workplace.
There is some marketing mix plan that is helpful for Hank Marvin and Patty Smith
that is very helpful to expand their business in the new country like in the European
Union.
The following are the points in which Marvin and Smith have to pay more attention:
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 Product: there are tangible assets and intangible assets both are very
valuable in the marketing mix for new business, intangible assets there are
some physical and also measurable assets that are useful in business
operations these include plant, property, and equipment in which land,
machinery, inventory, vehicles are coming in this assets. Now in Intangible
assets, it is used for long terms and this include patents, franchises,
trademarks, copyrights, and brands. The Unique Selling Proposition is a very
important part of the business plan. Marvin and Smith have to consider that
they are not only going alone on the streets of Austria that serves coffee for
the people. There are many competitors in the street and also millions of
people out there and they have no reason to change their habit to go to their
favorite coffee. So that's why Marvin and Smith have to go different in the
market. And also no customer think that the coffee is double washed and
handpicked but they only know about the taste of the coffee, so Marvin and
Smith have to take care about the taste of the coffee that is served to the
variety of customers in Austria.
 Place: At the time of place there is no matter that their coffee is how good
and the products that are used to make this coffee. The coffee shop is to be
in the right place and at the right time because the people go to the coffee
shop for the first time is due to convenience. Marvin and Smith have to take
care about the location where they want to open the coffee shop because
the location of any shop is that they cannot be changed easily so Marvin and
Smith take care about that there a coffee shop in the best location (Kim, et.
al., 2018).
 Promotion: the promotional strategy for a coffee house like building the
coffee house culture as an upcoming trend in Austria. The lots of advertising
is necessary because the country is new and Marvin and Smith run their
business in the United Kingdom and now they want to open the coffee shop
in the European Union country that is Austria. So it requires lots of efforts
and hard work to establish their business in Austria.
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Question 3:
Hank Marvin and Patty Smith want to expand their coffee shop business in Austria
this is unfamiliar territory and they both face some issues and potential challenges
like Human Resource Management, operations/supply chain management,
marketing and Finance, and accounting. But here the discussion is on the major
topic that is Human Resource management and marketing, these both are the
challenges that have to be faced by the Hank Marvin and Patty Smith in accounting
to expand their business in the new country like Austria.
Human Resource Management: for any business success employees are playing a
vital role. The employee's contribution and their hands pass through all single dollars
of sales. The employees play an important role in the business they may break or
make the company or business. In the case of Marvin and Smith if their employees
have positive interaction with the customers then definitely customer will come back
to their coffee shop and if the employees do not pay attention to the customers then
their customers will go too. It is very important for Hank Marvin and Patty Smith to
hire the right persons and train well and also motivate them to retain. By cover this
all points the Marvin and Smith should provide satisfying jobs, a positive work
environment, compensation, benefits and appropriate work schedules (Obeng,
2019).
The certain key values and principles used in the coffee shop culture by Hank Marvin
and Patty Smith. The quality of the product is to be controlled by Marvin and Smith
itself. The coffee shop management is strict about pleasing customers. Every
employee of the Marvin and Smith coffee shop has to go with the training so when
any critical situation occurred they will react with the right mind and also ensures that
the customers are fully satisfied or not. The selection of the employee is essential for
hiring the right man on the job. The most effective selection is done by evaluating the
skills and qualifications. When Marvin and Smith picking the best employee for the
job in the coffee shop, then the coffee shop will get a good performance of the
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employees. If Marvin and Smith employing the right employees for their business
then save time as well as money (Alasadi, et. al., 2015). The candidate’s entire
potential is to be testing who are applying for the job for the coffee shop. The Marvin
and Smith aspect employees which are adaptable, reliable, and also have the
capacity of the team working.
Marketing: For enhancing the customer experience for the business like a coffee
shop like Marvin and Smith they have to take care of some special points such as:
 Wi-Fi facility: the coffee shops get benefit from developing the wide
variety of customer friendly services such as advertising from the mouth
can be effective to turn the large group of people into the permanent
customers or loyal customers. To provide the Wi-Fi in the coffee shop and
also provide electric outlets at each table for laptops and phone charging.
If there is more than one coffee shop in the area then make sure to serve
or provide offers that competitors do not have.
 Loyalty and incentive programs: Marvin and Smith take care of the
loyalty programs because this is the must for any coffee shop. It is just like
the promise, for example, giving a free coffee on every Nth cup or provide
free products when customers spend some amount that is in reach any
certain limit.
 Promotions and Advertising: Sales and promotions give the coffee shop
a boost and also advertising time to time give a boost in new visits. The
strategy like placing coupons in the local newspapers and also in the
magazines. Using an Ad to promote any live entertainment conducting in
the coffee shop (Al-Zoubi, 2019).
 Digital and social media: promoting the coffee shop on social media
channels and maintaining them. Bring the store in the market when sharing
the content help's to increase the brand to reach in the local community.
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Question 4
Hank Marvin and Patty Smith coffee use different types of ration in their business for
evaluating their performance at a different level. This will able to the management to
take a corrective step in order to remove any falseness and unnecessary things from
the business that made directly or indirectly effect to the company business.
Following are the ratios that use Hank Marvin and Patty Smith coffee company for
checking their profits and liquidity in the business.
Gross profit 208,000
Net sales 360,000
Net profit 26,800
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Profitability Ratio
G/P ratio = (gross profit/ net sales)*100
(208000/360,000)*100
57.78
N/P ratio = (net profit/ net sales)*100
(208000/360,000)*100
7.44
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Inventory 8000
Cash 27,400
Current assets 35,400
Current assets 35,400
Inventory 8000
Liquid assets 27,400
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Current liabilities (Trade
Payables)
6200
Liquidity Ratio
Current ratio = current assets - current liabilities
35,400 - 6200
29,200
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