Business Expansion Report: Filiz and Smith's Coffee Shop in Germany

This report provides a comprehensive analysis of the potential expansion of Filiz and Smith's coffee shop into Germany. The research begins with an assessment of the German market, highlighting its suitability due to high development, demand for quality products, and consumer purchasing power. The report then examines the marketing mix (product, place, price, and promotion) tailored for the German market, emphasizing the importance of product quality, strategic location, competitive pricing, and effective promotion through social media. It also addresses the implications of covering a wider geographical area, including personnel management, supply chain considerations, and distribution challenges. Furthermore, the report evaluates the profitability and liquidity of the coffee shop, including the gross and net profit margins. Finally, it concludes that the overseas expansion plan is viable, given the market potential and the company's sound financial position. The report emphasizes the importance of ethical considerations, staff welfare, and the need to provide unique coffee flavors to satisfy the German target market.

Moving the coffee shop in any
European country
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TABLE OF CONTENTS
1. Research and deciding on country where Filiz and Smith's coffee shop can expand into ......3
2. Marketing mix in relation to coffee shop expansion plan........................................................3
3. Implications of the need for Filiz and Smith's to cover wider geographical area....................4
4. Evaluating profitability and liquidity.......................................................................................5
5. Overall viability of the overseas expansion.............................................................................6
REFERENCES ..............................................................................................................................7
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1. Research and deciding on country where Filiz and Smith's coffee shop can expand into
On researching it has been gained that country within European union wherein Filiz and
Smith's coffee shop can expand into is Germany. This is due to the reason that particular is
highly developed and greater scope can be seen in terms earning higher profitability within
Germany can viewed. Also there is presence of several suppliers of coffee beans within Germany
who can offer higher quality raw material to the company. Thus such would assist the coffee
shop in making delivery of the superior quality products to the target market. In addition to this it
has been gained that also here the people possess higher needs towards gaining quality products
and there is little role played by price in case of Germany (“Hamzah and Sutanto, 2016”). Thus
in order to comply with the needs and expectations of the target market the coffee shop would
offers the customers with higher quality coffee and would also offer additional services in order
to satisfy the needs of the customers in Germany to a greater extent. There is greater demand for
organic fresh coffee within Germany that can be seen to perform healthily. The disposable
income of the people in Germany is high. Thus there is huge demand for such products to a
greater extent. Furthermore they have greater income that can be spend on everyday products in
an effective manner.
Filiz and Smith's coffee shop has greater ethos in promotion of trade in fair manner.
There is presence of various ethical and structural considerations that needs to be kept in mind by
the company. This is in relation with adoption of the fair trade policy that helps in development
of trust among the customers to a greater extent (“Auboin and Blengini, 2014”). Further the
factors such as staff welfare would be taken into account in order to expand the coffee shop in
Germany. Thus in order to make sure such staff will be provided with highest standard training
and also are provided with opportunities related with development that are beyond their
competitors (“Gordon, 2012”). Ethical consideration in terms of equality to the staff members
would also be ensured to a greater extent. It is being assessed that there is greater need of the
customers in Germany regarding specialty coffee. Thus unique flavors coffee needs to be
provided so as to offer satisfaction to the target market (“Duca, Muellbauer and Murphy, 2016”).
The structure consideration have also been taken into account so that customer can accept the
products and services offered by coffee shop in an effective manner.
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2. Marketing mix in relation to coffee shop expansion plan
The marketing mix is referred to as set of actions or tactics that is being used by the
organization towards promotion of its brand or the product within the market. The 4 P's are
involved in making up typical marketing mix which includes product, price, place as well as
promotion. The marketing mix with respect to coffee shop expansion plan in Germany has been
enumerated in the manner stated as under: Product: It includes the items that actually is required to be sold. It is significant that
product needs to make delivery of minimum level of performance so as to satisfy the
customers needs as well as expectations (“Menegaki, 2012”). In accordance with the
present case study the product is coffee. It is being assessed that customers in Germany
have need for coffee of different flavors. Thus in order to comply with such need the
coffee with varied flavors would be offered as such would best fit to the requirements of
target market. Place: It is referred to as the point of sale. The coffee shop expansion plan would be
towards opening the outlet in Germany. Further Berlin in considered as the prime
location for the sale of coffee within Germany. This is because it is the capital which has
potential to attract mass market (“Jachnik and Raynaud, 2015”). Price: This is referred to as the value that can be put for a particular product. This is
majorly depends on the cost of production, segment targeted as well as ability of the
market to pay. This has been examined that price of the coffee would be set higher as the
outlet would make use of supreme quality of coffee beans. Along with this the people in
Germany have higher disposable income thus they have greater amount that can be paid
towards everyday products (“Aghdam, Saeidi and Marjani, 2015”). Thus higher prices for
the products can be charged as the market has greater potential.
 Promotion: This is regarded as the actions that are undertaken in order to make product
and service known to the users. The new coffee shop can be promoted by the means of
social media marketing as it is cost effective and is able to attract larger customer base.
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3. Implications of the need for Filiz and Smith's to cover wider geographical area
There is presence of greater implications of the need for the Filiz and Smith's to cover
wider geographical area. This presents various issues that would be faced by the company. Such
have been enumerated in the manner stated as under: Personnel and managing staff issues: As the coffee shop would be opened in Germany
thus the recruitment of the personnel would be done from the particular location. In this
regard the management of the staff becomes an issues. This is because they need to be
offered with the training so that they get well acquainted with the procedure that is being
followed at Filiz and Smith's coffee shop (“Embrechts, Klüppelberg and Mikosch,
2013”). Thus this results in increasing greater difficulty for the company. Along with this
in case the company transfers some of its staff to Germany then in this situation barrier
relating to language and culture would occur as there is lack of proper understanding
among them. This can affect the work to some extent. It has been assessed that personnel
issues can occur when there is differences among the people also this influence the level
of coordination.
 Supply chain: Such plays a crucial role in terms that in order to carry out the business the
need for supply chain is significant. It is significant for Filiz and Smith's coffee shop to
attain knowledge regarding the presence of suitable suppliers in Germany. In addition to
this there is greater need to assess the price at which they would make sales of the raw
material (“Minsky, 2015”). The major issue is being faced in determining the suppliers
who can offer quality raw material that can assist Filiz and Smith's coffee shop in
maintaining the standard in an effective manner. The role of supply chain is significant in
assessing the kind of product that can be sold by the organization (“Gitman and Zutter,
2012”). The selection of the supplier is required to be made by taking into consideration
several factors. This is comprised ethical factors as this has impact on the long term
relationship among the firm as well as suppliers. This would enable in carrying out the
production process in an effective manner. The distribution would be done by the means
of opening outlet but it is not feasible for customers at varied location to the reach at
particular location within Germany. This can result in creating a major issue for Filiz and
Smith's coffee shop expansion plan.
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4. Evaluating profitability and liquidity
The calculation of the profitability as well as liquidity ratio has been presented in the
table enumerated in the manner as under:
Ratios Formula 2015 (£)
Profitability ratios
Gross profit 208000
Net profit 26800
Net Sales 360000
Gross Profit Ratio (Gross Profit/ Net Sales) *100 57.78%
Net Profit Ratio (Net Profit/ Net Sales) *100 7.4%
From the above table the profitability position of the Filiz and Smith's coffee shop has
been assessed. The gross profit ratio of firm in the year 2015 was 57.78%. In addition to this the
net profit ratio of the firm is 7.4%. This presents that financial position of the coffee shop. The
gross profit margin is regarded as the profitability ratio that makes calculation of the percentage
of sales which is exceeding the cost of goods sold. It is being determined that profitability of the
company is sound. However the expenses made by the coffee shop are greater which is
decreasing its profitability position to a greater extent.
5. Overall viability of the overseas expansion
It can be concluded from the study that overall viability of the overseas expansion plan
can be considered effective as the profitability position of the coffee shop is sound. Thus the
company can make expansion to a greater extent. Along with this it has been gained that
Germany has greater potential in increasing the profitability of the firm. This is because the
people residing there have greater disposable income that can be spent on everyday products.
Thus expansion in such market can act as an aid in increasing the productivity of the business to
a greater extent. The decision regarding marketing mix plays significant role towards attainment
of the business targets in an effective manner within specified duration of time.
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REFERENCES
Journals and Books
Aghdam, P.F., Saeidi, S.S. and Marjani, A.B., 2015. Investigating the effect of service marketing
mix on increasing the sales in Special Cooperative Company of Iran Khodro. Journal of
Current Research in Science. 3(3). p.47.
Auboin, M. and Blengini, I., 2014. The impact of Basel III on trade finance: The potential
unintended consequences of the leverage ratio.
Duca, J.V., Muellbauer, J. and Murphy, A., 2016. Homeownership and The American Dream
How Mortgage Finance Reform Could Affect Housing. The American Economic Review.
106(5). pp.620-624.
Embrechts, P., Klüppelberg, C. and Mikosch, T., 2013. Modelling extremal events: for insurance
and finance (Vol. 33). Springer Science & Business Media.
Gitman, L.J. and Zutter, C.J., 2012. Principles of managerial finance. Prentice Hall.
Gordon, R., 2012. Re-thinking and re-tooling the social marketing mix.Australasian Marketing
Journal (AMJ). 20(2). pp.122-126.
Hamzah, S.B. and Sutanto, J.E., 2016. The Role of Marketing Mix (7P) for Consumer Buying
Decision Pastry Cake in Malang City.
Jachnik, R. and Raynaud, V., 2015. Sector-level approach to estimating mobilised private
climate finance.
Menegaki, A.N., 2012. A social marketing mix for renewable energy in Europe based on
consumer stated preference surveys. Renewable Energy. 39(1). pp.30-39.
Minsky, H.P., 2015. Can" it" happen again?: essays on instability and finance. Routledge.
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