Strategic Analysis: Hank and Patty's Coffee Shop Expansion in France

This report analyzes the potential for Hank and Patty's coffee shop to expand into the French market. It begins by justifying the selection of France as the target market, citing cultural preferences for coffee consumption and the potential for fair-trade practices. The report then details a proposed marketing mix, including product, price, place, and promotion strategies tailored for the French market. It also examines the implications of this expansion, focusing on organizational culture, competitive advantage, and financial aspects. The analysis includes profitability and liquidity ratios to assess the financial viability of the expansion, providing a comprehensive overview of the challenges and opportunities associated with entering the French market. The report suggests that the business is in a good position to expand based on the financial analysis provided.

ASSINGMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1: Selection of appropriate place for opening of new coffee shop in France..............................1
2: Marketing mix related with their coffee-outlet.......................................................................2
3: Implication that are being deal with Hank and Patty..............................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Business is a effective measure which is uses as primary tools for an organisation to trade
their products and services to various customers. It is one of the crucial elements of modern era
in which there is consistency among every day manufacturing of products as per the need and
demand of customers. Through this, company would be able to increase their business in every
part of their nation. As mentioned in the case of Hank and Patty that they wants to expand their
business at other places. They are mostly looking for European nation to enhance their customers
base through offering appropriate quality of coffees to them. The project aims to make proper
analysis about strategies to be implemented for the purpose of expanding their business. France
is being selected as the suggested international market for both the persons coffee shops.
Henceforth, the available market potential and suitable strategies for an organisation in the target
market would be analyse under this particular report (Anderson, Sweeney and Williams, 2011).
TASK 1
1: Selection of appropriate place for opening of new coffee shop in France
According to provided case about Hank and patty those are operating together for
increasing their business operation in so many year which is dealing in food and catering sectors.
However, they want to select more appropriate option to run their business in large scale for this
purpose they are searching for the market place which would provide more effective chances for
increasing their overall performance during the time. It is necessary aspects which is having
massive growth within very limited period of time to determine, unique theme, customers
services and other facilities to focus on fair-trade in case of Hank and Patty coffee-outlet. This
must be stand out for all competitors those are present in UK market. The enhancement of
consumer preferences of both the parties and their positive impression on global visitors in the
UK indicate potential aspects of an organisation to attain better outcomes in near future. They
have invested a total of 12 month for searching and making vital planning regarding their coffee-
outlet (Bradford, 2015).
In accordance to this, so many crucial steps are also being taken such as capital
investment, location, target market and vital suppliers and competitors for their products.
Opening of new coffee shop in the France is more vital decision-making which will be more
gainful for Hank and Patty. This would be happens to be primary motive of them to enhance
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maximum attention of customers at large scale. This has been done because plenty of visitors are
visiting to the nation for the purpose of roaming around. They need to search regarding all those
factors those are affecting the productivity as well as growth for the company. The EU nation
which is been suggested for global expansion for Hank and Patty is France and there are different
valid reason for this type of decision. The lifestyle and culture of France people are main aspects
for recommending this particular nation as the most effective potential market place for both of
them (Burke and Friedman, 2011).
According to their tradition, French people prefers to spend their leisure time in afternoon
with having coffees with popular snacks and friends. As per this, their continuous consumption
rate is much higher with 150 litres as compare to wine and other kind of drinks. Fair trade is
highly precedence in almost every product those are related with the France due to their choice
and demand of domestic customers. The coffee warehouse within the country are have to attain
over their domestic currencies. However, huge investment would be made for fair trading of
coffee which is having plenty of chances to increase the sell of coffee businesses within that
particular nations. It is necessary to gain customers loyalty which would be primary aims of the
company by maintaining more effective relation with them. The billing of invoices and crucial
payments are said to be more appropriate so that chance of mistakes can be controlled during the
time. It is required to make proper dealing with as compare to face competition and to make
innovative ideas to make use of their products and services which will be helpful in providing
more effective quality to them (Cavusgil, Rammal and Freeman, 2011).
2: Marketing mix related with their coffee-outlet
It has been observed that, both Hank and patty need to search their business growth
opportunities by making appropriate market research. As according to the mentioned information
they are looking of 12 month for a effective place that can be more suitable for them to open
their business in near future. They are having valuable amount of information regarding every
market situation which will be related with setting up of their own business. The selection of
France is an utmost import potential decision for Marvin and Smith coffee shop has justified in
the above segments of the report. Thus, this particular section of report has been utilised to
formulate a suitable marketing mix planning for an organisation to follow for expanding in their
suggested new market.
4Ps of Marketing mix
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Strategies suggested for Hank and patty for their coffee-outlet
Product The most important part of coffee served in Hank and patty shop is their
appropriate quality because of the use of best quality beans of Gumutindo
coffee. Thus, the cafe is suggested for retaining their culture to purchase these
coffee for serving their customers with wide and quality of coffees. The
innovation in products would be made in France which is based on hank and
patty coffee shops with offering snacks.
Price They are having only Four coffee-outlet all are situated in London which is
having certain limits regarding their brand recognition in global market.
Henceforth, there are different old age coffee shop that are consider to be
primary competitors of them. In accordance with competitive pricing policy
they need to be more effective planning for an organisation to gain initial
standard cup of coffees price is £ 1.40.
Place The chosen market destination from Hank and Patty coffee shop in France.
There are various reason for selecting this particular city as the market place
for the organization are discuss underneath:
The oldest cake market within the nation is having large number of
opportunities for the cafe to implement most preferred types of flavour cake
in the menu.
High visitors those are collected during normal day time.
Basic popularity is one of the most popular tourist destination within the
nation.
Promotion According to Hank and patty, as they are going to open their first coffee-
outlet in France. Thus, the organisation require effective target on their
techniques of promoting their business. There are various sources such as
Television, social media and hoarding would be most suitable promotion
sources for Hank and patty. The organisation should also present image of fair
trading efforts and effective consumer facilities.
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3: Implication that are being deal with Hank and Patty
There are various implications that are needed to be faced by Marvin and smith coffee
shops to cover wide geographical areas for their operations that consists in UK and France are
mentioned underneath:
Organisational culture: This particular impacts Hank and patty coffee-outlet in unique
as the organisation is mostly being focused on various factors such as fair-trade, customer
conveniences and France theme. Non-discriminating work environment and common respect of
every customers is one of the primary vision of Marvin and Smith coffee shop. The shared value
is playing an eminent role in formulating valuable factors those are related with an individual
and team member to offer best quality of products to their customers (Guffey, and Loewy,
2012). It is an innovative impacts through using predominant culture of an organization. This has
been related with certain aspects for making changes for an organisation to develop an effective
business environment that is being faced by both Hank and Patty in their specific business which
is operating in France.
The culture which is present in France is different from the UK. This will makes the task
of expansion of their business operations by Marvin and Smith's of their coffee shop in France is
more tougher. It is difficult for them to work in new country with same organisational structure
which reduces their capacity about attraction of the large number of customers through
providence of effective business operations in more appropriate manner. It is noticed that
optimum support of staff is not ensured regarding the activities of Marvin and Smith which
impacts their ability regarding fair trading of their business operations. Hence, it is the duty of
the management is to effectively manage organisational culture in France which contributes in
effective providence of business functions at different regions.
Gaining competitive advantage: Another major implication which is faced by Marvin
and Smith's coffee shop in context of their expansion in France is that they are not able to take
the gaining competitive advantage because of large number of competitors are present in France.
There are many old cafes and present in market which are popular and already attain the trust
and loyalty of customers. Still there are many significant chances for Marvin and Smiths is to
compete in market because they use finest Gumutindo coffee beans. The old cafes which are
working in France knows the taste of customers and have the large experience in making of
tastiest cakes as per their preferences. In this regard, management of Marvin and Smith's cafe
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need to adopt innovative techniques and popular approaches which helps to grab the attention of
customer through providence of their diversifies products. Adoption of affordable pricing policy
and providence of beneficial offers works as the positive side for Marvin and Smith's cafe in
attraction of new customers and ascertain their trust towards their services.
4. Analysis of the impact of profitability and liquidity on decisions in Marvin and Smith's coffee
shop
Funds plays an important role for accomplishment of the business objectives. The main
objective of Marvin and Smith's coffee shop is to expand their business operations in new
country in which they required huge amount of funds as investment. To ascertain the financial
position of cafe need to analyse their past year financial data. In this regard, need to calculate
their profitability and liquidity ratio for ascertaining their impact on the decision regarding
expansion of their business in France (Lamb, Hair and McDaniel, 2011).
Analysis of profitability ratio
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%
Gross profit: It is important ratio which helps in ascertaining the profitability which is
associated with business project. This can be calculated by dividing the gross earning of
organisation with total number of sales. Through evaluation of this ratio, financial strength of
organisation is ascertained. In 2016, Marvin and Smith's has gross profit margin is 57.78%. It
shows that sufficient amount of funds are present with the management of cafe to expand their
operations in France.
Net profit: The net profit ratio is calculated after dividing the net earning of organisation
with the total number of sales amount. It helps in calculation of actual earnings from their
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business operations. In the end of 2016, the net profit ratio of Marvin and Smiths coffee shop is
7.44%. It shows that the performance of cafe is good in UK and earning sufficient amount of
funds.
ROCE: It is known as return on capital employed. Through calculation of this ratio,
organisation is able to understand their capacity about attainment of return from their capital
investments. It is calculated by dividing the net operating profit through subtraction of the
amount of current liabilities from its total asset value. In 2016, it is observed that the ROCE
which is attained by organisation is 25.09%. This shows that cafe is attaining positive return
prom their capital investments (Patten and Newhart, 2017).
Analysis of liquidity ratios
Liquidity ratio:
Current ratio Current assets / Current liabilities 35400/6200= 5.7
Liquid ratio Liquid assets / Current liabilities 35400-8000/6200=4.4
Current ratio: The current ratio which is ascertained by organisation through dividing
their current assets amount value by the amount of current liabilities. In 2016, the current ratio
which is ascertained by Marvin and Smith's was 5.71. It shows that large number of assets are
available in present with cafe for expansion of their business operations in France. This will
helps the organisation is to grab the large number of opportunities in more appropriate manner
(Sundareswaran, 2011).
Acid test ratio: This ratio is calculated by dividing the amount of liquid assets from the
amount of current liabilities. For ascertaining liquid assets need to subtract the amount of
inventory from current assets. It shows about the long term assets which are available with the
organisation after elimination of inventories. In 2016, Marvin and Smith's quick ratio was 4.42.
It shows that large number of long term assets are present which can be used in international
expansion (Tyson, 2014.).
CONCLUDING SUMMARY
As per above analysis of report, it is resulted that the France has become more
approachable potential and first international market place to be targeted by Marvin and Smith's
coffee shop. Populated and famous country is opted to open new coffee shop in France. There
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are some major reasons are defined in this context which were associated with opening the
branch in France. First of all the destination and location are analysed in respect of attain
customer interest. This will not only help to boost the economic structure of organisation but also
helps to provide employment to the people of France. There are some essential elements are
considered in before setting up the plan of coffee like norms, legislations, policies and legal
structure of France. Customer interest and preferences are also some major aspect which are
important for the growth of coffee shop.
Better convenience facility and approachability is also one of the essential aspect which
is required to analyse future growth and development of coffee shop. Marvin coffee shop is one
of the popular brand in US and managers are trying to expand the scope in France. Performance
of organisation is also observed in terms of financial and profitability terms. Variety of foods and
products are defined in this context. Sweet cakes, chocolates and different type of beverages are
speciality of Marvin Coffee shop. Competitive pricing, integrated promotional strategies and the
effective marketing plans are some essential aspects which are considered in before setting up
new coffee shop chain in France. Market position and positive aspects are considered in this
context which need to analyse. Trend and culture of public of France in terms of analysing the
interest of customer also done in this context. Profitability and liquidity of organisation is also
analysed in subject to support decision making and strategic planning process. International
business market is analysed in terms of expanding the business in France. Entire report will help
managers of Marvin coffee shop to expand the business in France.
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REFERENCES
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Jones & Bartlett Learning.
Cavusgil, S. T., Rammal, H. and Freeman, S., 2011. International business: The new realities.
Pearson Higher Education AU.
Guffey, M. E. and Loewy, D., 2012. Essentials of business communication. Cengage Learning.
Hair, J. F., 2015. Essentials of business research methods. ME Sharpe.
Lamb, C. W., Hair, J. F. and McDaniel, C., 2011. Essentials of marketing. Cengage Learning.
Patten, M. L. and Newhart, M., 2017. Understanding research methods: An overview of the
essentials. Taylor & Francis.
Sundareswaran, S. D., 2011. Essentials of Managing Stress in the Era of Globalization-An
Organizational Perspective. Journal of Contemporary Research in Management. 6(3).
p.67.
Tyson, S., 2014. Essentials of human resource management. Routledge.
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