Marvin & Smith's Coffee Shop: Business Expansion Strategies Case Study

This case study analyzes the business expansion strategy of Marvin and Smith's coffee shop, focusing on its potential entry into the Netherlands. It begins with an introduction to business expansion and its importance, followed by an examination of the Netherlands as a suitable market, supported by a PEST analysis. The study then delves into the marketing mix (product, place, promotion, and price) and its role in the coffee shop's success. Key factors related to Human Resource Management (HRM) and marketing are also discussed, highlighting the importance of skilled employees, effective communication, and promotional strategies. The case study concludes by emphasizing the significance of these factors for the coffee shop's overall growth and profitability in the new market. Financial ratios and their influence on decisions are also mentioned. The study provides an overview of the coffee shop's expansion plans and the strategic considerations involved.

CASE STUDY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
QUESTION 1..................................................................................................................................3
Business Expansion.....................................................................................................................3
QUESTION 2..................................................................................................................................5
Marketing Mix.............................................................................................................................5
QUESTION 3..................................................................................................................................7
Key Factors..................................................................................................................................7
QUESTION 4..................................................................................................................................8
Financial Ratios Influence Decisions..........................................................................................8
QUESTION 5..................................................................................................................................9
Concluding Summary..................................................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business expansion process is very important to an organisation to gain large market
share in respective industry. Currently most businesses or companies taking various steps
towards more expand their existing business operation in different new market segment.
According to case study, Marvin and Smith’s coffee shop also want to expand their daily
operations in the new market segment. There are expansion various strategies are available to a
company which can support in boosting its expansion process. Business expansion is too
necessary task to a company because it gives opportunity to gain large customer base in any
sector or industry. This report discusses case study of Marvin and Smith’s coffee shop. Some
effective business strategies or tactics also have been mentioned in this report which will help to
this coffee shop for gaining huge profit in the market.
QUESTION 1
Business Expansion
Currently Marvin and Smith’s coffee has great opportunity to expand their coffee shop
operations in the Netherlands. This country is the most appropriate market place for this coffee
shop, because major external factors of this place will positively influence to the shop. Local
people of Netherlands like to buy coffee. They always give very high priority to coffee product
in food and beverage industry (Li, Cui and Lu, 2017). Currently there are very huge scope of
coffee café business in this country. Nowadays many coffee stores are successfully running their
business operation in this country. That’s why this coffee shop also has opportunity to expand
their business operations in this country to gain huge profit. There is PEST analysis has been
mentioned below which has showed favourableness of this Netherlands for Marvin and Smith’s
coffee cafe shop. This analysis shows some major external factors of this market place which
will positively influence coffee shop, when owners will expand their business operations in this
country. Some major factors of Netherlands have been discussed below;
Political Factors: Political factors will positively influence to Marvin and Smith’s coffee shop,
because this existing government of Netherlands is welcoming foreign businesses. According to
government, when any new business start in this country, then it can generate various job

opportunity to people, so new businesses helps to a country for decreasing its unemployment
ratio. Finance minister of country has said that, businesses are always giving great contribution
in the country’s GDP. That’s why when this coffee shop will expand their business operations in
this country, then it can achieve full political support (Fouskas and et.al., 2018). Government has
imposed very low rate of taxation on different businesses, so this is another positive factor to the
coffee shop.
Economic Factors: Economic factors will also positively affect to Marvin and Smith’s coffee
shop in this market place. Reason is, Netherlands is one of the richest countries in the world, so
most people in this country comes from high income groups. Local people can easily afford
products and services which this coffee shop has offered in market. That’s why shop has great
chance to increase its profit ratio by expanding their coffee business in this market segment.
Social Factors: Social factors are too favourable to coffee shop. Local people are really like to
drink coffee many times in a day. But coffee shop will need to provide them good quality coffee,
otherwise it will not gain effective results in this market segment. Reason is, local people always
give priority to quality of a product. They ready to pay any cost for buying quality products and
services. It this situation, top-level management of coffee shop should give first priority to
produce quality coffee to serve customers in this market place. On the other side, most people
always like to buy products and services from those brands which fulfil their CSR (Corporate
Social Responsibilities) on time. That’s why coffee shop need to fulfil its CSR also when it will
expand their business in this country.
Technological Factors: With the support of technological factors, coffee shop will increase its
all over performance in market (Beamish and Lupton, 2016). Currently many modern
technological machineries, gadgets and equipment are available in this country which can
support to coffee for boosting its performance it coffee café sector. There is digital marketing
tool also part of technological factors. In this case, these factors can easily contribute in this
coffee shop to earn huge profit in this market segment. Through digital marketing tool, shop will
able promote their products and services at the large scale in its initial stage in the Netherlands.
Justification

Marvin and Smith coffee shop should expand their business operations in the
Netherlands, because this country is too favourable for this coffee café business. Most factors of
this country will positively affect business environment of this shop. That’s why the management
of shop should expand their business operations in this country.
QUESTION 2
Marketing Mix
Marvin and Patty Smith café shop by focusing on building strong marketing mix factors
which will integrate innovative business standards and high quality maintenance standards can
implement qualitative aspects in their café (Li, Zhang and Shi, 2019). The marketing mix factors
enable us to understand how by providing high quality goods and services to all consumers they
can gain long term revenue targets and high profitability with longevity.
 Product: The café must introduce new innovative products and high quality standards while
serving coffee drinks and other beverages to customers, and highly focus in bringing latest
preferences for gaining high loyalty. Coffee products must be made with fresh ingredients and
the snacks offered at café should possess high variety standards which will help them be
relevant with the changing preferences of customers. Marvin and Patty Smith must focus on
bringing versatile in their portfolio of coffee products and services offered in café, they can use
the strategy of researching latest preferences and gathering analysis on all external forces
which can give competition to their brand. Product factor is highly important for integrating
innovation in café services as customers have varied preferences which gives tough
competition, as there are various companies and brands coming up with creative ideas and
products (Chhabra, 2020).
 Place: The café must be expanded into various areas of city for easy availability of customers
and also be vitally present on websites and internet services which will assist people as well as
management to access the product facilities expansion. Place factor is one of the most
important part of marketing mix which explains Marvin and Patty Smith, by opening their café
and expanding their business scale in all main parts of city which are locally nearby to large
young generation will captivate large market share. Places in which the café can go for
expansion must vary upon their potentiality to attract new customers based on populous areas,

this will leverage new market share and high profitability factors. Café can implement games,
novels and other facilities for people who come to experience quality time in café, leveraging
these innovative practices by price mix they can revolutalise their business arena.
 Promotion: The café by being active on all promotional chains through internet services and
networking websites will emphasis on various arenas through which café will be able to
promote its services. Marvin and Patty Smith must focus on promotional forces for gaining
large competitive edge where it can establish its legacy and attract new segments of customers,
which will be able to get acknowledge of the various varieties café offers (Pantano, Priporas
and Migliano, 2019). Promotion mix is an important element through which both owners will
determine various parameters of expansion in their café services, reach out to new customers
and enhance their productivity cycle. Promotion practices will determine various horizons of
business expansion into all diameters of market share through which it can enhance its online
availability and promote business activities into various regions.
 Price: The café pricing factor is another important determinant element of marketing mix
through which café will be able to construct their innovative pricing strategies and reach
expectations of customers. Pricing must be moderate in comparison with other bistros and
cafes operating nearby as consumers are likely to opt for cheaper price range products and café
beverages. Marvin and Patty Smith while formulating prices of their products and meals to
start their café and further expansion deskins must opt for affordable price range, so that as
new start-up it will enable new people to get attracted towards products. Price ratios can be
finalized by gathering data and information from all reliable sources through which strong
pricing can be finalized for reaching to customers’ expectations. A strong competitive price
element is highly successful in strong business revenue and expanding the café services to
varied regions of city and all over country.
These elements of marketing mix explain the various horizons which needs to be
implemented for reaching long term profits and higher revenue growth along with high end
consumers market share in industry. An innovative marketing mix not only enhances company
performance, it higher brand value and brings new segments of potential customers close to the
industry which will highly promote company goals (Venaik and Midgley,2019). Marvin and
Patty Smith by structuring productive marketing mix factors, inject creativity in business

models and functionally integrate strengths and large opportunities available in expansion of
café.
QUESTION 3
Key Factors
The management of Marvin and Smith’s coffee shop should consider many factors which
has related to HRM (Human Resource Management) and Marketing in its business expansion
process. HRM and marketing are too major functions of a business or company which gives
great contribution in all over growth of a business. Key factors of these two functions has been
discussed below which coffee shop should consider during enter the new market.
Human Resource Management (HRM)
The management of coffee shop need to properly conduct their HRM practices to gain
effective results in the new market. Through HRM practices, coffee shop will able to hire some
effective workforce in their daily operations. It needs to use some modern tactics and strategies
to run their human resource management operations in productive manner. many times many
companies or businesses to achieve effective employees in their operations due to poor HRM
practices (Kim, Lee and Kwon, 2017). That’s why this coffee should maintain productive
practices to gain positive response in new market segments.
The coffee shop should hire skilled and talented employees in their business expansion
process, because skilled employees always gives higher input into the operation in comparison of
unskilled employees. On the other hand, HR manager of coffee is responsible to increase
performance level of existing employees as well. That manager is able to provide some specific
training sessions to their employees. Through these sessions, employees will able to improve
their skills and workability.
It its hiring practices, coffee ship should give priority those candidates which has extra-
ordinary communication skills. Reason is, a coffee café business always comes under service
industry. According to many business experts, a business who offers different food and beverage
to products to customers is highly required workforce with effective communication skills,

because these employees always need to deal with many customers in a day. Effective
interaction is also required in an employee to interact with different customers (Ang, Benischke
and Hooi, 2018). That’s why coffee shop should consider these all HRM factors in their business
expansion process.
Marketing
Marketing function will play very major role to company in its business expansion
process. This function will give opportunity to coffee shop to promote their products and
services at the large scale. In its intimal stage of new market, existing management should boost
their marketing functions. It will able run various marketing campaigns also during expanding
their business operations in new market segment.
The management should properly supervise each activity of marketing. It will need to
give special instructions to their marketing manager to use modern marketing tactics or strategies
in their marketing functions to gain huge competitive advantages in new market segment.
Currently many business or companies are taking huge advantages from digital marketing as
well. In this situation, Marvin and Smith’s coffee shop should also use digital marketing tool to
gain attract lots of new customers towards brand.
The management of coffee shop need to consider these all factors in their business
expansion process (Lynch and Jin, 2016). It is necessary to company for gaining effective return
from the new market segment.
QUESTION 4
Financial Ratios Influence Decisions
According to financial statement of Marvin and Smith’s coffee shop, ending value of
assets and liabilities is excellent. This is good achievement for a newly started business. There
are profitability and liquidity ratios are completely influencing decisions of coffee shop.
According to income statement of coffees shop, it has earned £26800 net profit in financial year
of 2017. Currently money is inflowing in the coffee shop, in which it is excellent indication to
shop.

The profitability index of coffee shop is influencing to existing management for taking
some productive designs towards achieve more profit in the future. Current financial conditions
of coffee are affecting to top-level management of company for taking such decisions which will
boost its existing profit ratio in the next financial year. Currently management of coffee shop
need take decisions to prepare a specific plan for generating high profit in the new market
segment.
During business expansion process, management of coffee shop is required to more
develop their business tactics or techniques to gain very large customer base in the market
place.it is necessary to coffee shop to generate very high profit through expanding business
operations (Ferrigno, Peifer and Marshall, 2017). The management need to prepare a specific
plan towards achieving huge competitive advantage in new market segment. In initial stage of
coffee shop in new market, existing competitors will give very tough competition to this shop.
That’s why it is necessary to management of Marvin and Smith’s coffee café shop to take some
productive decisions for achieving effective results through expansion process.
QUESTION 5
Concluding Summary
Currently the Marvin and Smith’s coffee business has very great opportunity to expand
their operation in new market segments. Currently Netherlands is the most appropriate market
choice for this shop, because this market place has very favourable conditions. The shop will
achieve very high growth in this market segment. Top-level management of shop should use
various marketing strategies like; marketing mix. These strategies will support to shop for
promoting their products and services at the large scale.
Coffee has opportunity to increase profit ratio by expanding their business operations in
different new market segments. Existing coffee café businesses will give very tough competition
to Marvin and Smith’s coffee shop, in which management should develop some modern business
tactics to gain huge competitive advantage in new market place (Information Resources
Management Association ed., 2018). On the other side, shop should provide quality product and
services to customers, because most people always like to buy quality products and services.

Existing management should consider these all factors in their business expansion process to
gain very high profit.
CONCLUSION
It can be concluded that Marvin and Smith’s coffee need to develop and innovate some
modern business strategies to run their business expansion processes on progressive path. It
should use an effective workforce in their daily operations to achieve positive results from
different market segments
REFERENCES
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