Business Essentials: Case Study on Coffee Shop Expansion in Finland

This case study examines the expansion of Marvin and Smith's coffee shop into Finland, analyzing the rationale behind the location choice, focusing on Finland's coffee culture and market potential. It details the marketing mix strategies employed, including product, price, place, and promotion, and addresses organizational culture and staff-related issues such as diversity and conflict. The study evaluates the impact of profitability and liquidity ratios on the company's decision-making process, providing financial metrics like gross profit ratio, net profit ratio, current ratio, and quick ratio to assess the financial health and expansion feasibility. The analysis highlights how these financial indicators influence the company's ability to meet its objectives and manage its liabilities effectively. The study concludes with recommendations based on the financial analysis and operational challenges faced by the coffee shop.

Business Essentials Advanced-
Case Study

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1. Expansion of Marvin and Smith's coffee shop in Finland..................................................1
2 marketing mix for coffee shop............................................................................................2
3. Issues faced by coffee shop ...............................................................................................3
4 Evaluate how profitability and liquidity may impact on decisions available to company..5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
The profitability and liquidity position of the company is required to stable so that it can
improvement can be done so that it can measure its financial stability in market. The firm is
required that profitability and liquidity ratio can be adequate so that it may pay off its liabilities i
effectual manner. The organisation's profitability ratio measures and assess its ability to generate
the earnings after analysing costs and other expenses. The report deals with an organisation which
is expanding its location to Finland so that it may earn sufficient profits and can accomplish its set
objectives in effectual manner.
TASK 1
1. Expansion of Marvin and Smith's coffee shop in Finland
Reasons for selecting Finland for expansion:
Coffee
Café culture:
Eco.prosperity
Lifestyle
Other resons:
In this research decided Finland country because in this country most drink coffee.
In this country largest quantity of coffee bean is consumed.
Illustration 1: Coffee consumption in Finland

It is basically use for the education, health care increasing income in the organization. The
premium can also b used for the development of producer paying certification in the organization
this through increase fund quality and quantity. Social or ethical label in Finland not care about the
raw material they also care about the society and allocated location. In this city every farmer work
on behalf of three own locations and responsibility. When a person care about the well beings
other individual or a fair allocation member in society in addition to their own material benefits. It
has been estimated that about 78%trade certificate coffee comes from the Latin. The retail of fair
trade of coffee has the strict stand. From the producer point of view point make no differences how
large share of the retail price they revive. It business develop in the Finland then they want to taker
licences from this country in Finland 1-3% of the trade retail price is licensees fee. Finland is the
traditional coffee country consumption is reached to target point. Currently some reasons c
changes in this sector demand is increasing but product price is decrease. It is extended to which
fair trade and regularly coffee are makes substitute are deepened on taste and quality. In this serve
found 74.8% of the purchases of fair trade coffee argue that their decision is influenced by the
wish to support the product(roh, M. and et.al. 2015.). So the research report is chosen of Finland
company in this country increase the profitability and decrease in import export price(Swenty and
Titzer et.al. 2014). In this country coffee business is going on gross profit.
2 marketing mix for coffee shop
It is providing help to taking decision related to product, price, place, promotion of product
and services. We can use the coffee house expansion in abroad-
Product - In this Hank Marvin and Patty Smith show they providingt different services give the
service detail and introduce to customer they give detail of product like coffee types cold
coffee, hot coffee, snacks and tea, tapestries and cold drinks they also show how to different
there product6 from other . They use coffee beans organics and high qualities' tea herbal
infusions related they use best beans and make the best coffee and tea. These are
specialization in that coffee shop because beans are born in own field so they are safe for the
customer. They provided also extra services like socket of charger for phones and laptop, free
wife facilitates and they also night them provided board game and chat with Nana.
Price - In this they decided cost of product and services(Sungur, C.T., Binz, T., Breitenbücher, U.
and et.al. 2014, ). It is followed they value based pricing system because this coffee shop can

charge more for organic fairly sources use. It is so attractive part of coffee shop Because this
company also provided extra facilities like night them and board game chat with Nana. Their
competitor not provided these type of extra services so such as attractive for customer and
customer is also ready to pay extra charge they also take extra services. In this give detail of
product and services prices like one by one free and cost of coffee.
Place - These services need in the East Africa because evening them coffee shop attract to
international tourist. They also cover all Landon with help of information system stretcher.
They expand her business in European union country. They also open one shop there. It shop
choose cold place because hot coffee give the hotness from customer so they need it.
Packaging – In this step coffee house also provided row materiel like coffee powder , row beans
etc. there packing from different side they help to attract customer. . On packet of coffee
written packaging date, experience date best use date logo of shop all thing given coffee serve
then make attractive with taste and in services.
Positioning – Coffee shop will easily set they mind of customer because it id unquiet in taste it
uses the organic bean and provided services through the experience staff and they use night
them. This quality give the difference from others because their competitor does not use it.
They use different type packing rate and give extra facilitates these help to maintain there
positing.
Promotion – They use for promotion extra facilitates to customer like short of charging for laptop
and computer and Wi-Fi facilitates they also us for the night them board game, chat with
Nana. They promote there business and product or services through television , social media
and website, newspaper. New coffee shop. they do advertising on the news paper ,television,
providing some extra then customer promote there product.
Process- They use best staff for they facilities of customers beyond competitor. They use
experience staff so customer is satisfied for the services. There coffee making process will be
different an\d there serving style so different from other product. They use different type of
coffee-cup so it make attractive from other shop .

3. Issues faced by coffee shop
Organization culture -Every business man having different type of organization culture in
this coffee shop having open minded culture because they also take succession with employee and
customer through coffee shop feedback. They for the customer. They believe on organs and herbal.
Thy want to give v best services. They believe on society well fair that's why they purchase direct
product from farmer because farmer earn some money. They follow all type of rule for their
government. They use for customer relaxing and according to customer facilitates environment.
They also give to staff highest standers facilitates, increasing in wages and give development
opportunities(Zaccagnini and et.al., 2015. ).
There people staff use helping nature give the help customer to enjoy in there shop. They
use open minded strategy. This coffee show us the equally police. It gives they opurenite to all
country who wants to work in this company. Local coffee shop only provided coffee these
provided customer facilitates to coffee snake and tea, cold drink etc. this coffee shop all type of
employee in staff but they are having experience in this field and they having helping nature. This
is also related to organization culture to personal sand management staff because in staff having
some conflict like diversity conflict because employee are coming from different area. They
having different culture and thinking matching in both thinking and environment taking
time(Bradford, M. 2015.). So organization and employee staff managing also interrelated to each
other. Organization gives the familiar and equally police use then employ and staff do work
without any conflict.
Personal and managing staff issue- Every international company and organization having this
issue. Because company and organization use the equally policy and give the chance of every
countries people. They are belonged to different culture so they having different type of living
stared, way of talking, all type of different. So they having some issue related to each other.
Organization culture and staff issues is related to each other. Conflict are also having in
management and employee or co worker. In this type of conflict manger gives they equal work
environment and optimal relationship with each other(Arts, F., 2016). They also having poor
communication problem. Every employee come in different areas so they don't know to employee
each other and languages so this type of problem also facing in management. In this type they
having understating like manger give they guideline to they employee but employee don't know

language then they can't understand to each other. In this condition employee give the blame to
each other. They also having personnel issues to each other(Arts, F. 2016). They having
competition to each other normal competition is good for each other but high competition is not
good to coffee shop. In diversity conflict people come tin different countries then they having
different type of personality then tone having reserve personalty but other having other personality
then don't talk to each other than conflict and problem were increase. These type of personal and
managing staff issues come. These are organization culture to related because organization
forgiving friendly environment then staff are enjoying the work but employee are not talk to each
other than they having conflict. In these type of condition they having problem talking decision
some time result will come unrecoverable for coffee shop or staff. So conflict resolution are very
important to they both organizations and staff management.
4 Evaluate how profitability and liquidity may impact on decisions available to company
1. Profitability ratio-
Profitability Ratio Formula Outcome
Gross profit 2,08,000
Net profit 26800
Net Sales 3,60,000
Gross profit ratio GP/ net sales * 100 57.78%
Net profit ratio Net profit / net sales * 100 7.44%
Net profit 26800

Capital employed (total
assets – current liabilities)
106800 (113000 -
6200)
Return on capital
employed (ROCE) Net profit / Capital employed * 100 25.09%
As per the profitability ratio, it can be said that organisation can expand its shop in Finland
so that it may fulfil its objectives and goals in effectual manner. The gross profit ratio is 57.78 %
which is quite good for the company (Hair, 2015). They can expand its reach to other location as
well. The profitability ratio are the financial metrics that are used to assess and evaluate firm's
ability to generate earnings in comparison to its expenses and other costs incurred during particular
period. Profitability ratio is must for firm to expand its reach and to keep an eye on the costs and
expenses so that it may not waste the valuable resources in unprofitable activities. Higher the
profitability ratio, better for company (Wilson, 2014). It shows that company is earning well and
has a good profit for its further operations. It shows that firm is accomplishing its set targets in
effectual manner.
2. Liquidity ratio
Liquidity Ratio Formula Outcome
Current assets 35400
Current liabilities 6200
Inventory 8000
Prepaid expenses 0
Current ratio (CR) Current assets / current liabilities 5.71:1

Quick ratio (QR)
Current assets – (stock + prepaid expenses) /
current liabilities
4.42:1
Liquidity ratio shows the liquid position of company whether it is able to pay its
obligations and liabilities or not. It measures margin of safety by calculating quick ratio, current
ratio in the manner which shows liquidity position of firm in effective way (Grebenc, 2014).
Liquidity ratio is divided into current ratio and quick ratio. Current ratio measures the
company's ability to pay short term obligations. It considers current assets and current liabilities.
The current ratio gives company an idea of its financial position. Formula:
Current Ratio = Current Assets / Current Liabilities. The ideal ratio current ratio is 2:1. It can be
shown as per the table that current ratio of company is 5.7:1 which is very remarkable as it is
having high current ratio and which means that it is in the position to pay off its liabilities in
effectual manner.
Liquid ratio or acid test ratio or quick ratio measures company's liability to pay extremely
short term obligations with its most liquid assets. It shows that how efficient is company to pay its
liabilities with liquid assets excluding stock. Stock and prepaid expenses are never recorded in
liquid assets (AdvZietsma,Greenwood and et.al. 2014.). It can be summarised from above table
that organisation has 4.42:1 quick ratio which more. It cannot pay its obligations and liabilities
within the liquid assets. It is required that firm should manage to improve the liquidity position
else it will be unable to pay its liabilities. The ideal quick ratio is 1:1. As such, company should
improve upon its liquidity position so that it can expand its reach to other locations in effective
manner.
CONCLUSION
Hereby it can be concluded that organisation liquidity position should be much wider and
strengthen so that it can attain its goals and objectives in effectual manner. By having good
liquidity position, it can improve upon its ability to pay its liabilities and obligations in effective
way. This makes organisation sound enough as it is able to pay of its liabilities in efficient way.
The organisation should also strengthen its profitability ratio as it is required for maintaining its

financial position in effective way. Profitability ratio measures organisation ability to generate its
revenue by analysing the expenses and other costs. These costs must be covered in the revenue so
that firm can ensure healthy profitability position.
The information system should be well established by the company. Information system
aims to integrate by processing the data from company inputs to generate information that is useful
for managing the operations of the company in effective manner. Organisation culture should be
well established so that employees can work together to accomplish the set targets of firm in
effective manner. It is required by company that organisation culture is effectively managed in the
organisation so that employees' productivity can be maximised to full extent which will produce
effective results to company in widening the sales volume and output. As such, revenue will be
generated by company which ultimately achieves its goals in effective manner. It can be
summarised that profitability and liquidity position of the company is essentially needed to pay off
its liabilities in effective manner. The liquidity position of company is required so that it can pay
off its liabilities in effectual manner. The organisation is required to strengthen its liquidity
position so that it may attain its objectives and goals in effectual manner.
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