Business Essentials: Marvin & Smith Coffee Shop Expansion in Ireland

This report provides a comprehensive analysis of a coffee shop's expansion plan, focusing on its entry into the Irish market. It begins by justifying the selection of Ireland as a suitable location, considering economic factors and the existing coffee culture. The report then details the marketing mix (7Ps) tailored for the coffee shop's expansion, including product, price, place, promotion, people, process, and physical presence. Furthermore, it explores the implications of expanding into a wider geographical area in Ireland, emphasizing the importance of gaining a competitive advantage and managing the supply chain effectively. The financial information, including profitability and liquidity, is evaluated based on a structured income statement. Finally, the report briefly considers the viability of overseas expansion. The analysis provides insights into the strategic considerations and operational challenges associated with the coffee shop's growth in Ireland.

BUSINESS ESSENTIALS
COFFEE SHOP

Business Essentials
Table of Contents
Introduction...................................................................................................................... 3
1. Justification accounted for the selection of country suitable for the expansion of
coffee shop by Marvin and Smith.....................................................................................3
2. Marketing Mix for the coffee shop expansion plan.......................................................4
3. Implications required by Marvin and Smith for a wider geographical area in Ireland. . .6
4. Financial information evaluated in context of profitability and liquidity for coffee shop 8
5. Viability of coffee shop expansion overseas..............................................................11
Conclusion..................................................................................................................... 11
References.....................................................................................................................12
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Introduction
The expansion of an existing organisation at an international market depends on the
demand and supply specifications appreciated by their target markets. In the following
assignment, information collected shed lights upon the two business partners Marvin
and Smith that worked for years in catering and food industry. These partners further
wished to open their own coffee shop in a European Union country marked as Ireland.
Moreover, the evaluation of marketing mix for the expansion of coffee shop has been
made along with the implications required with respect to the wider geographical area.
The assignment further accounts for the profitability and liquidity of the coffee shop as
prepared by Marvin and Smith for their future expansion.
1. Justification accounted for the selection of country suitable for the expansion
of coffee shop by Marvin and Smith
The two partners Marvin and Smith selected Ireland for their further opening and
expansion of coffee shop. There are different valid reasons for the business partners to
agree for the opening of their coffee shop in Ireland. As indicated by Einwiller and Weitzl
(2016), there lies a saying as ‘the luck of the Irish refers to an ability to prosper against
adversity’. In addition to it, the economic perspective of Ireland avoids tribulation in
recent times and further continues to prosper. However, in order to know the new
market of Ireland the two partners must analyse the relevance of their existing Irish
markets and its characteristics. As for instance, there were Seamus Healey, U2,
Riverdance and St Patrick's Day to be considered as the testament to the cultural power
and Irish pub of Ireland. These further symbolises the hospitality and warmth of the
country across the globe.
As commented by Jaggia et al. (2016), Ireland has been marked as UK's largest export
market for the food and drinks products. Thus from the perspective of opening new
coffee shop in Ireland can prove to be an excellent decision made by Marvin and Smith.
Moreover, the coffee culture prevailing in Ireland is remarkable for the new business
entry in this industry. In addition to the discussion, Ireland as a country is reputedly
known as a tea-drinking nation as the Irish people consume both in retail and
foodservice sectors. Irish people are increasingly inquisitive in nature when it comes to
coffee, as they are keen to experiment new bean types flavours and the brewing
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techniques. Therefore, in order to open new coffee shop, Marvin and Smith as a
business partners must consider the legal approach of their coffee shop to enter in the
new market of Irish people. The ethical consideration required for entering the new
market deals with the Fairtrade adaption, the staff welfare are marked for the legal
assurance to be possessed by such new businesses (Sardana 2016). Marvin and Smith
imported coffee beans from Gumutindo Coffee in Uganda along with the high quality
tealeaves from the Fairtrade foundation registered under East Uganda. Thus, after
making such efforts, the locations thus selected for the opening of coffee shop in Ireland
should relates to the local market area, where common people can approach easily.
The layout marked for Marvin and Smith’s coffee shop tends to be a private one as the
business financial these two partners manage difficulties only. In addition to the
discussion, the supplier deliveries are planned to be conducted by the transportation
facilities such as shipping and local vans for carrying the raw materials to the coffee
shop. Therefore, from the above made discussion, it can further be analysed that the
selection of Ireland as a new target market for the opening of Coffee shop is a justified
decision made by the two business partners Marvin and Smith. Moreover, the urge for
new taste and innovative atmosphere is the key fact that must be adapted by the two
partners Marvin and Smith for making a successful opening of their coffee shop for the
Irish people.
2. Marketing Mix for the coffee shop expansion plan
In addition to the above made discussion, the need for evaluating the relevant aspect of
the coffee shop planned by Marvin and Smith must be made in respect to their
execution of new opening in Ireland. However, as suggested by Girgenti (2016), the
application f Marketing Mix tools is suitable for making aspects car and pre planning the
strategies for entering a new market. Thus, the following are efforts made for planning
the new business target and related activities for the coffee shop expansion through the
7Ps of Marketing Mix:
Marketing
Mix
Coffee shop of Marvin and Smith
Product The product served by the Marvin and Smith comprised of fine and
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Business Essentials
high quality of coffee beans and tealeaves. The coffee beans are
imported from Gumutindo in Uganda. However, the farmers are
always motivated so that the same high and fine quality for the coffee
beans can be generated.
Price All the purchase are made at an affordable cost by the partners, so
that Irish people do not get scope for complaining about the price
changed for the supplied food and beverages from the coffee shop.
That is a cup of cappuccino if costs for £6 in other coffee shops, the
coffee shop run by Marvin and Smith charge for £5 for attracting
customers for their initially business in order to make them the
potential customers of the outlet.
Place The market selected for the establishment of coffee shop is the
English Markets of Cork City in Ireland. Arvin and Smith have
analysed the English market of Cork City and thus gained information
of the offers and options that the tourist gain for shopping and thus
gains opportunity for opening their coffee shop there in the Cork City
(Ireland.com 2017). The English market lacks the presence of any
coffee shop and thus may gain popularity if established in Cork.
Promotion The fact of making local aware for the opening of a new coffee shop
within Ireland can be fulfilled by making effective promotions. Marvin
and Smith are required to promote their coffee shop with means of
billboards and pamphlets to get constructed with all the necessary
details for the venue, and opening date of the coffee shop.
People The people residing in the Cork City are well known for the Cork
Coffee Weekend as marked by a report for the year 2016. Thus, it can
be further analysed that the people of Cork city are more interested to
test new coffee shops and participate there for social events.
However, the target market set by Marvin and Smith must consider for
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homemakers and shopkeepers that visit the market for shopping.
Process As indicated by Edwards (2016), the process required for the
manufacturing and delivery of food and beverages of the coffee shop
deals with a strong procedure. That is, incorporation of transport
vehicles and shipping facilities must be marked for managing a
smooth flow business within the local markets of Ireland.
Physical
Presence
The physical presence marks for the coffee shop run by Marvin and
Smith deals with the places that are most frequently visited by people
residing in Cork City.
Table 1: 7Ps of Marketing Mix for Cork City (Ireland)
(Source: Created by Self)
3. Implications required by Marvin and Smith for a wider geographical area in
Ireland
The establishment of new business in a foreign market always requires specified
implication to set a strong step in the new market. In addition to the above factor, the
coffee shop owned by Marvin and Smith faced implications regarding their competitive
advantage and supply chain for their expansion in Cork City and the Ireland overall. As
commented by Dawson et al. (2016), the geographical area marked for the country of
Ireland depends on their local people. The following are the discussion made on the two
important facts to get applied for their further expansion:
Gaining competitive Advantage
As indicated by Watson (2016), the emphasis led by competitive advantage is the
factors that create difference between two companies working under a similar industry.
That is, the key components creating the sense of uniqueness for a firm is said by the
competitive advantage marketed for the company. In addition to the discussion,
deprived of a specified competitive advantage, none of the company can flourish in the
world of competition. Therefore, in case of Marvin and Smith, the competitive
advantages that can be marked are in terms of innovative creation of their interiors that
attract more customers as compared to the other business firms. However, there are
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different methods that can be applied for gaining competitive advantage. These factors
involve the following:
Figure 1: Competitive Advantage for Coffee Shop
(source: Created by Self)
In addition to the above made figure, the application of competitive advantage deals
with the unique strategies that are applied by the coffee shop of Marvin and Smith.
However, the impact led by the brand image plays an efficient role in order to mould the
minds of the mass audiences. As the coffee shop plans to establish in the Cork City, the
English market of the City would further appreciate such a coffee shop that attracts the
eyes of the target market. On the other hand, Ireland is a country enriched with the taste
of coffee culture among their residing generations. Therefore, the importance of existing
markets of competitions marked as Nescafe, Starbucks, and such other affects the level
of competition that must be analysed by the organisation of Marvin and Smith. It is
further recommendable for the business partners to analyse the strategies utilised by
the renowned companies in order to plan their working strategies for further expansion.
Supply Chain
An organisation that tends to establish its effective step within the new target market,
deals with efficient knowledge of their supply chain and their further management.
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However, as stated by Patten and Newhart (2017), for every supply chain there lays a
proper set of management that are adapted by a particular business. In addition to the
above made discussion, there are different components involved for the management of
the supply chain. This involves, the availability of raw materials, the components
required for market outlooks, manufacturers of the raw materials, retailer of the
business along with their consumers. Therefore, the discussed five stages are efficient
enough to grab the actual importance of a business in terms of their market and people
spread across the limited geographical areas. However, as indicated by Smith et al.
(2016), the facilities marked in terms of the business facilities deals with the
transportation issues and its feasible opportunities availed by an organisation. In case of
Marvin and Smith for their coffee shop, the country of Ireland is a busy country and thus
faced complexities regarding the transportation timings. However, the business may
face delays of acquiring products and materials as the roads are congested.
4. Financial information evaluated in context of profitability and liquidity for
coffee shop
The business of coffee shop held by Marvin and Smith has been well analysed with the
structure income statement for the year 2016. However, on that note, the following are
the evaluation made for the financial statement analysed for their further expansion in
Ireland. The assumptions are made in order to analyse the liquidity and profitability
related to the coffee shop run by Marvin and Smith in London:
Particulars Amount (£)
Net Profit 26800
Net sales revenue 360000
Net profit margin 7.444444444
Table 2: Net Profit of Coffee Shop
(Source: As per the case study)
The above table analyses the net profit of the coffee shop to decrease in comparison to
the standard level of the market. Therefore, the net profit for their old business in
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Business Essentials
London would help the business partners to strategies their expenditures in a way that
would increase their net profit when established in the Cork City Ireland. The below
mentioned is the table analysed in term sof gross profit in the context of the coffee shop:
Particulars Amount (£)
Gross Profit 208000
Net sales revenue 360000
Gross profit ratio 57.77777778
Table 3: Gross Profit Margin
(Source: As per the case study)
In addition to the table for gross profit margin of the firm in London, the business
partners can further avail the gross ratio for their return on capital. Therefore, the table
analyse below the section marks for the return on capital employed to account for
26.8% affecting the business held in London in a neutral or standard level of profit.
Particulars Amount (£)
Total capital of the organisation 100000
Net profit for the year 26800
Return on capital employed 26.8
Table 4: Return on Capital
(Source: As per the case study)
However, the liquid flow of cash that must be maintained within an organisation is an
important aspect for analysing the future requirements of cash that must be present in
case of emergency within the firm. Moreover, the following are evaluation made for the
sustainability marked for liquidity in the coffee shop run by Marvin and Smith:
Particulars Amount (£)
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Current assets 35400
Current liabilities 6200
Current ratio 5.709677419
Table 5: Liquidity of the organisation
(Source: As per the case study)
The liquid ratio of a company indicates the ability of the firm to achieve the immediate
problems of payment. Thus, in case of Marvin and Smith, the coffee shop measures
there organisation situation as per the standard level of liquid ratio. The standard level
of liquid ratio has been marked as 1:1 and thus, the incorporates the overall capability of
the availing the amount of liquid cash for establishment of Coffee shop in Cork City.
Particulars Amount (£)
Current assets 35400
Current liabilities 6200
Inventory 8000
Quick / Liquid assets 27400
Quick / Liquid ratio 4.419354839
Table 6: Liquid Ratio of Coffee Shop
(Source: As per the case study)
5. Viability of coffee shop expansion overseas
The information collected in the above held discussion marks for the planning of
opening a coffee shop by the two business partners Marvin and Smith. The two partners
were famous for their food and catering industry spread in London and further wished to
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expand their brand as a coffee shop in Cork City London. The emphasis led by the
coffee shop of Marvin and Smith made actual attempts to analyse their financial stability
for the year 2016. Thus, by doing this, the business owners gained strong mapping for
their future strategies to be set for the overall performance expected for the coffee shop
in Ireland. In addition to the made discussion, there are two aspects analysed with the
implementation of the assumed issues that may be faced for their competitive
advantage.
Conclusion
From the above made4 discussion, it can further be concluded that the coffee shop plan
for the expansion in the Cork city in Ireland. Moreover, there are reasons availed for the
selection of Ireland as a country for the expansion of the coffee shop by the two
partners. The analysis made through the Marketing mix has been availed within the
situational strategies that would be applied by the coffee shop in Cork City. Moreover,
the adaptability of the results catered for the previously prepared financial statements
are analysed for strategizing the future steps for establishing the new coffee shop in
Ireland.
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References
Dawson, A., Hirt, M. and Scanlan, J., (2016). The economic essentials of digital
strategy. McKinsey Quarterly.
Edwards, J.S. ed., (2016). The essentials of knowledge management. Springer.
Einwiller, S. and Weitzl, W., (2016). Business Essentials for Strategic Communicators.
Creating Shared Value for the Organization and its Stakeholders. Corporate
Communications: An International Journal.
Girgenti, A., Pacifici, B., Ciappi, A. and Giorgetti, A., (2016). An Axiomatic Design
Approach for Customer Satisfaction through a Lean Start-up Framework. Procedia
CIRP, 53, pp.151-157.
Ireland.com (2017) Food Markets Available at: http://www.ireland.com/en-us/what-is-
available/shopping/food-markets/destinations/republic-of-ireland/cork/all/1-45349/
[Accessed on 20 November 2017]
Jaggia, S., Kelly, A., Beg, A.B.M., Leighton, C., Olaru, D., Salzman, S. and
Sriananthakumar, S., (2016). Essentials of business statistics: communicating with
numbers. McGraw-Hill Education.
Patten, M.L. and Newhart, M., (2017). Understanding research methods: An overview of
the essentials. Taylor & Francis.
Sardana, G.D., (2016). Innovation and growth.
Smith, S.S., Peters, R. and Caldwell, C., (2016). Creating a Culture of Engagement--
Insights for Application. Business and Management Research, 5(2), p.70.
Watson, L., (2016). OPEN SOURCE ESSENTIALS. Strategic Finance, 98(3), p.62.
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