Business Essentials Report: UK Expansion for Coffee Shop Business

This report provides a comprehensive analysis of the business essentials required for the expansion of a coffee shop, specifically focusing on the UK market. The report begins with an introduction outlining the context of the expansion plans of Hank Marvin and Patty Smith, highlighting the high demand for coffee in the UK. The main body of the report delves into crucial aspects such as market research, emphasizing the significance of the UK coffee culture and the high demand for coffee. It then explores the marketing mix, detailing product, price, place, and promotion strategies tailored for the UK market. The report also examines the potential impacts of the expansion, including gaining a competitive advantage and managing personnel issues. It discusses the importance of understanding the market dynamics, ethical considerations, and structural challenges. The report concludes by summarizing the key findings and recommendations for a successful coffee shop expansion in the UK, emphasizing the importance of adapting to the local market and addressing potential challenges. The report also highlights the significance of financial aspects like profitability and liquidity in decision-making for the business expansion.

Business Essentials

TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................3
MAIN BODY .................................................................................................................................3
1. Research .................................................................................................................................3
2. Marketing Mix........................................................................................................................4
3. Impacts ...................................................................................................................................6
4. Evaluate how profitability and liquidity may impact on decisions. ......................................7
CONCLUSION ..............................................................................................................................9
REFERENCES .............................................................................................................................10

INTRODUCTION
Business essentials are the innovative set of tools and techniques that are used to develop
and establish the business organizations in such a manner that it will turn out to be very
profitable for the owner of organization. These are designed to meet the specific and key areas of
the business by developing critical skills of the individuals. In United Kingdom, there is very
high demand of coffee among the individuals and this is the reason that there is high competition
among vendors and shop holders. Two business partners, i.e., Hank Marvin and Patty Smith are
planning to expand their coffee shop in Germany in order to expand their business operations.
Main aim of this report is to lay emphasis upon the factors that are important for expanding new
business in the European Union countries and the forces that are need to be considered while
setting up this expansion.
MAIN BODY
1. Research
Hank Marvin and Patty Smith can expand their business in the United Kingdom because
there is a huge demand of coffee over there. In United Kingdom, drinking coffee is the ritual for
people which they never skip. The culture of Britain's coffee shop is fully loaded with beans.
Since 2008, the market of coffee shops has seen huge success in United Kingdom. As per the
reports, the market value of this industry in 2008 was £2.2 billion approximately. In last five
years, market has seen the growth of 38% approximately, the growth increased by £2.5 billion in
2011 and £3.5 billion in 2017. United Kingdom can prove to be a suitable country for Hank
Marvin and Patty Smith to expand their Marvin and Smith coffee shop; it is because of the very
high demand of the coffee in the country(Ovalle-Rivera, 2015).
The people of United Kingdom consider coffee as the part of their busy lives and there
are very huge number of coffee drinkers available in the country. There is continuous growth of
this industry in United Kingdom in last few years because of its high demand. As per the reports
and the findings, there are only 18% of the people available in the country who do not prefer to
drink coffee out of their homes and places. The ratio is very little, if Marvin and Smith coffee
shop use proper techniques to engage the interest of their potential customers than in that case
they can achieve the remarkable success in United Kingdom(Yu, 2016).

While on the other hand, it is essential for Hank Marvin and Patty Smith to demonstrate
the logistical consideration for setting up business in the United Kingdom as it plays a vital role
in business model and helps in managing the control and flow of goods in and out of the
business. These considerations help in identifying the needs and demands of the customers in
order to provide them proper satisfaction. Whenever a business expand its branches, there are
several types of challenges and issues come along with it. These considerations provide various
kinds of ways through which these impacts can be minimized in order to run the business
effectively and efficiently.
Ethical considerations also play a vital role while setting up business in new country as it
is essential for the members of the company to understand the requirements and desires of
market in which the company is planning to expand their operations. These considerations help
in identifying the variations between the acceptable and unacceptable behaviour of the business
organizations while practising functions in any particular country. For every country and for
every society, the ethical considerations to be followed by the organizational members
vary(Rid,2014).
There are various number of Structural Challenges that business needs to faced while
expanding or establishing business in the United Kingdom. Some of them are as follows :
 Supporting the elderly
 Boosting productivity
 Fiscal reconstruction
There are various number of factors that need to be keep in mind while expanding
business, it is essential for the Hank Marvin and Patty Smith to consider those factors while
planning their operations in order to minimize the future uncertainties and demonstrate the
impact of these factors in order to run the business effectively in the new country(Grant, 2016).
2. Marketing Mix
Marketing mix is provides basis and foundation to the marketing techniques, these are
the various set of tools that are used by the firm in order to generate the marketing objectives as
per the targets and the focus of the firm. This technique is broadly sub divided into four major
categories namely: product, price, promotion and place. Hank Marvin and Patty Smith are
planning to expand their business function into United Kingdom, for this they can use tools of
marketing mix in order to achieve the competitive edge in over seas market. Hank Marvin and

Patty Smith, decided to expand their business function when they notice the demand for their
East African inspired coffee and themed evenings among the International tourists and their
increasing popularity over their(Chen, 2015).
Marketing Mix in relation to the Marvin and Smith coffee shop expansion in United Kingdom:
PRODUCT
Marvin and Smith coffee shop, offers coffee to their customers along with some snacks, pastries
and some different kind of beverages. The demand of coffee is very high in United Kingdom and
the people out their like to eat some light snacks along with it. If Marvin and Smith coffee shop,
serve some kind of snacks along with the coffee to their customers in United Kingdom, then in
that case they can attract the attention of their customers towards their shop and offerings.
Product that the company offers is up to the desires and the expectations of the customers in
order to provide them maximum satisfaction and to fulfill their needs as per the
desires(Datta,2017).
PRICE
In United Kingdom, there is very huge demand for coffee, and there are approximately only 18-
19 % of the individuals who does not prefer to drink coffee outside their houses and places.
While due to high demand there is also very high supply. There are various number of big and
small coffee houses are available in United Kingdom, who work to fulfill the needs of the
customers. It is important for the Marvin and Smith coffee shop, to keep the prices of their
offering very nominal in order to gain the recognition in the market. Price of the product plays
very vital role in deciding whether the customers are going to adapt it or not. It is the important
aspect that helps in deciding the factors that company need to focus upon while deciding the
prices of their products and services(Seo, 2016).
PLACE
The area area and the ambiance of the shop also plays very vital role in deciding and measuring
its success. Generally the location of such coffee houses should be near work places and offices
so that people can visit their in free or break hours. It is important to set such shops at busy and
well known location in order to create and increase its recognition among the
customers(Karunaratna, 2016).
PROMOTION

The demand for the coffee is very huge in United Kingdom, so on the other hand it's supply is
also very huge. There are various number of outlets in United Kingdom who provides a good
cup of coffee with very pleasant ambiance, so it is very essential for the Marvin and Smith
coffee shop, to come up with some unique and individual features in order to increase their
competitive edge. The owners of the coffee house can use their unique feature as the prominent
promotion approach in order to build the certain position in the market and among
customers(Vallance, 2014).
3. Impacts
Hank Marvin and Patty Smith can expand their business in to United Kingdom,because
there is very huge demand of coffee over their. In United Kingdom drinking coffee is ritual for
the people, which they never skip, the culture of Britain's coffee shop is fully loaded with beans.
Since 2008, the market of coffee shops has seen huge success in United Kingdom. As per the
reports the market value of this industry in 2008 was £ 2.2 billion approximately. In last five
years the market has seen the growth of 38 % approximately, the growth increased by £2.5
billion in 2011 and £3.5 billion in 2017
Gaining Competitive Advantage
Whenever company expands its business functions, there are several number of risks
associated with it. These risk factors are associated with the internal and the external factors of
the business environment and it is very essential for the firm to consider those factors in order to
maintain the sustainable position in the business environment. Gaining competitive advantage
can be explained as maintaining unique position in the market where there is lot of competition
available. Whenever there is high demand of the product is present, there are several number of
supply channels are available. In order to gain the competitive advantage it is very necessary for
the Marvin and Smith coffee shop, to develop some unique and individual features into their
working in order to attract the attention of the customers. These unique feature will help the
company in expanding their functioning in very effective manner, because customers always
attract towards the new and unique features, and it has been seen that almost each and every
coffee house of the United Kingdom offers same kind of product and services to their customers
and the environment and ambiance of the shops is also quite similar from one another, so if the
Marvin and Smith coffee shop, comes with some new and unique idea than in that case they are
able to gain the competitive advantage. Gaining competitive advantage can be explained as

maintaining unique position in the market where there is lot of competition available. Whenever
there is high demand of the product is present, there are several number of supply channels are
available. In order to gain the competitive advantage it is very necessary for the Marvin and
Smith coffee shop, to develop some unique and individual features into their working in order to
attract the attention of the customers(Rodrigues, 2015).
Personnel and managing staff issues
In Marvin and Smith coffee shop, there are total 11 members in staff, 3 cooks, 4 waiters
and 4 who conduct other basic function like purchasing, cleaning, washing utensils etc., they
provided a special kind of training to the staff members in order to make them deal with the
customers in the more effective manner. In any firm or unit, it is very essential for their owners
to keep their customers and other members satisfied and motivated. Marvin and Smith coffee
shop is the small unit with only 11 members and 2 owners, so any occurrence of conflict and
disputes among the staff members can lay situation of stress among the whole firm. It is very
essential for the owners of the coffee house to discuss the issues and the problems that are going
on at the workplace, and there are very less members so they can also conduct face to face
personal sessions with each and every staff member in order to identify the problems and issues
they are facing, this will help in increasing its productivity and profitability. The coffee house is
planning to expand their working into United Kingdom, so it is very essential for them to
develop the environment which can be used as the example by their their outlets. In order to
keep the staff members motivated and satisfied and to keep the working environment positive it
is very essential for the members of the firm to keep their employees involve in several kinds of
activities and to boost up their motivation level by providing various kinds of financial and non
financial benefits to their members. Motivated staff will give their full potential and make
optimum utilization of the resources in order to bring the maximum satisfaction level of the
employees and all the staff members of the organization(Ferreira, J2017).
4. Evaluate how profitability and liquidity may impact on decisions.
As per the income statement of Marvin and Smith's Coffee Shop, on December 31st 2016,
the total number of recorded sales was 360,000. as per the report the purchases made by the firm
was 160,000 and their closing stock was 8000.(160,000-8,000= 152,000). The recorded Gross
Profit of the firm was 208,000(360,000-152,000). The report also mentioned some other
expenses that the firm has made:

Electricity 32,400
Salaries & Wages 34,000
Rent and Rates 80,000
Telephone 8,400
Other expenses 8,000
Depreciation -Equipment 6,400
Depreciation – Fixtures 8,000
Depreciation – IT Equipment 4,000
Total = 181,200.
The company can lessen their expenses on electricity by using it wisely and give strict
instruction to the staff members regarding this. The firm can also reduce their telephone
expenses. The overall recorded net profit of the firm was 26,800, which they can increase up to
30,000 by managing their expenses efficiently. They can also use their creativity in managing
the expenses in order to increase the profit ratio of the company.
As per the statement of the financial position of the company, the ending value of the non
current assets of the company :
Non-Current Assets
Equipment 40,000 6,400 33,600
Fixtures and Fittings 40,000 8,000 32,000
IT Equipment 16,000 4,000 12,000
96,000 18,400 77,600
The value of the current assets of the company :
Current Assets
Inventory 8,000
Cash 27,400
35,400
Total Assets 113,000
Capital 100,000
Profit 26,800

Drawings (20,000) 6,800
106,800
Current Liabilities
Trade Payable 6,200
Total capital and liabilities 113,000
The expenses of the company are in their hand, it's up to the owners of the firm how they
structure and manage their expenses in order to gain the maximum profit. The financial decisions
are the most important decisions of any business firm whether it is small or big. It is very
necessary for the firm to record their expenses and losses in order to make the most effective use
of the revenues of the organisation(Moat, 2017).
CONCLUSION
From the above report it can be concluded that there are several and various number of
factors that are need to be considered while practicing business in the competitive market. Hank
Marvin and Patty Smith are tow business partners who are owners of Marvin and Smith's Coffee
Shop, after noticing their success and popularity both of them decided to expand their business
over seas. As per the research and the suggestions United Kingdom is the best suitable country
for expanding the coffee shop because of the very huge demand of coffee over there. There are
several number of internal and external environmental factors that are need to be considered by
planning their expansion because these factors and features helps the firm members to plan their
business function in more effective and efficient manner. It has also been seen that because of
high demand there is very huge competition among the owners of the coffee shops, so it is very
essential for the Hank Marvin and Patty Smith to come up with some unique and individual
features in order to maintain the competitive edge and advantage of the firm.

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