Business Report: Marvin & Smith's Coffee Shop Expansion into France

This business report assesses the feasibility of Marvin & Smith's Coffee Shop, a British coffee chain, expanding into France. It justifies France as a suitable market due to its significant coffee imports, established coffee culture, and potential for growth. The report explores the marketing mix strategies necessary for success, including product adaptation, competitive pricing, strategic placement, and effective promotion. It also addresses the implications of geographical expansion, focusing on organizational culture and competitive advantages. Furthermore, the report evaluates the impacts of profitability and liquidity on the expansion decision, using financial ratios to determine the company's financial stability and capacity for international growth. The analysis highlights the importance of understanding the French market's specific demands, such as the increasing preference for sustainably produced coffee, to gain a competitive edge.

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Contents
INTRODUCTION...........................................................................................................................................3
QUESTION 1.................................................................................................................................................3
Justification for expansion of Marvin & Smith’s coffee shop in France...................................................3
QUESTION 2.................................................................................................................................................5
Marketing mix in relation to Marvin & Smith’s coffee shop....................................................................5
QUESTION 3.................................................................................................................................................7
Implication of the need for Marvin & Smith’s coffee shop to cover wider geographical area in regard
of different nation...................................................................................................................................7
QUSTION 4...................................................................................................................................................8
Evaluation of impacts of profitability and liquidity on available decision in Marvin and Smith’s coffee
shop.........................................................................................................................................................8
CONCLUSION.............................................................................................................................................10
REFERENCES..............................................................................................................................................12

INTRODUCTION
The required business report was created for Marvin & Smith's Coffee Shop, a British coffee
shop chain. In 2016, the institution was created. Following its successful launch in the UK
market, the authority plans to extend its coffee shops into other possible EU countries. As a
result, the major goal of the following paper is to perform study in order to analyze and propose
the best EU countries and tactics for company development (Dazzi, 2019). According to the
findings, they should increase their coffee shop operations in France. It provides a perfect
location information, good governance, and significant advantages for international firms to
thrive. In terms of green coffee imports into Europe, France is a major player. The majority of
French purchases are bought directly from originating nations, providing exciting potential for
coffee producers. In addition to being a major import, France has a sizable coffee roasting sector.
Freshly roasted sales have risen dramatically in recent years, showing a steady interest in green
coffee drinks. Aside from huge international roasters, France is home to great small and medium
coffee chains, many of which concentrate on moral economic activities.
QUESTION 1
Justification for expansion of Marvin & Smith’s coffee shop in France
Marvin & Smith's Coffee Shop stands out from its competition in the UK because of its
rapid expansion, distinctive design, differentiated customer services and infrastructure, and
concentration on reasonable. Marvin & Smith's Coffee Shop's growing popularity among
customers, as well as its favorable impact on overseas visitors to the UK, demonstrates the
company's ability for overseas operations and prosperity.
France is the EU country that has been suggested for Marvin & Smith's Coffee Shop's worldwide
development, and there are numerous excellent arguments for it though. Coffee beans shipments
to France were 229,000 tons in 2020, accounting for around 6.4 percent of overall European
imports. Green coffee shipments to France climbed at a 6.4 percent yearly pace during 2016 and
2020. Green coffee is directly introduced from caffeine nations for around 77 percent of total
coffee beans shipments. Having coffee beans quantities of 56,000 tonnes, 30,000 tonnes, and
22,000 tonnes, correspondingly, Brazil, Vietnam, and Honduras are the top three exporters to
France (Park, Choi & Kang, 2020).

Coffee is a way of life in France. It’s all about how the French consume and appreciate
their espresso than it is about what they're consuming. Many coffee connoisseurs consider
French coffee to be pretty unfair and prepared from mediocre grounds. Taste, flavor, and
presentation, on the other hand, have nothing to do with what it really is. Relaxing at an outdoor
café, observing people and the country move by while relaxing and enjoying a nice, robust mug
of French coffee is all about the atmosphere.
The cafe culture is prominent in France, because there are a lot of cafes on the town
centre. As a result, France is one of the largest and most established coffee markets in the world,
with a long history of coffee drinking and a diverse range of tourism attractions. As a result, the
French sector seems to be under strain due to the negative consequences of caffeine intake on
health. In order to keep French consumers interested, several larger businesses are focusing on
open containers. Coffee generates US$ 2,673 million in income in 2019. The market will
increase at a rate of 2.0 percent every year.

(https://www.statista.com/outlook/cmo/hot-drinks/coffee/france#revenue)
Notes: The data has been calculated using actual exchange prices. The actual currency rates used
are shown in the Key Market Indicators section above. In October of 2021, the steady swiss franc
of 2017 was replaced with today's exchange rate.
As a result, the coffee market in France is rather large. As a result, the decrease in revenue of
specifications of freshly coffee grounds accounts for US$ 2,673 million in 2019. The market is
predicted to rise by 2.0 percent every year. As a result, the demand for coffee in France is rather
large. As a result, the drop in coffee intake is mostly explained by a decline in sales of
specifications of fresh ground coffee. As a result, the market is predicted to increase at a rate of
2.0 percent every year. France's valuation is exceptionally high, accounting for over 30% of total
amount sold. The French public is consuming increasingly coffee outside of the household, and
food products, freshly ground coffee pills, and black coffee are all selling well in the marketplace
(Giordani, 2018).
QUESTION 2
Marketing mix in relation to Marvin & Smith’s coffee shop
The marketing mix, which is the decision made by a company while offering an
appropriate product to a prospective buyer has been divided into four key marketing approaches.

Product, promotion, pricing, and location are the four elements. It indicates that firms should
produce goods and services and distributes that in the most effective way, at the appropriate price
and at the lowest pricing (France, 2022).
These marketing mix tools should be used by Marvin and Smith to develop their firm in France.
Product: One of the most important aspects of Marvin & Smith's coffee cafes is that they
provide high-quality products and use the best coffee from Ghumtindo. Nevertheless, in trying to
entice the French population, the corporation has come up with the idea of serving dietary
cookies with coffee. As a result, they are also promoting coffee and snakes for health-conscious
customers, which will feature healthy amounts of nutrients, high protein content, and is suitable
for vegetarian eating. As a result, this company will expand product offering in France by
include famous sorts of cake tastes that French people like with coffee.
Price: When there are so many coffee shops in France, its brand awareness in the foreign market
is limited. As a result, there are several rivals on the market. As a result, businesses must employ
a premium pricing policy, which is one of the most successful strategies for gaining attention of
the customers and favor. As a result, in order to have an appealing development in France, it is
critical to provide reductions to clients in order for goods into becoming available on the market
today (Skuland, 2020).
Place: The most crucial aspect of the product mix strategy is this. It necessitates careful
preparation of the distribution network. Management should display and disseminate their goods
in areas where potential clients may readily get it. A well-thought-out supply chain necessitates a
thorough grasp of the target audience. Marvin and Smith want to market their coffee exclusively
from their business, as well as give delivery service. The coffee shop should be on a major Paris
thoroughfare, where it will be clearly visible and available to everybody. Having to work people
may simply get a cup of coffee on their way to work or schedule an appointment in a coffee shop
first thing this morning. They will get an edge over their competition by putting their business on
a major thoroughfare.
Promotion: It may be done with the use of sales outlets and the item directly, using posters and
store hallways with snakes, dairy goods, and other items. They will employ online platforms,
advertisements, and an online mode to promote its products in France. As a result, television and

railway platforms may be used to market goods. Furthermore, businesses must make good use of
advertising tactics to publicize their products available. It must be conducted in order to attract
clients to the market. Furthermore, the company should emphasize its fair dealing efforts and
distinctive consumer services. It may be able to set yourself excluding the competition in France
by employing better advertising strategies (Thoppil & Zein, 2021).
QUESTION 3
Implication of the need for Marvin & Smith’s coffee shop to cover wider geographical area in
regard of different nation
The two most common consequences that Marvin & Smith's Coffee Shop would encounter if it
expanded its geographical business to include the United Kingdom and France are outlined
following:
Organizational culture: In France, firms are usually hierarchical and controlled. The
firm's top management makes choices. The firm's leader will be powerful. Competence is widely
respected in France, and it is often the key to gaining respect from their French peers.
Employment interactions in the United Kingdom are substantially less authoritarian than in
France. Employees in the United States, for instance, commonly address their employer by his or
her first names, but in France, this is primarily limited for beginning and microenterprises. In
average, the working world in the United Kingdom is less conventional.
Marvin and Smith's corporate culture encourages its employees to be personable and
engaging with their clients, as well as to assist them with thematic nights, including such
participating in activities whenever they don't have anybody to spend with. Furthermore, they let
clients to address their issues and get guidance from a professional. Furthermore, the French
staff's support for Marvin & Smith's Coffee Shop's reasonable operations cannot be guaranteed.
As a result, one of the primary ramifications for the cafe's operations and management in various
geographic areas would be the administration of organisation behavior in France (Morisson,
2019).
Gaining competitive advantage: Coffee drinkers in France are increasingly demanding higher
coffees that are also produced in a sustainable manner. As a consequence, France's specialty
market has consistently increased over time. Mostly on French market, there are an increasing

couple of small coffee chains. Here on French coffee industry, environmentalism has become
more essential, rendering accreditation an inexorably important entrance condition for coffee
producers. Specialized coffee's proportion of the French coffee market has consistently risen
over the last several years, rising from 1–2% in 2017 to over 4% in 2020. Specialized coffees,
while still a small market, have a lot of room for expansion, particularly if they follow the lead of
the nation's well-established wine industry, which pays close attention to areas including
provenance, geography, manufacturing, and cooking techniques. By 2025, it is expected that
speciality coffee would account for around 10% of the overall French coffee market, according
to projections (France & Ghose, 2019).
While creating a coffee shop in France would provide them with exposure to the
worldwide market, federal rules may increases the price of creating a business. To profit from
exports, every country must offer its products at lower prices and lower its exchange rate. As a
consequence, the cost of coffee supplied from Ugandan will rise, decreasing the shop's edge over
its competitors. As a result, Marvin and Smith's store would grow more expensive to maintain
inside the long term. Marvin and Smith will lose comparative benefit and their capacity to
produce more product diversity as a consequence of importing coffee, chocolates, and cakes
from a single source.
QUSTION 4
Evaluation of impacts of profitability and liquidity on available decision in Marvin and Smith’s
coffee shop
The key profitability metrics of Marvin & Smith's Coffee Shop have been examined using the
financial information supplied in order to determine their influence on the company's choice to
expand in France.
Ratio Formula Outcome
1 Gross profit Gross profit/Sales x 100 =208000/360000 x 100=
57.78%

2 Net Profit Net profit/ Sales x 100 =26800/360000x100
=7.44%
3 ROCE Net operating profit / (Total
assets- current liabilities) x 100
=800/)113000-6200)
x100=25.09%
GP Ratio: The gross profit ratio may be computed by dividing an organization's sales revenue
by its entire total revenue. It is among the most essential measures for measuring a company's
monetary stability. Marvin & Smith's Coffee Shop's gross profit margin in 2019 is roughly 57.78
percent, indicating its efficient financial power for growing into new foreign markets.
NP Ratio: An organization's net profit ratio may be derived by determining its net total of
revenue by its whole sales volume. It's also a good way to figure out how strong a company is
financially by assessing its real wages from operating (Carmine & et.al, 2021). The NP ratio of
Marvin & Smith's Coffee Shop was 7.44 percent at the end of 2019, indicating the cafe's
successful financial productivity and success.
ROCE: Return on capital employed (ROCE) is an abbreviation that may be used in an
institutional climate. One such ratio shows an organization's ability to earn a reasonable return on
its infrastructure investments. It is measured by deducting an origination's net operating profit by
the organization's total asset worth after subtracting outstanding debts. The ROCE calculated for
Marvin & Smith's Coffee Shop in 2019 is 25.09 percent, indicating a good returns on investment
in the UK markets.
Analysis of liquidity ratio:
Ratio Formula Outcome
1 Current ratio Current assets/Current liabilities =35400/6200=5.71
2 Acid test ratio (Current assets – Inventories) / Current
liabilities
=27400/6200=4.42

Current ratio: A company's current ratio is calculated by dividing its current valuation by its
current liabilities in the marketplace. The most desirable current ratio for any multinational
corporation is about the same number of assets compared to current liabilities (Blackwood,
2019). In the instance of Marvin & Smith's Coffee Shop, the liquidity amount in 2019 was 5.71,
indicating that the company has a strong value of assets that may be spent for worldwide growth.
Quick ratio: An organization's acid test ratio or quick ratio can be calculated by removing
inventory from current assets and then dividing that number by current liabilities. As a result, it
more precisely determines an important role in the long capital value by removing inventory. In
2019, Marvin & Smith's Coffee Shop's quick ratio was 4.42, indicating the company's ability to
make large expenditures in the worldwide market. When compared to the conventional ratio of 1,
it is still high. This implies there are a lot of fast assets sitting around that might be used to grow
the firm.
These ratios can aid managers in their day-to-day operations. Marvin and Smith's coffee
shop has an absolutely superb operating cash flow condition when compared to other
competitors median. While Marvin and Smith's net profit margin is lower than the industry
average, they should lower their operational costs. Marvin and Smith will be able to operate their
coffee business in France based on the results obtained. There are vacant materials (cash) that
may be put to use in the construction of a coffee shop.
CONCLUSION
According to the aforementioned research, spreading abroad is a fantastic feat, but not all
organizations are capable of doing so. Before extending their firm into some other nation, they
must evaluate a number of issues. Geographical location, cultural contexts, laws and guidelines,
and ethical implications are all factors to take into account. It can be seen that France has been
suggested as the most promising and first overseas market for Marvin & Smith's Coffee Shop to
pursue. Paris has been chosen primarily for the cafe's first branch in France. This market decision
is justified for varied purposes indicated in the research.
Marvin & Smith's Coffee Shop has been advised to add a range of pastries in its client
offers, based on the inclination of French people for snacks with their coffee. Cost leadership
strategy and coordinated advertising strategies have been suggested in order for the café to attract

more focused clients. Furthermore, the organization's financial measures ratios back its choice to
grow its operations into overseas markets. As a result, the whole report is anticipated to assist
Marvin & Smith's Coffee Shop in making an informed choice about growing its company in
France.