Overseas Expansion Viability Analysis: Business Essentials Advanced

This report assesses the viability of Marvin and Smith's overseas expansion, focusing on Belgium as a potential location. It delves into logistical and ethical considerations, marketing mix strategies, and structural challenges. The report analyzes the implications of geographical expansion, including competitive advantages and personnel management issues. Furthermore, it evaluates the impact of profitability and liquidity on decision-making. The analysis considers Belgium's market conditions, raw material availability, and labor market. It also addresses potential challenges related to cultural adaptation, competition, and financial constraints, ultimately providing a concluding summary on the overall feasibility of overseas expansion at this stage. Desklib provides a platform for students to access a variety of solved assignments and past papers.

Business Essentials Advanced
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Contents
Introduction..........................................................................................................................................3
1. Research (country to start-up with)......................................................................................4
Justification......................................................................................................................................4
Logistical considerations................................................................................................................4
Ethical considerations....................................................................................................................5
Structural challenge........................................................................................................................5
2. Marketing mix..............................................................................................................................6
3. What are the implications of the need for Marvin and Smith’s to cover a wider
geographical area in terms of a different country?.........................................................................8
4. Using the preceding financial information, evaluate how their profitability and liquidity
may impact on decisions available to them...................................................................................10
5. Write a concluding summary of the overall viability of overseas expansion at this stage.
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References........................................................................................................................................12
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Introduction
Business essential introduces the world of business and also helps in preparing the
economic role of worker, citizen and consumer in the ever-changing world through
effective written and oral communication and leading by influence. This assignment
helps the reader in knowing about the different issues which are responsible for
covering a wide range of geographical areas. In the reported study, marketing mix
plan has been mentioned in context to the coffee shop extension proposal in abroad.
This report covers the case study of Marvin and Smith who have planned to open a
new coffee shop in the best location. Belgium is the best location to inaugurating a
new shop. This reported study also explains the issues which can be responsible for
affecting the market expansion in a negative way. In addition to this, the reported
study also enlightens over the financial information for evaluating the profitability and
productivity level of the firm.
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1. Research (country to start-up with)
Belgium is a Western Europe country within the European Union. This country has a
wide range of areas including Dutch-speaking people to the north, French-speaking
society to the south and a German-speaking public in the east. The city of Brussels
is the capital of Belgium. Basically, Belgium is famous for its national cuisine than
junk food such as fries, chocolates and many more. The currency of Belgium is euro.
The overall population of Belgium is 10.6 million. The total area covered by Belgium
is 30,528 km². The official language of Belgium is French, Dutch and German
(Lonely Planet, 2018).
Justification
The reason behind choosing Belgium as a place for the expansion of coffee shop is
the availability of a large number of raw materials. Belgium is a main trade center
and storage for the coffee materials in Europe. In 2015, the main destination for the
green coffee exports in Belgium's was the Netherlands which receives around 70%
Belgian. Nearest nations France and Germany expected 17% and 5% of Belgium's
exports in an effective and efficient way. Belgium only exports coffee materials but
they don’t have a suitable number of coffee shops. A number of people in Belgium
are unemployed. It can be a big opportunity for the organisation for the hiring of a
new employee in a limited amount. As the Marvin and Smith are European citizens
then they are not required to take work permit from the government. It is important
that the organisation must be registered under the tax authority of the operating
country. As per a survey, coffee is the second most popular drink after water in
Belgium (Lonely Planet, 2018).
Logistical considerations
Logistics can be defined as the management of the flow of kits among the point of
source and the point of depletion in context of meeting the requirements of
customers or corporations in an effective way. In Belgium, Marvin and Smith’s coffee
shop can use carrier services for the transportation of services. This will be helpful in
covering the urban and rural areas as well. The organisation can also hire
employees or delivery boy for the selling of product and services from one place to
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another. In Belgium, Marvin and Smiths can also implement their online trucks which
can move from one place to another easily. This will be helpful in covering a range of
customers in an effective way. The logical consideration in Belgium is very much
visible and the transportation highly supported so that the organisation can easily be
able to obtain new and fresh raw materials and food items at low cost (Susanty and
Kenny, 2015).
Ethical considerations
In simple words, ethics can be defined as standards of conduct that distinguish
between right and wrong. Belgium is also known as the higher customer of coffee in
Europe. The price setting is depending on the policy and disciplines of the
organisation. They can be able to set price as per it’s their needs and demands. The
organisation can also set higher price because the local people have the habit luxury
drinks and foods. Basically, it can be seen that the currency rate of Belgium are
moderate so that the investment cost will be lower due to this (Tucker, 2017).
Structural challenge
The structural challenge that can be faced by the management of Marvin and
Smith’s is that the organisation is only concentrated with the manufacturing of coffee.
Basically, tourists would desire to have foodstuff with the coffee so they will definitely
come out the café when they come to know this issue.
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2. Marketing mix
The marketing mix is simply a combination of factors that can be controlled by the
company to influence their customer to purchase its product and services such as
food, beverage or others.
Price- The cost price of the raw materials produced by Belgium is are cheaper than
the UK. As per a survey, the fixed properties of Belgium are approximately 5.3 billion
euros. The Belgium government are permitted the opening of the new coffee shop as
this will be helpful in improving the employment rate of the country in an effective
and efficient way. The production of coffee products will be an operational cost in
Belgium but the price setting of goods will be higher in the other operating countries.
This will impact the business of coffee shop.
Product- Organisation needs to do a market analysis before the preparation of the
product. This will be helpful in knowing the demand and desire of customers in the
context of foods and beverages. It is important that the product which is to be chosen
by the organisation must be standing out of the coffee shop crowd. The menu must
consist of the specialty of the organisation.
Place- Belgium is a rich economy in the context of the tourism industry. Marvin and
Smith coffee shop can be open in a crowded place so that a large number of people
can easily get attracted. The issue that can be faced by Marvin and Smith is
adaptableness and the cost factors such as exchange rates or others. In the
previous country, Marvin and Smith is a well-known coffee shop which serves a wide
range of coffee drinks to their customers (Plazy, 2016).
Promotion- For an effective promotion of firm, Marvin and Smith can use social
media such as Facebook, Gmail, YouTube or other channels for the publicity of
products. This is due to a large number of customers are using social media as a
way of communication from one person to another. They can also use pamphlet and
hoardings for the promotion of their foodstuffs. They can also add the various types
of coffee beans as an additional feature in the advertisement. Marvin and Smith can
also promote their products in the newspaper as this is largely used by the local
people.
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People- Marvin and Smith can target teenagers and youngsters for the coffee shop.
They can also hire an expert professional team for the selling of foodstuffs. This will
be helpful in enhancing the number of customers in an active way. Marvin and Smith
can also offer discount and additional gift hamper to their customers. The employee
retention will be improved due to this (Plazy, 2016).
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3. What are the implications of the need for Marvin and Smith’s to cover a wider
geographical area in terms of a different country?
Gaining competitive advantage
According to the present position of the supplies located in the UK, it can be seen
that the owner Marvin and Smith are rapidly changing their organisational structure
which sometimes gets fail because people will not always adopt the same type of
food and beverage. It can be responsible for affecting the operating cost of the firm
as well as it will give a financial burden upon the firm. For an effective way for the
implementation of the shop, it is important to the organisation can analysis the
market trends of Belgium. This will be helpful in knowing the current market strategy
of a coffee shop in a systematic way.
 The food services which are provided by Marvin and Smith’s are tremendous as it
will be helpful in providing the best quality of foodstuff to the customers.
 One of the issue which can be responsible for affecting the growth of the
organisation is the adaptability because the local people can take time to know about
the brand and its product. Starbucks and other coffee shops are the main
competitors of Marvin and Smith’s. These coffee chains are operating for many
years and it will definitely implement new tactics and plans for managing the number
of customers (Rashid and Ghose, 2015).
 One of the main advantages of Marvin and Smith’s is that its finest coffee beans
from Gumutindo Coffee from Uganda are the rarest beans which are only used in
Marvin and Smith’s coffee shop. This type of coffee is not given by any of the coffee
shops in Belgium (Sekaran and Bougie, 2016).
 The issue within the competitive advantage of Marvin and Smith’s is the low
presence of food products in the marketplace. If the local people will not show their
attention towards the coffee shop then there will be no any use of promotion and
advertisement activities.
 If the Marvin and Smith’s coffee shop will get the café existence in Belgium then they
can change the brand recognition in an effective manner.
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Personnel and managing staff issues
As per the case scenario, it can be seen that the Marvin and Smith’s is one of the
best fair trade suppliers and has complied with the standard of equality. They can
face the management and worker issue because, from the previous region, the laws
and policies of Belgium are different. The organisation is required to approve a
contract of employment from the government. Basically, Marvin and Smith’s are
planned to open a new coffee shop in Belgium which can be a huge challenge for
them.
 It is important to manage the management as well workers in an effective manner.
For this Marvin and Smith’s are required to organise a training session for the new
candidates. It can be responsible for affecting the financial budget of the firm as well
it will consume time.
 In the training session, it cannot be surely said that the training session will be
helpful for the employees. Some of the employees may not coordinate with the
trainer then it can be responsible for affecting the overall session in a negative way.
 The employees would expect a high salary from the management. This can be an
issue of conflict within the firm. One of the disadvantages of operating a coffee shop
in Belgium is the low retention of employees. It can be seen that employees of
Belgium can easily be attracted towards the higher pay scale
 Less coordination of employees is one of the main management issues. It is
important that the employees can work in a systematic manner. Marvin and Smith’s
are not familiar with the feedback of customers from Belgium (Vinten, 2013).
 Marvin and Smith’s can also face the language issue while operating in Belgium as
their local language are French, Dutch, and German. The financial budget of the firm
will be affected due to the skill and grooming classes.

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4. Using the preceding financial information, evaluate how their
profitability and liquidity may impact on decisions available to them.
The profitability and liquidity are two main aspects of the organisation. The decision
has affected the profit that is earned by the organisation and the position of the
company to repay the liabilities. The decision is important with respect to the
feasibility and prospect for future growth which can be determined with the help of
the profitability and liquidity of the company. There are various decisions that need to
be taken care by the organisation related to the capital as well as managerial
decision making of the company. The company needs to expand the business which
involves various requirements of the assets and establishment of the staff and other
furniture which requires funds. The profitability of the company will make Marvin and
Smith look at the best options available to them and choose out of it (Edmunds,
2018). Marvin and Smith's profitability is not much being a net profit of £26800. They
can either opt for starting the shop with a single asset or then look forward to
expanding. It is important that they are able to provide a proper experience and
services to the customers as it has played a critical role in the promotion of the
existing shops and the opening of other shops in London. The decision regarding the
hiring of the staff will be affected by the profitability earn by the organisation.
The liquidity is affected by the increase in the liability and decrease in the sources to
repay them. The capital structure is important to maintain the liquidity of the
company. The capital structure consists of the sources from which funds are
generated such as the debt or the equity. Higher is the debt portion of the capital
structure with respect to the equity weaker is the liquidity of the company. The
company will be requiring the funds for the working capital and establishment
(Hamel, 2018). Marvin and Smith can generate the funds from the personal capital
that is available or can also look for funds from banks or financial institutions as a
loan. The loan has the interest cost associated with the acquiring of funds which
company must focus to repay in an effective and efficient way or can increase the
liability. The company can also use the capital available but it is important that there
are adequate funds in the working capital. The decision making regarding the
investing and management of the funds are dependent on the liquidity of the
company.
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5. Write a concluding summary of the overall viability of overseas
expansion at this stage.
By considering the case study of Hank Marvin and Patty Smith, it can be easily said
that Belgium has enormous opportunity for growth for the growth and development.
For managing its same market image, the organisation can adopt the concept of
service delivery of foodstuffs which are used in the other countries. They provide
coffee drinks made up of Gumutindo Coffee beans from the Uganda farms. In the
new café, they are planned to serve new dishes such as snacks, cookies which are
generally not served by the other coffee shops. They also import high quality of tea
for the processing of tea drinks.
The idea of expanding the new coffee market in Belgium is acceptable because the
logistics cost, transportation, and other additional cost are low from another region.
The cost of import of raw materials is also low due to less restriction in the trade rate.
The organisation can also provide additional gifts hamper to their customers. This
will be helpful in attracting a number of target and potential customers. The earlier
practice of Marvin and Smith’s coffee shop has done a tremendous job as they
satisfy the needs and demand of customers. They provide WIFI services to the
customers along with the music system (Marks and Hidden, 2018).
For managing the number of employees, it is important to provide training and
development session to them. The local employees of Belgium are not familiar with
the current tactics and plan of Marvin and Smith’s. It is important that the
organisation needs to provide additional offers to their customers such as food
discount, gaming zone or others in the same amount. It can be seen that the
registration process in Belgium is very easy but while employing a candidate the
organisation needs to take orders from the government. They are required to check
out the whole identity proofs by the local police.
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References
 Edmunds, A. S., 2018. Factors Influencing Decision Making in a Business
Environment. Chron. [Online]. Also available at
http://smallbusiness.chron.com/factors-influencing-decision-making-business-
environment-65082.html. [Accessed on 17-03-2018]
 Hamel, G., 2018. Business Factors Indicating Liquidity Problems. Chron. [Online].
http://smallbusiness.chron.com/business-factors-indicating-liquidity-problems-
44071.html. [Accessed on 17-03-2018]
 Lonely Planet., 2018. Welcome to Belgium [Online] Lonely Planet. Available at:
https://www.lonelyplanet.com/belgium [Accessed: 16 Mar. 18].
 Marks, J. and Hidden, K., 2018. Brownies & Downies: coffee, culture and
community: a social innovation that supports the intellectually disabled. Emerald
Emerging Markets Case Studies, 8(1), pp.1-15.
 Plazy, S., 2016. Roles and Dynamics of Communities of Practice in a Changing
Media Sector: The Case of Brussels-Based Journalists. In ECREA 6th European
Communication Conference: Mediated (Dis) Continuities: Contesting Pasts, Presents
and Futures.
 Rashid, S. and Ghose, K., 2015. Organisational culture and the creation of brand
identity: retail food branding in new markets. Marketing Intelligence &
Planning, 33(1), pp.2-19.
 Sekaran, U. and Bougie, R., 2016. Research methods for business: A skill building
approach. John Wiley & Sons.
 Susanty, A. and Kenny, E., 2015. The relationship between brand equity, customer
satisfaction, and brand loyalty on coffee shop: Study of Excelso and
Starbucks. ASEAN Marketing Journal, pp.14-27.
 Tucker, C.M., 2017. Coffee culture: local experiences, global connections. Taylor &
Francis.
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