Analysis of Coffee Shop Expansion Strategy in Poland - Advanced

This case study examines Hank Marvin and Patty Smith's plan to expand their food and catering business by opening a coffee shop in Poland. It assesses Poland as a suitable location due to its developing economy, low taxes, and high coffee consumption. The report delves into the marketing mix (product, price, place, promotion) and crucial factors like finance and accounting that Marvin and Smith must consider. It also evaluates the business's performance using profitability and liquidity ratios to determine the feasibility of the expansion plan. The analysis considers challenges such as limited cash flow and emphasizes the importance of marketing and financial planning for successful establishment and growth in the Polish market. Desklib provides more solved assignments.

Business Essentials
Advanced

Table of Contents
Business Essentials Advanced..............................................................................................................1
INTRODUCTION................................................................................................................................3
MAIN BODY.......................................................................................................................................3
Expansion of business into new unfamiliar territory..................................................................3
Marketing mix in relation to the coffee shop..............................................................................4
Factors to be considered in establishing the coffee shop in Poland............................................5
Explain the business according to the ratios calculated and evaluate the performance and how it
helps the company is their expansion plan..................................................................................6
CONCLUSION....................................................................................................................................7
REFERENCES.....................................................................................................................................9

INTRODUCTION
A business is form of activity related to trading of goods and services in order to generate
profits. A business is called as institution or organization that perform his activities to provide goods
and services to the society that helps in satisfying their needs and wants. To run smooth business,
finance play an extreme important role. If the finance is not included in any business, then the
business cannot sustain. finance involves all types of business funds (Camargo, 2022). Whether it is
small organization or large enterprises, finance is needed in both types of firms. The report is given
is case study in which Hank Marvin and Patty Smith run a food and catering business. The case
study includes in which country the business of food and catering should open, the marketing mix
in relation to coffee shop expansion plan and the factors to be considered in order to expand the
business into unknown country.
MAIN BODY
Expansion of business into new unfamiliar territory
Hank Marvin and patty smith work together to open a new firm of food and catering. They
have to decide to open the coffee shop and the best territory for them to establish the coffee
business is Poland. It comes in one of the republic country in central Europe. it is considered as the
one of the most developing country that offers moderate level of salary, low housing prices and low
taxes as compared to other European countries. Poland can be considered as best country to expand
the coffee business because the country fines low taxes which can help them in establishing the
business. The temperature of Poland remains below 0 degree Celsius. The people live there prefer
coffee so as to make the body temperature moderate. The main opportunity of opening coffee shop
in Poland hells in increasing the sales and develop the brand valuation and recognition. The
population of it is more than 3.8cr (Trejo, 2022).
Coffee is one of the most famous drink in Poland. More than 85% of people prefer coffee
and more than 58% of adult in Poland drink coffee every day. The unemployment rate in this
country is above moderate that can be an opportunity for the Marvin and Smith to employee the
people at minimum wages. The international coffee organization has the latest statistics and figures
that shows Poland consume more than 5% of worlds coffee consumption. The central Europe is
considered as the biggest importer of green coffee. The Marvin and smith uses finest coffee beans
from gumutindo coffee from Uganda. They provide high quality of coffee to their customers and the
citizens of Poland prefers high quality of coffee beans in their coffee. If the business enterprises is
successfully captured the market base of the Poland then it will be easily for them to capture other
nation customer base because Poland is one of the most coffee consuming nation all around the

world. Poland invested funds received from the European Union in its roads and highways, and this
investment turned out to be a crucial step: the country now has a good infrastructure that enables
efficient and affordable transport services. It helps the business in smooth running. Different factors
that can be beneficial in opening the coffee shop in Poland are-
 cash incentives- different business acquires support of fund for various projects, for
introducing the new investment for setting up employee training.
 Tax exemption- the Poland have the policy of tax exemption and deduction, that helps the
company in research and development.
 Loans- different terms of loans provided to the new business by different companies in
order to run their new business on new and upgraded technology. Coffee business requires
coffee making machines of high technology which can be purchased through the term loans
(Nghiêm-Phú, 2022).
Marketing mix in relation to the coffee shop
Marketing mix refers to a set of measures or tactics that a company uses to promote its brand
or product in the marketplace. The 4 Ps form a typical marketing mix of price, product, promotion
and place. Nowadays, however, the marketing mix increasingly includes various other Ps such as
packaging, positioning, people and even politics as important unifying elements. The marketing mix
is known as the collection of marketing tools, decisions, and policies that the company uses to
pursue its marketing goals in the next target market. The marketing mix claims that its four
components are strongly interconnected, having been credited with the entire product. It acts as a
link between the organization and customers (Farag and Johan, 2021). Its main goal is to satisfy the
customers by offering the best quality products at reasonable prices. Offers commercial companies
the ability to identify customer needs and environmental factors change, so does the marketing mix.
The marketing mix is a changing concept. Its direction is to satisfy customer needs. If the customer
needs to change, the marketing mix will change as well. The marketing mix is fundamentally
customer-centric. The marketing mix of coffee business helps in determining the competitiveness in
the market of Poland. Creating the marketing mix of it helps in coffee shop to stay competitive in
today's world even the market is huddled by big businesses. The coffee shop market is full of
competition. Big stores and local stores try to compete for the same customers. If you have a
marketing mix in play and review it regularly, that can help in generating enough traffic for your
business to thrive in Poland (Myllymäki, 2022).
The 4 elements of coffee shop marketing mix are given as product, price, place and promotion.
When they each used together it helps the Hank Marvin and patty smith to attract new customers
and loyalty development with existing customers.

 Product- The foundation of any business is its product. Product is anything that can be
offered to the customer to satisfy their wants and needs. The coffee is considered the main
product in the coffee shop business. The business should provide high quality of products to
their customers in order to get their attachment. The coffee shop by Hank Marvin and patty
smith can offer its new market based customer the high quality of coffee and other sub
products such as cappuccino, latte or tea.
 Price- the price of any product play a key role in attracting the customers. Different business
provide its customers high quality of products with reasonable prices. The strategy used by
them is that reduce the cost of manufacturing and not increase the margin on the product to
gain the market base. Marvin and smith must use relevant pricing strategy. They can offer
the best quality of coffee to the client in the reasonable prices so as to attract the new
customers in the nation.
 Place- place is any point where goods and services are available to the customers. The place
is not simply finding the geographical area that fits in the budget. The place play a very
crucial role in the establishment of coffee shop. If the coffee shop will be in the urban area
than it must be difficult to attract large number of customers but if the coffee shop present in
the mall, shopping complex, in front of colleges or schools in Poland that it will
automatically attain the new customer base (Martínez, 2021).
 Promotion- The promotional element of the marketing mix is to make customers aware of
the product and persuade them to buy it. This is a feature that informs and empowers
customers. The promotional mix includes advertising, personal selling and promotional
decisions. Pricing strategy will drive promotions of business. The most important thing in
the coffee business is promoting the business through different mediums such as
advertisement, social media, etc. Promotion helps in gaining competitive advantages in the
market. It helps in increasing the sales and also build a good reputation of business in the
market.
Factors to be considered in establishing the coffee shop in Poland
In context with the coffee shop to be established in Poland by Marvin and Smith, their are
some factors to be considered in expanding the business in that nation are followed as:-
 Finance and accounting- this factor play a very crucial role in the establishment or running
of any time of business. Finance stands for the activities that are linked with the banking,
leverage, debt, credit, capital market and many more (Gelb and Friedman, 2021). Finance helps
enterprises to determine the fund present. It helps in establishing company and expending of
it. The most important aspects to open a coffee shop is finance and accounting. Finance can

help the shop in establishing the business, purchase land, capital assets and other assets.
Without finance, a company cannot run. Coffee shop requires different types of highly
innovate technological coffee making and other machines. These machines can only be
purchased if the shop owner have sufficient amount of finance. As Poland is a developed
nation. The establishing of new business there can be easy. An entrepreneur can open the
enterprises with sufficient fund. Hank and patty has total of £100,000, £50,000 each. The
fund is generated by them through their friends, family and other personal loans. This
amount is much sufficient for him if they open the coffee shop in the country where
developed country like Poland. There will be some financial issues and challenges arrive to
Hank Marvin and Patty Smith while establishing coffee shop such as limited cash flow, not
using budget system, not prepared for the unanticipated expenses and many more. And these
issues can be resolved by using proper budget system and by reducing other expenses. The
accounting also plays an important role in the running of business properly. Accounting can
be defined as the systematic record of all financial things and record them in the books(Luo,
2021). A shop must have to maintain their accounting records every year that helps in
identifying the profit and loss faced by him. Hank Marvin and Patty Smith have to maintain
all records of accounting because they help in identifying the expenses done by them in the
coffee shop.
 Marketing -Marketing can be defined as the function and process of creating,
communicating and delivering value to customers. Marketing is everywhere in business.
Marketing not only helps in generating demand for a particular product, but also in
increasing the company's sales, which eventually increases the company's valuations.
Marketing play a crucial role in the increasing the sales of the company. A coffee shop must
market their products and services in order to increase the sales and valuation. Marketing is
important for the coffee shop business as it allow to share the products and services with a
niche audience strategically in the market of Poland. Marketing is very essential for the
coffee shop because it tells people what product you are offering, it helps in knowing what
types of target audience you have, it helps in building the trust and it helps in business
growing (Lim, 2021).
Explain the business according to the ratios calculated and evaluate the
performance and how it helps the company is their expansion plan.
Profitability Ratio: This helps in determining the efficiency and effectiveness of the business
activity of an organisation which helps in generating income.
Gross Profit = Gross Profit / Sales *100
= 208000 / 360000 * 100

= 0.57777 * 100
= 57.77%
Net profit = Net profit / Sales * 100
= 26800 / 360000 * 100
= 0.07444 * 100
= 7.44%
Liquidity Ratio: This ratio helps in determining the sum available in the business to pay off
its current liabilities.
Current Ratio = Current Assets / Current Liabilities
= 35400 / 6200
= 5.71: 1
Liquid Ratio = liquid Assets / Current Liabilities
= 27400 / 6200
= 4.42: 1
From the above calculated ratio it can be concluded that the firm is earning a significant
amount of gross profit but the operating expenses of the firm are pretty high which reduces the Net
profit of the organisation. It can be ascertained from the ratios that the company has more than 5
time of its current liabilities to pay off its current obligations of the business concern. Liquid ratio of
the concern is also 4 times of the current liabilities of the firm.
The organisation needs to work on reducing its operating expenses which will increase the
profitability of the company. It states the company is incurring a huge sum of money on its
operating expenses which is increasing the price of the product of the business. This causes the
reduction of net profit of the business. Organisation’s stock is comparatively low which further
increases the liquidity available in the business.
CONCLUSION
From the above text, it has been concluded that Poland is the best place for expanding the
business established by Hank Marvin and Patty Smith because approximately more than 75%
citizens of that nation prefer coffee in their daily life. The country is established in the central
Europe and has a mixed economy. Marvin and Smith’s coffee shop has a strong ethos of promoting
fair trade and equality and expect their staff to respect and value these notions and to encourage and
establish such posture and activeness in the work. Different elements of marketing mix have been
explained that can help them in gaining the sales and market valuation. These elements are price,
product, place and promotion. The prices of the coffee must be reasonable to the people in order to
sustain the expanding business of coffee shop. They must have to provide best quality of coffee to

their customers to gain competitive advantages. There are two factors such as finance and
marketing that Hank Marvin and Patty Smith must considered as they play important duty in the
expansion of business.

REFERENCES
Camargo, B.A., 2022. The Expansion of MexHospitality: Exploring the Ethical Implications of
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finance. Journal of Corporate Finance, 67, p.101879.
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expansion of a trademark. Business Horizons, 64(5), pp.575-585.
Lim, W.M., 2021. A marketing mix typology for integrated care: the 10 Ps. Journal of Strategic
Marketing, 29(5), pp.453-469.
Luo, Y., 2021. Boundaries of Microfinance: A Case Study of Microfinance Business of CD Finance.
In Inclusive Finance in China (pp. 27-74). Palgrave Macmillan, Singapore.
Martínez Delgado, G., 2021. The Network Era: Public Services, Big Business and International
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purchases. International Journal of Internet Marketing and Advertising, 16(1-2), pp.81-97.
Trejo, L.A., 2022. Power Shift: Analyzing the Changing Role of Public Relations in the Marketing
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Palgrave Macmillan, Cham.