Individual Case Study Analysis: Coffee House Expansion in the UK

This case study analyzes the expansion plan of a coffee house in the UK, focusing on the challenges and opportunities of entering a new market. It examines the expansion plan, marketing mix, and the influence on key areas of the business. The analysis includes a comparison with competitors like Costa Coffee, highlighting the importance of adapting to consumer preferences and market dynamics. The study also covers financial information, ethical considerations, and structural changes required for successful business operations in the UK. The document emphasizes the importance of a well-defined management structure, including departments for human resources, marketing, finance, production, and sales. Overall, the case study provides valuable insights into strategic decision-making for business expansion.

INDIVIDUAL CASE
STUDY ANALYSIS

Table of Contents
INTRODUCTION...........................................................................................................................1
1. Expansion Plan........................................................................................................................1
2. Marketing Mix.......................................................................................................................2
3. Influence on two key areas of coffee house when expanding business in UK.......................6
4. Financial Information.............................................................................................................8
.........................................................................................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Expanding business operations plays a major role for the entrepreneur in its growth and
development. It is important for the enterprise to evaluate all the essential factors which can
impact the strategy of organisational functioning. Further, The report will evaluate the plan of
two entrepreneurs for expanding their coffee house in UK. It will evaluate the factors supporting
the expansion plan of two partners and it will assist the company in determining the competitors
of the coffee house that is Costa Coffee which is the leading coffee cafe in United Kingdom.
Moreover, it will outline the marketing mix factors of Hank and Patty coffee house in accordance
to its rivalries. Thus, it will identify influence on two key areas of business and the financial
information which will support the growth of firm in new country.
1. Expansion Plan
Patty Smith and Hank Marvin are working together from past few years. Basically the
focus of partners is to expand the business of their coffee house. Therefore, the partners focuses
on researching about the favourable factors which will assist the business in attaining profitable
returns. Further, after researching for few months the partners opened their coffee house in
South London Wandsworth. The growth of coffee cafe is supported in market as it offers the
quality beverage products to the consumers, like it focuses on using the finest coffee beans from
Gumutindo Coffee and it also focused on serving fresh juices and snacks like, herbal and organic
tea. Apart from t his it offers various extra services to serve consumer satisfaction such as,
power socket for making availability of power to change phones, Laptops, Wi Fi etc. The
organisation has its own differentiated amenities according to other coffee houses on market.
Thus, the partners now are focused on expanding its business into other European country which
can assist the firm in attaining competitive advantage and expanding successful business
operations (Meena and Dhar, 2016).
Logical Considerations: When expanding business considering logically environment
plays an important role in success business operations. Therefore, when Expanding business
Hank and Patty will evaluate the products and services of the leading coffee houses in UK. This
European country holds the biggest advantage over food and beverage industry as the consumers
preferences are based on easily convenience. Further, the partners are focused on employees and
consumer satisfaction because of which the company will gain advantage as the European union
and UK regulations are focused on protecting human rights. All the factors of coffee house
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demonstrate the favourable expansion factors for partners in UK. Moreover, it is logical to
expand business, because the coffee house in UK offers food and beverage expensive as per
consumers demand, therefore the entrepreneurs has the favourable chance to attract consumers
by offering them products at affordable prices.
Structural Change: Negotiation made with Brexit will not impact the structure and
business operations of Coffee house but it is important for the organisation to implement
effective organisation structure in order to implement changes in strategy and functions
according to new market. In addition to this, the leading coffee organisation \in UK like Costa
house have systematic structure in order to make easy flow of information among all the
department which assist the firm in eliminating the chance of risk. Therefore, in accordance to
this, Patty Smith and Hank Marvin will focus on making organisation functional simple and
easier. Apart from this the coffee house will formulate its process in order to make optimum
utilisation of resources and will focus on Waste management which assist the enterprise in
protecting environment and improving efficiency of business operations (Okoro, 2012).
Ethical Consideration: Considering Ethical factors plays vital rile in establishing stable
growth when expending business operations. Further, Ethical consideration assist the company I
determining the right and wrong of the situation which helps the entrepreneur in determining the
effectiveness of strategies. In this, Patty Smith and Hank Marvin will focus on complying with
all the regulation imposed by European union and United kingdom to protect human Rights.
Furthermore, it is important for the partners to consider the policies and procedures of UK which
are formulated specially for Food and beverage industry like, healthy and safe work environment
and consumer protection law. Hence, when expanding coffee house the firm will not degrade the
quality of its coffee beans and fresh juices as the consumer satisfaction will only be earned by
serving quality food services.
2. Marketing Mix
Analysing marketing mix factors assist the Patty Smith and Hank Marvin in determining
the uniqueness of its services and the need of change according to leading Coffee Houses of UK.
Moreover, the marketing mix elements assist the firm in evaluating the effectiveness of its
products and services which act as tonic when expanding business operations. The factors of
marketing mix of Patty Smith and Hank Marvin coffee house are as follows:
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Marketing mix Patty Smith and Hank Marvin Coffee
House
Costa Coffee cafe
Product The food and beverages of partners
cafe comprises organic and herbal
tea, fresh juices and snack and coffee
prepared with the finest quality of
Coffee beans.
Therefore, in accordance to Costa the
entrepreneurs will expand its services
according to needs like Patty Smith
and Hank Marvin will enhance their
own quality of merchandise to attract
buyers attention.
The Costa offers various type of
beverages and snacks and is serving
its food services since ages.
Moreover, it offers various
Merchandise related to food and
beverages which assist the
enterprise in increasing profits.
Place Initially the entrepreneurs will face
limitation due to place therefore,
When expanding business the
partners will focus on establishing its
coffee house at prime locations of
UK in order to attract maximum
population like, in Malls, Near
schools and colleges etc.
Costa is located at all locations and
area of United Kingdom due to
which its has attained competitive
advantage in industry.
Price Patty Smith and Hank Marvin
understands that the consumers are
price sensitive and therefore the
pricing strategy is based on serving
food services at affordable prices.
Further, to overcome the pricing
strategy of leading coffee house of
UK, the partners will use the
competitive pricing strategy in which
The Costa Coffee house holds the
strong control over its pricing
strategy as it offers coffee and other
products by implementing the use
of Psychological pricing in which
the company tricks buyers like, if
consumers expects the price of
specific product to be 1 Pound than
the firm offers that product at .95
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its will offer its food services at
sightly low prices in comparison to
its competitors (Yoo, Donthuand Lee,
2010).
Pound.
Promotion In order to create awareness among
consumers Patty Smith and Hank
Marvin will focus on implementing
the use of every possible marketing
techniques which has been used by
them in London like, advertising on
newspapers, magazines, etc.,
Moreover, the partners will offer
discounts ad schemes to attract more
and more consumers of United
Kingdom.
Costa implements the use of
promotional strategies according to
marketing conditions and consumer
demand. Like increase when the
consumer demands fall rapidly than
the coffee house offers schemes and
discounts on specific food and
beverage for a limited period. This
strategy assists the organisation in
gaining consumers back. On the
other hand when the cafe launches
new beverage or food item than its
focuses on promoting its by
advertisement on newspapers,
magazines, television etc.
People Patty Smith and Hank Marvin
organises regular training and
development session for its
employees to make them awareness
about the new business operations
and to about the appropriate
behaviours techniques to make
consumers comfortable with the
services. The partners hold the
advantage over its employee due to
which it can easily stabilise its
Costa focusses on enhancing the
skills of its employees in
accordance to behaviour with
consumers but at some store of
coffee house some employees have
rude and inappropriate behaviours
towards consumes. On the other
hand the company make use of
technological processing system in
which the buyers do not have to
interact much with staff of the
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business operation in UK. entity.
Physical evidence This plays a important role in
enhancing the food services of
company. The partners focus on
delivering various type of addition
services with food to buyers such as,
power sockets, free Wi-Fi and many
more. This is factor which will
support the growth of coffee house in
UK.
Costa holds strong advantage per
physical evidence as it is located at
all the prime location and has
stability of additional services since
long back.
Process Patty Smith and Hank Marvin Have
to formulate its food and beverage
processing in order to make process
and simple and transparent according
to its biggest rivalry in UK.
Costa offers transparent kitchen
system which assist the enterprise in
serving consumer satisfaction and
gaining loyalty (Borden, 2014).
3. Influence on two key areas of coffee house when expanding business in UK.
Analysing the impacts of new market plays an important role in growth and development
of organisation. Therefore, Patty Smith and Hank Marvin discovered the need of major change in
its management structure and organisation culture which is described under:
Management Structure: In this the partners will formulate it management structure into
functional structure in order to make easy flow of information and services (Huhtala, Feldt and
Mauno 2013). The structure is followed in UK by every company of Food and beverage
industry. In which the coffee hours will divide the functions according to responsibility of
employees which are as follows:
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 Human resource department: This department of coffee house will be responsible for
recruiting appropriate staff according to the requirement of new market. This plays
important role as it will assist the company in determining the taste and preferences of
consumers of UK.
 Marketing department: This department of the Coffee house will assist in evaluating the
needs and wants buyers. Further, it will analyse the strategies and techniques used by
leading coffee houses of UK which will help Patty and Hank in stabilising business
operation in new country.
 Finance Department: This department in coffee house will ensure the easy flow of funds
and will assist the partners in determining the profitable operations (Vogt, 2017.).
 Production department: This department will make changes in food and beverages
according to new market requirement. The employees in individuals are friendly with the
taste required by the consumers therefore the staff is responsible for enhancing
effectiveness in food services of Coffee house.
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Illustration 1: Functional structure
Source: (Organisational Issues, 2017)

 Sales department: This unit will Patty and Hank in determining the consumer demand
and profits of Coffee House. Further, it will assist the coffee house in products pricing
and distribution strategy according to rivalries.
 Customer care department: The executives will focus on dealing with consumers
problems which can be quality, quantity, services and food. It helps the firm in
determining the loopholes and drawback in the food services by Patty and Hank. Information technology department: It assists the company in making use of effective
technology to enhance the value of its food and beverage services. The information
system in an organisation assist the coffee house in making changes according to market
fluctuations in order to satisfy the needs and wants of customers (Dee, Hanslow, and
Phamduc, 2014).
Organisation Culture: It is based on psychological environment of business in which the
company need to focus on its values, beliefs and ethics according to new market requirements
Organisational culture is the major reason which assist the firm in establishing strong market
reputation. Therefore, when expanding Coffee house in UK, Patty Smith and Hank Marvin will
focus on 10 principles of organisational culture which are as follows:
 Implementing values and ethics in services and organisation like the company should not
harm the right of individuals religions by its services there, the Coffee house will have
separate utensils and areas for Non veg and vegetarian food items.
 Internal conflicts of the coffee House will not be reflected in services or to consumers.
 The direction to staff members about their work will be predefined according to their
skills and capabilities in order to avoid the chance of mismanagement (Helo,
Gunasekaran and Rymaszewska 2017).
 Patty Smith and Hank Marvin will focus on training its employees the behavioural
concept in order to serve appropriate services to consumers and to reduce the internal
conflicts between workers.
4. Financial Information
Liquidity: It demonstrates the paying ability for credits and loans of Coffee House,
According to data, Patty Smith and Hank Marvin do not have any pending loans which
demonstrate a growing advantage for business operations.
Current Ratio
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Current asset Current liability
113000 106800 1.0580524345
According to analysis, it has been denoted that the entrepreneurs have the ability to pay
for its credits and have a strong control over investment because the partners resist the credit
taking facility. Hence, the current ratio evaluation implies the positive business operation of
Coffee House when expanding Business in UK.
Profitability: This denotes the company in making evaluation about the profits when
expanding business operation (Tsui, Zhang, and Chen, 2017). Further, in accordance to Coffee
house of Patty Smith and Hank Marvin the net Profit margin ration is,
Net Profit Margin Ratio
Net Profit Sales
26800 360000 0.0744444444
In accordance to analysis, it has been represented that the per unit profits of coffee house
are very less. Therefore, when expanding business in UK the partners can not expect a rapid
increase in its profitability index. Apparently the capital investment power of entrepreneurs is
strong which conclude that the firm will have to make huge investment in order to establish its
functions in UK.
CONCLUSION
The report summarized the Expansion plan strategy of two partners which have
researching for months to expand to business operations. Patty Smith and Hank Marvin, the
entrepreneurs use the finest coffee bean and serves fresh juices and snacks like, herbal and
organic tea in order to serve consumer satisfaction and to gain competitive advantage. Further
the report analysed the expansion plan of partners in United Kingdom against the leading coffee
house Costa. Apart from his the report evaluated the consideration of Patty and Hank which
states that, the European countries holds the biggest advantage over food and beverage industry
as the consumers preferences are based on easily convenience. Further, both will focus on
complying with all the regulation imposed by European union and United kingdom to protect
human Rights. Moreover, at the time of expanding coffee house the firm will not degrade the
quality of its coffee beans and fresh juices as the consumer satisfaction will only be earned by
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serving quality food services. Apparently, the report outlined the marketing mix factors of Patty
and Marvin's coffee house and of Costa, the leading coffee cafe of UK. In addition, it assisted
the entrepreneurs in determining the need of change in organisational culture and management
structure for which the organisation will formulate its structure into functional where all the
department will have its own functioning which will assist the business in establishing smooth
flow of information and services. Hence, the report concluded by determining the financial
information of parties which states that Patty and Hank are capable of paying for loans and
credits but do not have profitable growth.
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REFERENCES
Books and Journals
Borden, N.H., 2014. The concept of the marketing mix. Journal of advertising research. 4(2).
pp.2-7.
Dee, P., Hanslow, K. and Phamduc, T., 2014. Measuring the cost of barriers to trade in services.
In Services Trade Reform: Making Sense of It. (pp. 97-123).
Helo, P., Gunasekaran, A. and Rymaszewska, A., 2017. Improving Marketing and Operations
Strategy Through Industrial Services. In Designing and Managing Industrial Product-
Service Systems. Springer International Publishing. (pp. 37-42).
Huhtala, M., Feldt, T., Hyvönen, K. and Mauno, S., 2013. Ethical organisational culture as a
context for managers’ personal work goals. Journal of Business Ethics. 114(2). pp.265-
282.
Meena, A. and Dhar, J., 2016. An Empirical Analysis and Comparative Study of Liquidity Ratios
and Asset-Liability Management of Banks Operating in India. International Journal of
Social, Behavioral, Educational, Economic, Business and Industrial Engineering. 8(1).
pp.342-348.
Okoro, E., 2012. Cross-cultural etiquette and communication in global business: Toward a
strategic framework for managing corporate expansion. International journal of
business and management. 7(16). p.130.
Tsui, A.S., Zhang, Y. and Chen, X.P., 2017. Successful Business through Moral Conduct and
Integrity. In Leadership of Chinese Private Enterprises. Palgrave Macmillan UK. (pp.
225-237).
Uppal, N., 2016. A study of culture in a non-profit organisation in India: organisational
development and change. Journal for Global Business Advancement. 9(3). pp.215-230.
Vogt, C.P., 2017. Business, Capabilities Theory, and the Virtue of Justice. Handbook of Virtue
Ethics in Business and Management. pp.333-343.
Yoo, B., Donthu, N. and Lee, S., 2010. An examination of selected marketing mix elements and
brand equity. Journal of the academy of marketing science. 28(2). pp.195-211.
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