Business is a effective measure which is uses as primary tools for an organisation to trade their products and services to various customers. It is one of the crucial elements of modern era in which there is consistency among every day manufacturing of products as per the need and demand of customers. Through this, company would be able to increase their business in every part of their nation. As mentioned in the case of Hank and Patty that they wants to expand their business at other places. They are mostly looking for European nation to enhance their customers base through offering appropriate quality of coffees to them. The project aims to make proper analysis about strategies to be implemented for the purpose of expanding their business. France is being selected as the suggested international market for both the persons coffee shops. Henceforth, the available market potential and suitable strategies for an organisation in the target market would be analyse under this particular report (Anderson, Sweeney and Williams, 2011).
1: Selection of appropriate place for opening of new coffee shop in France
According to provided case about Hank and patty those are operating together for increasing their business operation in so many year which is dealing in food and catering sectors. However, they want to select more appropriate option to run their business in large scale for this purpose they are searching for the market place which would provide more effective chances for increasing their overall performance during the time. It is necessary aspects which is having massive growth within very limited period of time to determine, unique theme, customers services and other facilities to focus on fair-trade in case of Hank and Patty coffee-outlet. This must be stand out for all competitors those are present in UK market. The enhancement of consumer preferences of both the parties and their positive impression on global visitors in the UK indicate potential aspects of an organisation to attain better outcomes in near future. They have invested a total of 12 month for searching and making vital planning regarding their coffee-outlet (Bradford, 2015).
In accordance to this, so many crucial steps are also being taken such as capital investment, location, target market and vital suppliers and competitors for their products. Opening of new coffee shop in the France is more vital decision-making which will be more gainful for Hank and Patty. This would be happens to be primary motive of them to enhance maximum attention of customers at large scale. This has been done because plenty of visitors are visiting to the nation for the purpose of roaming around. They need to search regarding all those factors those are affecting the productivity as well as growth for the company. The EU nation which is been suggested for global expansion for Hank and Patty is France and there are different valid reason for this type of decision. The lifestyle and culture of France people are main aspects for recommending this particular nation as the most effective potential market place for both of them (Burke and Friedman, 2011).
According to their tradition, French people prefers to spend their leisure time in afternoon with having coffees with popular snacks and friends. As per this, their continuous consumption rate is much higher with 150 litres as compare to wine and other kind of drinks. Fair trade is highly precedence in almost every product those are related with the France due to their choice and demand of domestic customers. The coffee warehouse within the country are have to attain over their domestic currencies. However, huge investment would be made for fair trading of coffee which is having plenty of chances to increase the sell of coffee businesses within that particular nations. It is necessary to gain customers loyalty which would be primary aims of the company by maintaining more effective relation with them. The billing of invoices and crucial payments are said to be more appropriate so that chance of mistakes can be controlled during the time. It is required to make proper dealing with as compare to face competition and to make innovative ideas to make use of their products and services which will be helpful in providing more effective quality to them (Cavusgil, Rammal and Freeman, 2011).
2: Marketing mix related with their coffee-outlet
It has been observed that, both Hank and patty need to search their business growth opportunities by making appropriate market research. As according to the mentioned information they are looking of 12 month for a effective place that can be more suitable for them to open their business in near future. They are having valuable amount of information regarding every market situation which will be related with setting up of their own business. The selection of France is an utmost import potential decision for Marvin and Smith coffee shop has justified in the above segments of the report. Thus, this particular section of report has been utilised to formulate a suitable marketing mix planning for an organisation to follow for expanding in their suggested new market.2: Marketing mix related with their coffee-outlet
4Ps of Marketing mix
Strategies suggested for Hank and patty for their coffee-outlet
The most important part of coffee served in Hank and patty shop is their appropriate quality because of the use of best quality beans of Gumutindo coffee. Thus, the cafe is suggested for retaining their culture to purchase these coffee for serving their customers with wide and quality of coffees. The innovation in products would be made in France which is based on hank and patty coffee shops with offering snacks.
They are having only Four coffee-outlet all are situated in London which is having certain limits regarding their brand recognition in global market. Henceforth, there are different old age coffee shop that are consider to be primary competitors of them. In accordance with competitive pricing policy they need to be more effective planning for an organisation to gain initial standard cup of coffees price is £ 1.40.
The chosen market destination from Hank and Patty coffee shop in France. There are various reason for selecting this particular city as the market place for the organization are discuss underneath:
The oldest cake market within the nation is having large number of opportunities for the cafe to implement most preferred types of flavour cake in the menu.
High visitors those are collected during normal day time.
Basic popularity is one of the most popular tourist destination within the nation.
According to Hank and patty, as they are going to open their first coffee-outlet in France. Thus, the organisation require effective target on their techniques of promoting their business. There are various sources such as Television, social media and hoarding would be most suitable promotion sources for Hank and patty. The organisation should also present image of fair trading efforts and effective consumer facilities.
3: Implication that are being deal with Hank and Patty
There are various implications that are needed to be faced by Marvin and smith coffee shops to cover wide geographical areas for their operations that consists in UK and France are mentioned underneath:
Organisational culture: This particular impacts Hank and patty coffee-outlet in unique as the organisation is mostly being focused on various factors such as fair-trade, customer conveniences and France theme. Non-discriminating work environment and common respect of every customers is one of the primary vision of Marvin and Smith coffee shop. The shared value is playing an eminent role in formulating valuable factors those are related with an individual and team member to offer best quality of products to their customers (Guffey, and Loewy, 2012). It is an innovative impacts through using predominant culture of an organization. This has been related with certain aspects for making changes for an organisation to develop an effective business environment that is being faced by both Hank and Patty in their specific business which is operating in France.
The culture which is present in France is different from the UK. This will makes the task of expansion of their business operations by Marvin and Smith's of their coffee shop in France is more tougher. It is difficult for them to work in new country with same organisational structure which reduces their capacity about attraction of the large number of customers through providence of effective business operations in more appropriate manner. It is noticed that optimum support of staff is not ensured regarding the activities of Marvin and Smith which impacts their ability regarding fair trading of their business operations. Hence, it is the duty of the management is to effectively manage organisational culture in France which contributes in effective providence of business functions at different regions.
Gaining competitive advantage: Another major implication which is faced by Marvin and Smith's coffee shop in context of their expansion in France is that they are not able to take the gaining competitive advantage because of large number of competitors are present in France. There are many old cafes and present in market which are popular and already attain the trust and loyalty of customers. Still there are many significant chances for Marvin and Smiths is to compete in market because they use finest Gumutindo coffee beans. The old cafes which are working in France knows the taste of customers and have the large experience in making of tastiest cakes as per their preferences. In this regard, management of Marvin and Smith's cafe need to adopt innovative techniques and popular approaches which helps to grab the attention of customer through providence of their diversifies products. Adoption of affordable pricing policy and providence of beneficial offers works as the positive side for Marvin and Smith's cafe in attraction of new customers and ascertain their trust towards their services.
4. Analysis of the impact of profitability and liquidity on decisions in Marvin and Smith's coffee shop
Funds plays an important role for accomplishment of the business objectives. The main objective of Marvin and Smith's coffee shop is to expand their business operations in new country in which they required huge amount of funds as investment. To ascertain the financial position of cafe need to analyse their past year financial data. In this regard, need to calculate their profitability and liquidity ratio for ascertaining their impact on the decision regarding expansion of their business in France (Lamb, Hair and McDaniel, 2011).
Analysis of profitability ratio
Gross Profit = 208,000
Net Profit = 26,800
Sale = 360,000
Gross profit Margin
Gross profit / Total Sales *100
Net incomes / Total Sales *100
Gross profit: It is important ratio which helps in ascertaining the profitability which is associated with business project. This can be calculated by dividing the gross earning of organisation with total number of sales. Through evaluation of this ratio, financial strength of organisation is ascertained. In 2016, Marvin and Smith's has gross profit margin is 57.78%. It shows that sufficient amount of funds are present with the management of cafe to expand their operations in France.
Net profit: The net profit ratio is calculated after dividing the net earning of organisation with the total number of sales amount. It helps in calculation of actual earnings from their business operations. In the end of 2016, the net profit ratio of Marvin and Smiths coffee shop is 7.44%. It shows that the performance of cafe is good in UK and earning sufficient amount of funds.
ROCE: It is known as return on capital employed. Through calculation of this ratio, organisation is able to understand their capacity about attainment of return from their capital investments. It is calculated by dividing the net operating profit through subtraction of the amount of current liabilities from its total asset value. In 2016, it is observed that the ROCE which is attained by organisation is 25.09%. This shows that cafe is attaining positive return prom their capital investments (Patten and Newhart, 2017).
Analysis of liquidity ratios
Current assets / Current liabilities
Liquid assets / Current liabilities
Current ratio: The current ratio which is ascertained by organisation through dividing their current assets amount value by the amount of current liabilities. In 2016, the current ratio which is ascertained by Marvin and Smith's was 5.71. It shows that large number of assets are available in present with cafe for expansion of their business operations in France. This will helps the organisation is to grab the large number of opportunities in more appropriate manner (Sundareswaran, 2011).
Acid test ratio: This ratio is calculated by dividing the amount of liquid assets from the amount of current liabilities. For ascertaining liquid assets need to subtract the amount of inventory from current assets. It shows about the long term assets which are available with the organisation after elimination of inventories. In 2016, Marvin and Smith's quick ratio was 4.42. It shows that large number of long term assets are present which can be used in international expansion (Tyson, 2014.).
As per above analysis of report, it is resulted that the France has become more approachable potential and first international market place to be targeted by Marvin and Smith's coffee shop. Populated and famous country is opted to open new coffee shop in France. There are some major reasons are defined in this context which were associated with opening the branch in France. First of all the destination and location are analysed in respect of attain customer interest. This will not only help to boost the economic structure of organisation but also helps to provide employment to the people of France. There are some essential elements are considered in before setting up the plan of coffee like norms, legislations, policies and legal structure of France. Customer interest and preferences are also some major aspect which are important for the growth of coffee shop.
A management case study sample.
Better convenience facility and approachability is also one of the essential aspect which is required to analyse future growth and development of coffee shop. Marvin coffee shop is one of the popular brand in US and managers are trying to expand the scope in France. Performance of organisation is also observed in terms of financial and profitability terms. Variety of foods and products are defined in this context. Sweet cakes, chocolates and different type of beverages are speciality of Marvin Coffee shop. Competitive pricing, integrated promotional strategies and the effective marketing plans are some essential aspects which are considered in before setting up new coffee shop chain in France. Market position and positive aspects are considered in this context which need to analyse. Trend and culture of public of France in terms of analysing the interest of customer also done in this context. Profitability and liquidity of organisation is also analysed in subject to support decision making and strategic planning process. International business market is analysed in terms of expanding the business in France. Entire report will help managers of Marvin coffee shop to expand the business in France.
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|Business Case Study Of Marvin and Smith's Coffee Shop