The case study explains about a coffee shop which would be run by Hank Marvin and Patty Smith. Hank Marin and Patty smith are already running coffees shops in Wandsworth in South London. The Hank Marin and Patty smith evaluated the market and did a great research on the market for 12 months to start the coffee shop and along with the time, they opened three other coffee shops in the London. It has been evaluated by the partners that the foreigners also like their products and due to it, the footfall has been increased in the restaurant. Thus, they have made a decision to open a new coffee shop in the European Union. The study on the new shop in European Union has been studied in the report.
Country and shop analysis:
The case explains that the Hank Marin and Patty smith are evaluating the European Union to enter into. The European Union is an economical and political union of 28 countries which is located in the Europe. The European Union have been studied and it has been found that Austria is among the best option to open the new coffee shop. Austria has been chosen among the 28 countries due to various economical factors and the internal position, culture, changes, taste and the demand of the Austrian people. It has been measured that the economy of Austria has been improved by 0.8% from last quarter in March 2018 and the overall economy of the company has been improved by 1.2% in 2018 (Trading economics, 2018).
Further, it has been measured that the political stability is there in the market. The people from Austria are connected to their culture and they believe in the values. In addition, it has also been studied that the cultural food of Australia is quite amusing and liked by everyone (Focus economics, 2018). Still, the people from Australia like to taste the different cuisine and taste. They love to do experiment with their food and they also looks for a peaceful and spotty place to hang out. The coffee lovers are also in huge number in the Austria.
All of these are few points and the examples due to which the Austria has been decided in order to open a new coffee shop in the European Union. The case explains that the raw material for the coffee and other products are exported by the company from Uganda. And the logistic consideration of Austria explains that the raw material could easily be transported into Austria market without any damages to the material and in lesser time and lesser cost (Agility logistics, 2018).
The material would be delivered by the Uganda farmers through sea ways to Australia which would be easily transported to the new coffee shop of Hank Marin and Patty smith. It has also been studied that no unethical involvement would rise in case of opening a new coffee shop in Austria market (OECD, 2018). The culture and the people of Austria have been studied and it has been measured that the ethical policies of the country are quite huge. The people of the country are not involved in huge crimes as well as the ethical policies of the coffee shop and the Austria are quite similar and better which explains that if the Hank Marin and Patty smith’s coffee shop would be opened in the Austria market than the overall position of the company would be improved.
The Hank Marin and Patty smith have further studied that it is not easier for an organization to enter into the foreign market. A business has to follow some legal factors and the policies to enter into the foreign market. On the basis of the study on Austria market, it has been studied that the Hank Marin and Patty smith could tie up with a local coffee shop or the firm to enter into the Austria market and set up the business (Entri consulting, 2018). On the basis of the overall study over the European Union, it has been measured and found that the Austria is one of the better countries to expand the business and the coffee shop without any further risk.
Marketing mix of coffee shop:
Marketing mix is a set and structure of marketing process which is used by the companies to achieve the common goal of the company and grab the target of the company. It refers to a broad level of marketing decisions which mainly includes the place, price, promotion and the product. The marketing mix of the coffee shop of Hank Marin and Patty smith have been studied which are as follows:
Product:
A product is a product or the item which is produced or built by the company to satisfy the demands and the needs of the certain group of people who are the target customers of the company. In case of Hank Marin and Patty smith, it has been found that the main products of the coffee shop are coffee. The business has focused on the quality of the coffee and for it; they are exporting the products and coffee material directly from the farmers from Uganda (Best, 2012). The company is also offering the herbal infusion, east African inspired snacks, pastries, cold drink and the high quality tea to satisfy the need of the customers.
Price:
Price of a product is the total amount which a customer’s pays to enjoy the products and the services of a particular company. In case of Hank Marin and Patty smith, it has been found that the prices would be decided by the company on the basis of the penetration strategy. The business has focused on the market and has decided the price on the basis of that. The company has managed the price in such a way that people could attract towards the company and the overall cost of the company could be enhanced.
Place:
Placement or the distribution is a crucial element of the business which defines the marketing mix of an organization properly. In case of Hank Marin and Patty smith, it has been found that the business is planning to set up the business in the Austria and the material is exported from the Uganda farms. The logistic process of the company has been set up in a proper way as well as the services have been provided by the company from the cafe which is at very convenient place. The company has managed the logistic and the place in a well manner (Hollensen, 2010).
Promotion:
Promotion is amongst the very important component of the marketing mix. Promotion includes the various elements such as sales organization, advertising, sales promotion and the public relations. In case of Hank Marin and Patty smith, it has been found that the business is promoted by the company on the basis of the fair trade and the ethical practices of the business. It has also been studied that the overall marketing mix of the company would be quite impressive and would assist the company to reach over a common goal.
Implications of the coffee shop:
Implication study has been done further to measure the need to cover a huge geographical area for Marvin and Smith. The organizational culture and the management culture have been studied to conduct the study.
Organizational culture:
Organizational culture includes the expectations, philosophy, experiences and value of the business to enhance the internal operations and the overall position of the company. Organizational culture of an organizational mainly bases on the vision, values, systems, symbols, assumptions, habits etc. Business leaders and the entrepreneurs of a business are required to evaluate and measure all the related aspect of the business and other factors of the business to manage overall position of the company.
On the basis of the organizational culture, it has been studied that the main focus of the business of Marvin and Smith is on fair trade, quality and the value proposition of the company. It has been studied that the organizational culture of the company is quite strong and the organizational culture has been build up in such a way that all the employees of the company could be motivated as well as they could enhance the overall operations of the company (Mullins et al, 2010).
The company has planned to manage the organizational culture in the European Union as well. The company has focused on all the factors which are involved in the organizational structure at right now. Further, it has been measured that the main factors of the organizational culture of Marvin and Smith are fair trade, quality and the value proposition which would help the company to raise the overall performance and the position of the company. The employees of the company would be trained to follow the organizational culture and maintain the overall position in better way. It would help the business to meet the common objective and manage the performance of the business.
Management culture includes the policies, rules, methods etc to manage the operations and the activities of the business to enhance the internal operations and the overall position of the company. Management culture of an organizational mainly bases on the ethical norms, human resources, beliefs, attitudes etc. managing the business by culture involves various management activities, positive changes in culture etc. which helps the company to manage the operations in an effective and efficient manner.
On the basis of the management culture, it has been studied that the main focus of the business of Marvin and Smith is on managing the ethical norms, human resources and the leadership process in such a way that the entire business could be run with the culture of the company (Kotler, 2015). It has been studied that the management culture of the company is quite strong and the management of the company has been build up in such a way that all the employees of the company could be motivated as well as they could enhance the overall operations of the company.
The company has planned to manage the culture in the European Union as well. The company has focused on all the factors which are involved in the organizational structure at right now. Further, it has been measured that the main factors of the management culture of Marvin and Smith are ethical norms, human resources, organizational structure, attitudes which would help the company to raise the overall performance and the position of the company. The employees and the leaders of the company would be managed the operations and the culture and maintain the overall position in better way. It would help the business to meet the common objective and manage the performance of the business.
Financial evaluation study has been further done on the foreign entry expansion plan of Marvin and Smith. The overall profitability position and the liquidity level of the new project have been measured to identify the overall financial performance of the business in the new market. On the basis of the given profit and loss a/c and the balance sheet of the company, it has been measured that what would be the overall profitability and the liquidity position of the company. It has been found that the overall gross profit of the company is 57.78% which would be similar in Austria as the raw material would be delivered from the same place and the logistic charges are also similar (Gapenski, 2008).
In addition, the profitability position of the new business has been measured on the basis of the net profit of the business. Net profit explains about the total profit in context with the total sales of the company. On the basis of the net profit % evaluation, it has been found that the overall net profit of the new business would be 7.44% (Higgins, 2012). On the basis of the profitability position, it has been measured that the new business would be able to generate huge profit from the Austria market.
|
Profitability ratios |
|
|
Net profit |
26800 |
|
Sales |
360000 |
|
Net profit % |
7.44% |
|
Gross profit |
208000 |
|
Sales |
360000 |
|
Gross profit % |
57.78% |
(Madhura, 2014)
Further, On the basis of the given balance sheet of the company, it has been measured that what would be the liquidity position of the company. It has been found that the overall current liquidity ratio of the company is 5.71 which is quite higher than the ideal ratio and explains that the company could easily repaid all the short term debt as well as working capital of the business is also more than the requirement (Moles, Parrino and Kidwekk, 2011).
In addition, the liquidity position of the new business has been measured on the basis of the quick ratio of the business. Quick ratio explains about the total quick assets in context with the current liabilities of the company. On the basis of the quick ratio evaluation, it has been found that the overall quick position of the new business would be 4.42 (Lumby and Jones, 2007). On the basis of the liquidity position, it has been measured that the quick liquidity position is quite higher than the ideal ratio and explains that the company could easily repaid all the short term debt as well as working capital of the business is also more than the requirement.
|
Liquidity ratios |
|
|
Current assets |
35400 |
|
Current liabilities |
6200 |
|
Current ratio |
5.71 |
|
Current assets – inventory |
27400 |
|
Current liabilities |
6200 |
|
Quick ratio |
4.42 |
(Lord, 2007)
On the basis of the financial evaluation on the business, it has been found that the financial position of the business would be better in the Austria market.
Conclusion:
On the basis of the overall study on the new business plan of Marvin and Smith, it has been found that the Austria is one of the better countries to expand the business and the coffee shop without any further risk. The economical position and the industry position of the business are also strong. It has also been measured that the logistic consideration and the ethical consideration of the company would also be better in the Austria market as the raw material is supplied from Uganda and Uganda could easily supply the material to Austria.
Further, the marketing performance and the marketing feasibility of the new business plan of Marvin and Smith has been studied and it has been measured that the overall marketing performance of the business would also be better and the company would be able to grab more market share in the Austria. It has also been found that the marketing strategies of the company would also be competitive.
The further study on the financial position of the new business has been studied and it has been measured that the liquidity and the profitability level of the business would also be strong. The implication study also briefs that the operations and the activities would be managed in better way in Austria market. The overall study and the evaluation of coffee shop of Marvin and Smith in Austria explains that the business would offer great returns to the company and would make it easier for the company to meet the objective of the company.
References:
Agility logistics. 2018. Market entry. [online]. accessed from: https://www.agilitylogistics.com/EN/countries/Pages/Uganda.aspx (Available 17/6/18).
Best, R., 2012. Market-based management. Pearson Higher.
Entri consulting. 2018. Market entry. [online]. accessed from: https://www.entri-consulting.com/en/market_entry (Available 17/6/18).
Focus Economics. 2018. Austria. [online]. accessed from: https://www.focus-economics.com/countries/austria (Available 17/6/18).
Gapenski, L.C., 2008. Healthcare finance: an introduction to accounting and financial management. Health Administration Press.
Higgins, R. C., 2012. Analysis for financial management. McGraw-Hill/Irwin.
Hollensen, S., 2010. Marketing management: A relationship approach. Pearson Education.
Kotler, P., 2015. Framework for marketing management. Pearson Education India.
Lord, B.R., 2007. Strategic management accounting. Issues in Management Accounting, 3.
Lumby,S & Jones,C,.2007. Corporate finance theory & practice, 7th edition, Thomson, London
Madura, J. 2014. Financial Markets and Institutions. Cengage Learning.
Moles, P. Parrino, R & Kidwekk, D,.2011. Corporate finance, European edition, John Wiley &sons, United Kingdom
Mullins, J.W., Walker, O.C., Boyd, H.W. and Larréché, J.C., 2010. Marketing management: A strategic decision-making approach. Boston: McGraw-Hill.
OECD. 2018. Economical survey. [online]. accessed from: https://www.oecd.org/eco/surveys/Austria-2017-OECD-economic-survey-overview.pdf (Available 17/6/18).
Trading economics. 2018. Austria GDP growth. [online]. accessed from: https://tradingeconomics.com/austria/gdp-growth (Available 17/6/18).
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