Assignment 1

Hank Marvin and Patty Smith have worked together for years in the food and catering industry and, having the same dream to run their own business, decided to open their own coffee shop. Hank and Patty spent 12 months researching and planning the details of their coffee shop to decide on the best location, who their target market was, how much capital they would be able to raise, key competitors, what suppliers they would use and what products and services they would offer in their coffee shop and so forth. Then in January 2017 Marvin and Smith’s coffee shop was opened in Wandsworth in South London.
In order to stand out from other coffee shops that seem to be flooding the market in London, Hank and Patty decided on the following:
-To use the finest coffee beans from Gumutindo Coffee, a Fairtrade supplier in Uganda that focuses on enabling farmers in Uganda to earn an independent income and to run their own farms, as research had shown that ethical concerns were high amongst potential customers in this location. High quality tea and herbal infusions would also be sourced from Fairtrade registered Foundations in Eastern Uganda and, where possible, East African inspired snacks, pastries and cold drinks (e.g. fresh mango juice) will be offered.

– To offer an environment that is both relaxing with an East African feel to it (to continue the Ugandan influence) as well as being practical for customers’ needs (including access to a power point socket for charging phones/laptops, etc. and free Wi-Fi)

– To ensure that staff (including Baristas) were trained to the highest standard and were offered a wage and development opportunities that were above and beyond their competitors

– To offer themed evenings such as board game night and chat with Nanna (for a chat and advice)
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 beliefs and to promote and demonstrate such attitudes and behaviour in the workplace. Staff are also expected to help out with the themed evenings where applicable such as playing short board games if customers have no-one to play with. These are areas which they highlight during the recruitment process.
Since their initial shop opening, Marvin and Smith have opened an additional two coffee shops in and around London. However, the initial information system that was set up for the coffee shop was only structured and set up to manage the information with regards to one or possibly two coffee shops. Hank and Patty are therefore beginning to realise that this initial information system structure is quickly becoming outdated in terms of their business needs because of their continued expansion. As the demand for their East African-inspired coffee shop with themed evenings increasing and because International tourists have even started seeking out these coffee shops, as they are becoming known abroad, Hank and Patty have decided to focus on an overseas expansion plan.
They have therefore decided to focus on an expansion plan and want to open up one of their coffee shops in a European Union country. However, they are unsure as to which of these countries to expand their coffee shop into and have asked you to carry out and write up your research.
Income Statement for Marvin & Smith’s Coffee Shops’ for the period ended 31st December 2017
£ £
Sales 360,000.00

Less Cost of goods sale
Purchases 160,000.00
Les Closing Inventory (8000.00) (152 000.00)

Gross Profit 208 000.00
Less Expenses
Electricity 32 400.00
Salaries, wages 34 0000.00
Rent and Rates 80 000.00
Telephone 8 400.00
Other expenses 8 000.00
Depreciation Equipment 6 400.00
Depreciation – Fixtures 8 000.00
Depreciation – IT Equipment 4 000.00

(181 200.00)
Net profit 26 800.00

Statement of Financial position as at 31st December 2017 for Marvin & Smith’s Coffee Shops’
£ (Starting value) £ (Depreciation) £ (Ending value)
Non-Current Assets
Equipment 40,000 6,400 33,600
Fixtures and Fittings 40,000 8,000 32,000
IT Equipment 16,000 4,000 12,000
96,000 18,400 77,600
Current Assets
Inventory 8,000
Cash 27,400
35,400
Total Assets 113,000
Capital 100,000
Profit 26,800
Drawings (20,000) 6,800
106,800
Current Liabilities
Trade Payables 6,200
Total capital and liabilities 113,000

Notes
a. Hank and Patty raised the £100,000 capital through friends, family and personal loans. They each raised £50,000 b. The second shop opened after 6 months and the 3rd opened after 9 months. c. Coffee machines and associated equipment cost £5,000. Each shop has two machines d. IT Equipment includes all required Wi-Fi computers. e. The business currently has no formal loans or external debt

TASKS
Answer ALL of the following questions using credible reference sources for every question:
QUESTION 1
1. Austria (1995) 2. Belgium (1958) 3. Bulgaria (2007) 4. Croatia (2013) 5. Cyprus (2004) 6. Czech Republic (2004) 7. Denmark (1973) 8. Estonia (2004) 9. Finland (1995) 10. France (1958) 11. Germany (1958) 12. Greece (1981) 13. Hungary (2004) 14. Ireland (1973) 15. Italy (1958) 16. Latvia (2004) 17. Lithuania (2004) 18. Luxembourg (1958) 19. Malta (2004) 20. Netherlands (1958) 21. Poland (2004) 22. Portugal (1986) 23. Romania (2007) 24. Slovakia (2004) 25. Slovenia (2004) 26. Spain (1986) 27. Sweden (1995)

From the above list of countries which joined the EU on the stated dates above you are to discuss and conduct some initial research into which country could be the one to expand into and then mutually select ONE country that you think Marvin and Smith’s coffee shop should expand into. Justification for your choice of country must be given in relation to factors discussed in seminars and potentially revealed by your own research.
Note that you should assume for the purposes of this assignment that the Brexit negotiations will make no difference to the trading environment as it is at present.

(Approx. 500 words)
QUESTION 2
Present a tailored marketing mix in relation to the coffee shop expansion plan abroad to include:
– Product – tangible (physical goods) and intangible (customer experience). What are your Unique selling propositions(USPs) Price – outline and justify your choice of pricing strategy(s) • Place – justify your choice of physical location for the provision of your market offerings • Promotion – how are you going to raise awareness of your presence in your new market and encourage your target segment(s) to engage profitably with your market offerings

(Approx. 600 – 700 words).

QUESTION 3
For any TWO of the following, identify key factors Marvin and Smith should consider as they expand into an unfamiliar territory and show how arising issues or potential challenges may be interlinked and managed.

a. Human resources management b. Operations/logistics/supply chain management c. Finance and accounting d. Marketing
(Approx. 600 words)

QUESTION 4
Using the financial information presented above, calculate and evaluate how:
2 profitability and 2 liquidity ratios may influence decisions available to them. (Note: ratios will be discussed in detail in class so be sure not to miss that particular session). – what do they tell you about the current business? – evaluate how the calculated ratios influence decisions available to Hank and Marvin and what implications might they have for the expansion plan?

(Approx. 400 words)
QUESTION 5
Write a concluding summary about the overall viability of overseas expansion at this stage.
(Approx. 300 words)

Marking Schema All work will be marked according to the following marking schema:
1. Evidence of research (30%). Have you shown that you have researched around the subject, used appropriate references and have you made use of these sources to inform and enhance your answers? 2. Logical flow and application (20%). Have you addressed all the required points of the task in a logical and consistent manner, demonstrating some ability to apply theory to practice? 3. Explanation and Understanding (30%). Have you shown understanding of the wider business issues affecting Marvin and Smith’s Coffee Shop? Have you explained and justified your answers to an appropriate level? 4. Professionalism (20%). Is your work tidy and well laid out, with appropriate structure and standard of concise and effective written English? Have any diagrams and illustrations used been well chosen and correctly presented and is the work of appropriate length?

Note that you are expected to show you are ready and able to engage with a level 4 degree course so superficial answers will not be awarded pass marks. A good set of answers will therefore be well researched and presented, argued logically and effectively, using examples from credible sources to illustrate your points and referenced in line with the University of Roehampton’s Harvard Referencing guidelines.