Business Plan Case Study

Reality depending on café culture, coffee consumers and their lifestyle Germany is the most recommendable country to establish the coffee shops. It is categorized as one of the best in the international tourists’ destination in the European continent. According to research by Bekker, the country has “deep coffee café culture” and is ranked as the third largest market for marketing coffee products after Brazil and the United States (Bekker, 2007). Further, the country has registered high consumption of coffee compared to alcohol and water, proving that Germany is a perfect market for coffee café. The increased coffee craves in the country is concentrated among the young people who are frequent coffee drinkers. Further, Germany has modern airports that have extensive spaces of aircraft landing and highly trained security staff making it safe and admirable place from the clients and coffee imported from Uganda.

Logistics: Depending on place of operation, supplies, and consumers The supplies of coffee via fair trade can be easily delivered in Germany without any delay because of the direct freights of Cargo from Uganda to Germany. The country has numerous and easily accessible areas where clients can use GIs technologies to locate. Therefore, consumer preferences and demands can be addressed conveniently at any given time. However, the only difference between Germany and the United States is just location and language spoken. The slight increment in prices will guarantee that their coffee shops survive the initial waves of the market in Germany. For instance, assuming that a cup of coffee goes at 3 euros I the UK, that price can be reduced to 2.

5 euros in Germany market and increased to around 3. 3 euros in the United Kingdom. Entering the Germany market with high-quality products and subsidized prices will increase the chances of attracting more customers and then start regulating the market prices slowly once the business becomes established (Tankersley, 1990). The ultimate promotional strategy can be achieved through holding conferences, partnering in business workshops, online advertisements and taking part in local events in the society. It is the responsibility of business culture to provide themed evenings through games such as chat with nana and board game. Also, the themed nights would be discounted for the first group of customers to entice more consumers (Bowman & Gatignon, 2010). The coffee shop will pick up faster and start enjoying significant profit margins because of reduced prices of commodities and discounted services.

Implications of expanding the coffee business to a broader geographical area The decision by Marvin and Smith to expand their coffee shops to foreign countries implies that they will be forced to advance their channels of delivering services, ordering of more supplies and increase the number of employees. The process of the branding of the café’s name and making it global will be prioritized. Such process will involve operational customer care delivery to ensure ease of communication during service delivery. The process of purchasing and marketing can also be effected through online platforms and consumables taken to consumers through a door-to-door delivery instead of operating in the shops. Therefore, Marvin and Smith’s business will assume the responsibility of senior chief executive officers and hire two more managers, one based in Germany and the other in the United Kingdom.

The other responsibility of the two managers will be control business risks and assure a balance between the production cost and all expenditures to the earnings accumulated by the shops. Such a strategy will make their business in Germany popular, resulting in increased profit margins in the long run. Today people don’t like wasting their time and the “unique themed evenings” will attract most customers because of its convenient and timely services. All these factors will guarantee favorable competitiveness of the business to the extent of outsmarting the present coffee shops in Germany market. Evaluate how their profitability may impact on disposable decisions Gross profit The “Marvin and Smith’s coffee shops” do not have external dents or formal loans to settle.

Also, the business achieved big margins of gross profit. The business employs solvency ratios such as acid test, quick or current ratios. The function of current ratio is comparing “current assets to current liabilities” by dividing whereas the “quick ratio” determined by getting division of current assets with current liabilities and the other one is “working capital”, but it does not take part in businesses’ inventory. Therefore, Marvin and Smith’s coffee business stands a better position of expanding using financial ratios because all of them portray a positive financial image. Considering the financial reports for Marvin and Smith’s business for the fiscal year 2015/2016, their business has enough funds to expand its operations in a foreign country. Its PESTEL and SWOT analysis indicates that the business has favorable operational terms and if proper management strategies are put in practice, the business can make a lot of profits.