Marvin and Smith Case Study

The situation is even messy for businesses dealing with consumable and perishable products. These businesses usually face an uphill task trying to penetrate new markets whose buyers have totally different cultural beliefs. To face the existing competitors with confidence, such businesses require a devoted management to dominate the new market. Marvin & Smith’s desire to expand their coffee shop to Sweden will be a daunting task but nevertheless, with sufficient capital and favorable prevailing conditions in the country, the business has good prospects to take off. The choice of Stockholm City, Sweden is driven by its strategic location, sufficient infrastructural facilities and the deep coffee-drinking culture known as Fika among the Swedes. more than the 15 main EU nations (Schön, 2016). The status of the Swedes economy implies that the citizens have a high purchasing power.

Despite of being mapped as one of the world’s 20 biggest coffee drinkers, Sweden has not been penetrated by some of the world’s renowned coffee companies such as Starbucks. Thus, Marvin & Smith are not likely to face any completion from an established coffee firms in Sweden. Logistical considerations Sweden has one of the best logistics in the Scandinavia and in the European Union because of its strategic location. These trade fairs can partner with their fair-trade counterparts from Uganda to develop better and negotiable terms. The significance of harmonizing these two fair-trade arrangements is empower the Ugandan traders earn independent incomes while at the same time running their farms. Another one of the critical ethical considerations is the quality of the coffee beans supplied. Marvin & Smith must ensure that the coffee products supplied from Uganda are of high quality with desirable and unique taste.

Besides, Sweden is one of the EU countries with most appealing labor laws (Valls, Sureda & Valls-Tuñon, 2014). kr (Sweden Krona). A cup of coffee in Stockholm City is higher compared to other European Union cities and thus Marvin and Smith will not be operating on loss. The duo can then regulate the prices slowly as the business grows. In overall, the prices adopted by Marvin & Smith should be slightly lower than the prevailing prices of the competitors. Place The most visited place in Sweden by tourists is Stockholm City and it is the appropriate place to locate the new coffee shops. Implications of Covering a Wider Geographical Area Expanding the coffee business to Sweden implies that Marvin & Smith have to hire more employees, improve their supply chain management as well as their service delivery.

These changes will have a profound especially on the management structure as well as the gaining of the competitive edge of the coffee shops. Impacts of Wider Geographical Coverage on the Management Structure Businesses have the habit of adopting unique management structure which best suits their unparalleled needs. Marvin & Smith’s move to expand their business operations to Sweden will significantly alter the management structure to accommodate the new layers of management. The number of employees will increase which implies new training, hiring of new staff and promoting other employees to fill the new positions. Impact on Competitive Edge The coffee shop is already a brand in the UK with excellent customer rating. Sweden is a bona fide member of the European Union which implies Marvin and Smith will take the advantage of the free entry and exit from the market to grow the business.

One of the key sources of competitive advantage will be lowering the operation costs. Marvin and Smith will transmit these home advantages to the Swedish market. Maintaining the coffee prices at slightly lower than the competitors will attract more customers and ultimately drive more sales than the competitors. These figures represent an increase in profits by large margins which is a sign of tremendous positive progress in the coffee industry. Marvin and Smith’s coffee cafés are performing impressively at the home market. The stable financial feasibility is an indication of the ability to sustain an expansion to overseas markets such as Sweden within the European Union. Analysis of the Net Profit The revenue earned by a business after subtracting all depreciations as well as business expenses constitute a net revenue.

Base on the disclosed financial statements of Marvin and Smith’s coffee shop, 26,000 Euros was made as the net profit in the period ended 31st December 2016. The ratio shows that the business is profitable. Analysis of Current Ratios Current ratios and other ratios are of paramount importance to the health of a business. When a business has sufficient liquidity, it demonstrates the ability to meet its financial obligations while poor liquidity implies the inability to pay creditors when the money is due. The liquidity of a business is determined by solvency ratios such as acid test and current ratio. The significance of such ratios as current ratio is that they tell whether or not a business has a sufficient current assets to cover the current liabilities (Wilkinghoff, 2009). Sweden being one of the countries in the European Union that advocates for fair trade and labor laws, it will champion the overall labor rights and provide a conducive environment for the business.

The marketing g mix of Marvin and Smith’s coffee shop has to be unique from that of the competitors. The coffee from Gumutindo Coffee should be of high quality with natural East African flavors and be served in different forms: black coffee, white coffee, ice cold or hot. The price of the coffee should be slightly lower than that of the competitors to drive more sales. Furthermore, the choice of the place where the business should be located is strategic, allowing direct freights of visitors and suppliers and facilitating the delivery of the coffee supplies. Dept. I. M. F. E. eblib. com/choice/publicfullrecord. aspx?p=4544877 (Accessed: 03/06/18). Eckes, A. E.  Urban Transport Development: a Complex Issue. Dordrecht, Springer-Verlag Berlin and Heidelberg & Co. KG. Available at: http://public. eblib. King & Son. Reider, R.

 Developing successful business strategies: gaining the competitive advantage. Available at: http://portal. igpublish. University Press. Valls, J. F. Sureda, J. Valls-Tuñon, G.