Marvin and Smith’s investment analysis
Marvin and Smith’s coffee shop is a small business with high prospects for growth. It has already established few branches locally but also aspires to venture into international markets. However, the first priority is within European markets but this requires the critical assessment to come up with the most favorable destination. Venturing into international markets is not a decision that requires a lot of comparative assessment and an effective planning. Expanding into international markets is challenging task for both big and small businesses.
There are important factors that one need to evaluate key among them being the availability of the targeted customer as well as evaluating their needs. This paper examines the most appropriate investment destination for Marvin and Smith’s and the appropriate marketing mix to apply in the first part. The second part discusses some of the implications of its internationalization strategy. There are a number of benefits and challenges that come along with the internationalization strategy. Personnel management and competitive advantage are some of the aspects covered in the second part including analyzing the profit and liquidity ratios of Marvin and Smith’s business. The last part summarizes the entire assessment and offers an advice to the Marvin and Smith’s about the viability of its international investment plan.
Preferred country in Europe Germany
The best country location to situate the Marvin and Smith’s will depend on several factors key among them the region demand for the coffee drink, the coffee drinking culture, demand for ethical sourcing of coffee supply, the income index of the target customer, ease of doing business. First, it is important that the main idea of expanding the Marvin and Smith’s business internationally is to attract new customers with a taste of some of the best products offered by the business (Lewin, Giovannucci and Varangis 2014).
The decision to set a coffee shop is therefore driven by the availability of target customers in the region. In Germany, people have a high demand for coffee and keep seeking more information on some of the best coffee shops offering the unique flavors and diverse categories of coffee. Generally, Germans are high demanding coffee beverage consumers and it is their most preferred beverage consumed daily. Germany demand for coffee is very high and on average 8.5 million tons of coffee annually (Johnson and Turner, 2015). It’s among the highest consumers of coffee beverages in Europe. It consumes more coffee as compared to Sweden, Spain, Netherlands and und United Kingdom. This makes Germany one of the best countries in Europe to set up a new coffee shop due to its high demand for coffee beverages.
Germans have also a good culture that favors coffee drinking especially due to their insatiable demand for specialty coffee. Although there may be a percentage of Germans looking for cheaper coffee a great percentage especially from high-end consumer segment are willing to pay more for specialty unique coffee products. Locating the Marvin and Smith’s coffee shop in such region can help market its unique blended coffee products that will invite the new customers in the business. The potential customers in the German high-end consumer segment can afford higher prices which will increase the profits margin (Gmbh, 2009).
German consumers are also very sensitive on promoting sustainable sourcing of coffee. They have a high demand for ethical coffee. They are very selective and only prefer coffee certified coffee products from the fair trade certified suppliers. Sustainability standards is a very important factor that is considered for entry into German markets. This makes the country the most favorable investment destination for Marvin and Smith’s coffee shop since its supply sourcing of the coffee products is sustainable. Owing to the fact that the coffee shop promotes sustainable supply source with ethical considerations and offers east African inspired unique products it’s likely to have the best competitive advantage in Germany (Jolliffe, 2010).
Another consideration that makes Germany the most preferred for the Marvin and Smith’s coffee investment is the ease of doing business in the country. Germany is placed in position seventeen globally according to t
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