Reference no: EM131871147 , Length: word count:1750

Business Essentials - Assignment

Elma Filiz and Henry Smith having 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. Elma and Henry 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 2015 Filiz and Smith's coffee shop was opened in Islington in North London.

In order to stand out from other coffee shops that seem to be flooding the market in London, Elma and Henry decided on the following:
- To use the finest coffee beans from the Fairtrade Growing Women in Coffee Foundation in Kenya which focuses on enabling female farmers in Kenya to earn an independent income and to run their own farms (Fairtrade, 2015) 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 the Fairtrade Foundation in Kenya

- To offer an environment that is both relaxing with a Kenyan feel to it (to continue the Kenyan 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)
Filiz 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, Filiz and Smith's have opened an additional three 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. Elma and Henry 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 Kenyan 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, Elma and Henry have decided to focus on an overseas expansion plan.

Elma and Henry 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 Filiz & Smith's Coffee Shops' for the period ended 31st December 2015

	£	£
Sales		360,000
Less Cost of goods sold
Purchases	160,000
Less Closing Inventory	(8,000)	(152,000)
Gross Profit		208,000
Less Expenses
Electricity	32,400
Salaries & Wages	34,000
Rent and Rates	80,000
Telephone	8,400
Other expenses	8,000
Depreciation - Equipment	6,400
Depreciation - Fixtures	8,000
Depreciation - IT Equipment	4,000
		(181,200)
Net Profit		26,800

Statement of Financial position as at 31st December 2015 for Filiz & Smiths 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. Elma and Henry raised the £100,000 capital through friends, family and personal loans. They each raised £50,000
b. The second shop opened after 6 months, the 3rd and 4th 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

Answer ALL of the following questions

1. Research and decide on a country (within the European Union) that Filiz and Smith's coffee shop could expand into. Justification for your choice must be given regarding choice of country, logical considerations, ethical considerations and the structural challenge of expanding into that country.

(Approx. 400 - 450 words)

2. Present a tailored marketing mix in relation to the coffee shop expansion plan abroad.

(Approx. 300 - 350 words).

3. What are the implications of the need for Filiz and Smith's to cover a wider geographical area in terms of a different country? Consider any impact this may have on any two of the following and show how these issues are interlinked:

a. Information systems
b. Organisation culture
c. Management structure
d. Gaining competitive advantage
e. Personnel and managing staff issues
f. Supply chain
(Approx. 250 words per each point)

4. Using the following financial information, evaluate how their profitability and liquidity may impact on decisions available to them.
(Approx. 300 - 350 words)

5. Write a concluding paragraph about the overall viability of overseas expansion at this stage.
(Approx. 150 words)

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