42 – Planning For Growth

42- PLANNING FOR GROWTH

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Task- 1.............................................................................................................................................1
P-1: Key considerations for evaluating growth opportunities.....................................................1
P-2: Ansoff's growth vector matrix..............................................................................................3
Task-2..............................................................................................................................................4
P-3: Sources of funds, their benefits and drawbacks...................................................................4
M-2...............................................................................................................................................6
Task- 3.............................................................................................................................................6
P-4: Business Plan........................................................................................................................6
Task- 4...........................................................................................................................................10
P-5 Exit and succession options for the small company, their pros and cons...........................10
M-4.............................................................................................................................................12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Small and medium business enterprises are one whose number of employees, capital and
the revenue earned is below a particular threshold limit which is specified by the laws of
particular company. For the incorporation of a new business idea, prior the market research has
to be conducted which shows the growth opportunities, competitor analysis and the business
objectives of the company. The project shall be highlighting the growth opportunities in the
catering business by applying the Ansoff's growth matrix. It shall be discussing the various
sources of finance and the pros and cons that are attached with it. Apart from that it shall also
suggest the appropriate source of funds that the business should use to finance its operations. The
report shall be demonstrating the business plan that the company must apply in order to achieve
its organizational objectives. Lastly it shall be reflecting the options to exit or for the succession
of the catering business.
MAIN BODY
Task- 1
P-1: Key considerations for evaluating growth opportunities
The competitive advantage that can be gained in an industry among the other rival firms
can be assessed by the different techniques like the porter's generic strategies and the external
environment analysis by applying the model of PESTLE. Once competitive edge is generated it
is easy for the company to acquire the market share and maximize the profitability of the
company.
Porter's generic strategy Cost leadership strategy:- This strategy is focusing on leading the market by lowering of
the costs or reducing the profit margin of the company (Islami, Mustafa and Latkovikj,
2020). Decreasing the cost should be related to operational efficiency, better technology,
improved logistics and distribution system etc. Differentiation:-Differentiation is with respect to products and services that are offered
by the company. It can be in quality, quantity, packaging, features, technology etc. This
can be attained with research and developmental work, effective marketing tactics etc.
This helps the company in surviving in the highly competitive market (Hales and
Mclarney, 2017).
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 Focus:- The focus strategy caters to the niche market segment and targeting their specific
needs, the goods are sold at the unique selling point (Abdolshah, Moghimi and Khatibi,
2018). It can be applied with regard to the cost as well as the product of the company
where market share can be capitalized on the basis competitor analysis.
The catering business that has been planned to be incorporated in the market shall gain
competitive advantage by following the differentiation market strategy. This is because its
selling goods at high prices with higher quality so it can differentiate the goods at the similar
price to capture the market (Mungai and Ogot, 2017). Differentiation can be by changing the
menu, customizing the food as per the guests, better garnishing and specialization in a particular
meal.
PESTLE Analysis Political- The political instability in the market relating to the government rules and
regulations, policies, tax amendments etc. will affect the market of the new business. The
updates on the health rules and regulations is also a concern for the catering businesses.
They have to comply with these guidelines which lays additional cost burden. Economical- The interest rate, inflation rate, growth rate, personal disposable income are
some key economic factors that shall impact the business operations of a company. If the
interest rates are high the borrowing cost shall be more which shall then decrease the
scope for planning expansions (Perera, 2017). If the inflation rates are high then the cost
of purchasing raw materials shall be increased, ultimately making it less attractive for the
customers. Social- The social factors can be the trends that are followed in the market which are
based on the lifestyle changes of the people. The culture, traditions, norms, beliefs are
certain elements that affect the profitability of the business. For example the health
consciousness and the dietary restrictions nowadays are leading great impact on the
business. The businesses are bringing healthy products free from fats to meet the needs of
their customers. Technological- The technological advancements and the automation of the processes has
forced the companies to install the newer technologies and also train the employees to
operate them. This has simultaneously increased the costs and the turnover ratio of the
company.
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