Planning for Growth

This document discusses key considerations for examining growth opportunities within an organizational context, opportunities for growth by applying Ansoff's Matrix, potential sources of funding available to businesses, and a business plan for Don't-Look-Further Catering Services (DLFCS). It also includes a SWOT analysis and PESTLE analysis for DLFCS.

PLANNING FOR GROWTH

Table of Contents
INTRODUCTION...........................................................................................................................1
1: Key considerations for examine growth opportunities within an organisational context........1
2: Opportunities for growth by applying Ansoff's Matrix...........................................................3
3: Potential sources of fund available to businesses and its advantages and disadvantages........4
4: Business plan for Don't-Look-Further Catering Services (DLFCS)........................................5
5: Succession or exit options for small businesses....................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Growth planning define when owner make strategic business plan and track organic growth in
revenue. It is business strategic activity and allows businesses to allocate their scarce resources
towards a centred effort to adapt to changes in business. This study is focus on Don't Look
Further Catering Services which is own by Margaret Millions. Company is situated in
Lincolnshire and provide services for event planning and meets clients to plan details for party.
This report elaborate key growth opportunities with justifications through applying Ansoff's
Growth vector matrix. Further, report discuss about various sources of funding available to
businesses along with its drawbacks and benefits. A detail analysis of business plan is made for
company. Lastly, report analyse succession or exit options for small businesses.
1: Key considerations for examine growth opportunities within an organisational context.
There are various growth opportunities which an organisation can consider in its operations.
Following paragraph will provide various considerations for growth that DLFCS can use in its
business:
Competitive advantage – Porter five forces:
Porter five forces is an important tool for understanding the competitiveness for business
environment and helps in identifying strategy for profitability. Main element use in Porter five
forces are:
Buyers power - Buyers power is high for DLFCS This factor is affected by number of
customers a company has significance of each customer. It also examine how company find its
new customers and cost initiated with it. If DLFCS has strong customer base then its easy for
each customers to negotiate for lower prices with good deals (Bruijl, 2018). For example,
company must lower down prices for its products and services to target more audiences.
Supplier power - Supplier power is medium in this industry. It is affected by number of
suppliers of main inputs of particular products and services. This factor may affect business
operations in supplying goods, services and employees. Company decides on various supplier
such as broker and other companies. Supplier power can become threat to profitability of
company.
Competitive Rivalry – It is generally high for DLFCS. Rivalry is increases because of changing
behaviour of consumers and increasing prices of commodities. For instance, there are number of
restaurant available in same cities that provides same services.
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Threat of substitution - It is low in food industry. Customers have challenges when looking for
specific options for catering services. This industry remain change their prices which linked with
various levels of services and many facilities (Isabelle and et.al 2020).
Threat of new entry - It is usually low. As this industry require huge cost of investment that
includes modern equipments and strong marketing.
PEST analysis -
Political – Government has imposed several regulatory framework for every aspect of food and
service industry. Hence, this industry should maintain commercials kitchens, standards for
storing and transporting produce.
Economical – Growing disposable income will make upper and lower middle to spend on
luxurious that also includes restaurant and food industry. This bring positive impact to all SMEs
including food distributor and individual workers (Maisyaroh, Sutopo, and Rasli, 2017).
Social - Consumers are now knowledgeable about their dietary restrictions and healthy living.
Therefore company should produce foods that are gluten free and consider to add more natural
ingredients.
Technological – Advancement of technology will bring more growth opportunities for SMEs.
For example, for fast venues company can use self check out screens and utilize social media
platforms for marketing (Barbara and et.al 2017).
BCG Matrix :
This method help business in making long term planning and to identify growth opportunities
through reviewing portfolio of its services and products. Following are main elements that
company can use:
Cash Cow – Low growth and high market share. In this method, products have been in market
for some time. For example, if company opening a new product for first time than its growth
would probably be slow but after few year company experience increase in its sales as it has high
market share.
Stars – High market share and High growth. In this strategy, company require ongoing
investment to sustain in market. For example, DLFCS can earn potential growth in revenue in its
food and catering services as it requires high market share and investment (Torquativ and et.al
2018).
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Dogs – Low growth and low market share. As it contains low market share, its difficult for
company to increase its profits.
Questions mark – High growth and Low market share. Company can avoid this method as this
may not always succeed. Even if company make huge investment, it may not be able gain its
share of market (Mohajan, 2017).
From all above method, DLFCS must use Stars method as it allows company allow to earn
huge money because it gain as much market share as possible.
2: Opportunities for growth by applying Ansoff's Matrix.
Ansoff's Matrix is a useful tool for business to analyse market trends and plan strategies
accordingly for growth. Lets discuss more in detail about essential elements of Ansoff's Matrix:
Market Penetration
In this strategy, firm usually uses its existing goods and services in existing market. DLFCS
use this strategy in various ways like company can increase promotion, lower down its prices so
that it attracts new customers. In market penetration, company offers goods but in a different
way (Tsatsoula, 2018). For example, DLFCS can bring more hygienic food products in order to
strong its customer base.
Product Development
In this approach, company bring new goods in existing market. In this method, company can
use following strategies like they can make product by obtaining competitors goods for example,
DLFCS can bring no heat cooking products in food industry. Company must invest in research
and development like they can make improvement in their websites or its social media presence.
Market Development
In this strategy a company can enter into new market with its existing goods and services.
DLFCS must enter into a new customer segments and geographical regions. It can be sometimes
risky for company as it involves extreme research whether it matches with customer taste or not.
However, risk can be curbed when company make investment in those market where disposable
income is high that is potential consumers is profitable in market (Gurcaylilar-Yenidogan and
Aksoy, 2018) .
Diversification
This contain huge risk as in this approach a company enter into new market with new products.
Although this strategy is riskiest from all, however risk can be minimised somehow with
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associated diversification. There are two forms of diversification that DLFCS must utilize.
Related diversification in which company needs to realize potential synergies like catering
producer can enter into providing food services at weddings. Another is unrelated diversification
in which company can enter into market with no potential synergies like DLFCS can starts
manufacturing electronic items (Loredana, 2017).
DLFCS must use product development strategy as it contains no or low risk associated with it
and company can increase its profitability.
3: Potential sources of fund available to businesses and its advantages and disadvantages.
There are various ways that SMEs can utilize it in order to raise its funds. Below paragraph
will provide more detail about this:
Crowdfunding
In this method, company can raise its funds with by raising small sum of money through
maximum number of people. Crowdfunding can benefit company in getting huge sum of money
as it increases attention on social media platforms, which can help company to grow beyond. On
the other hand, if it's target amount unable to reach its limit then potential investors get their
money back (Lee and Shin, 2018).
Peer to Peer lending
With peer to peer lending, company acquire funds directly from an individual and cutting out
financial institutions. P2P lending websites directly link borrowers to its investors. P2P lending
generally has low interest rate because competition is huge among lenders. While, credit risk is
usually high in peer to peer lending. Company apply for P2P do not have any government
protection or insurance in case of borrower's fraudulent and default.
Bank loans -
It is most common form of capital for business. Company can take fund from bank in exchange
for repayment of loan amount with interest. Bank loans provide flexibility to companies as bank
will not provide set of rules that how a company will spend money. However, bank loans are
really time consuming process as company will require to fill out huge paperworks and term of
interest is also very complicated (Lee., 2018).
DLFCS must use Bank loans in order to fulfil its requirement for funds as bank loans have
cheapest source of interest as compare to other types of high interest loans.
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4: Business plan for Don't-Look-Further Catering Services (DLFCS)
Aim:
Become one of the biggest player in online food delivery services along with developing more
customer satisfaction.
Objective:
To raise sales of ready to eat food by 50% end year of 2021.
Situation analysis:
It refers to analysis of situation or analysing strength or weakness along with a broad
analysis of external environment that could affect business and its activities. It can be performed
by two ways:
Internal analysis:
It refers to analysing the internal situation or capabilities of the company. It is very
essential to have a knowledge about own strength and weakness so that future opportunities can
be grabbed and threats can be mitigated. It can be done by:
SWOT analysis:
Strength:
It refers to company's capabilities or positive factors which company can use to meet the
market competition along with accomplishing its own objectives (Vlados, 2019). Handling big
orders, providing the best quality products and services, managing big events, are some strengths
of DLFCS.
Weakness:
It refers to loopholes or negative factors that could affect company and its business at a
broader scale. High prices, less expansion, slow move towards technological advancement are
considered as weakness of the DLFCS.
Opportunities:
As a post Covid impact there are ample amounts of opportunities that could rise in the
near future regarding catering and food industry. DLFCS being a dealer of catering business can
grab these opportunities with a wide expansion of its business.
Threats:
It refers to all those impacts that could affect the business of a company. It is very
essential to analyse these threats in advance so that their impact can be reduced to certain extent
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(Phadermrod, Crowder and Wills, 2019). Threat in the form of changing trends and raising more
consciousness about prices may be considered harmful for DLFCS. However, DLFCS by using
its strengths can minimize this threats.
External analysis:
It refers to analysing external environment or its changes. These changes have severe
impact over the company. Although these are uncontrollable but with the adoption of certain
strategies companies can reduce their bad impacts. It can be performed by:
PESTLE analysis:
Political:
This factor includes all those political changes in the form of changing policies or rules
and regulations of the country. It also includes influence of political parties or political situation
of the country. Since, DLFCS deals its business in Lincolnshire so it is also very essential for it
to operate and plan its business activities in the abidance of prevailing policies of the country.
Otherwise, it may face major impacts in the form of affecting its sales and operations.
Economic:
It includes all economic changes that may occurs in the country. It includes changes in
economic policies, changes in rates of interest, employment, investments and various other
(Elmansy, 2019). As, DLFCS is planning for expanding its business with a variety of new
product and new mode so it is very essential for it to analyse this force and act accordingly. As
every business expansion requires an appropriate percentage of money then it also raises
importance to look towards any changes in interest rates.
Social:
This is one of the major environment which is required to be evaluated before making
plans for further expansion. Since every company perform its business to serve its customer so it
make it more necessary to have a look towards customer's taste and preference and accordingly
make and raise production of goods. With raising more awareness towards health and hygiene,
DLFCS also have to be cautious about this demand while dealing its business.
Technological:
Changes in technology is also very essential to be notices and adopted while operating
business operations. This not just for being technologically advanced but it is also essential for
gaining competitive advantage along with reducing cost of operations with the use of advanced
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technology (Story, 2020). DLFCS being dealing directly with its customers if it explores and
advanced its technological adaption then not only its efficiency of working but its success and
growth will also take place.
Legal:
It refers to legal rules and laws that every company have to comply while continuing its
business and expanding its business in some other place. Since DLFCS has to plan to explore
different market and indulging into a new product line then it becomes very important for it to
study and follow all legal compliances before initiating and run its businesses.
Environmental:
Only operation of business and achievement of objective is not enough for the companies
they also have to take care about the environment and comply environmental laws (Helmold,
2019). DLFCS also have to be careful that while operating its business it has to give equal
consideration towards environment apart from its own goals. For that it have to take appropriate
steps in the form of adopting concept of sustainable use of resources so that not only the current
need of people but future need of people will also meet.
Competitive analysis:
With the analysis of internal and external environment it is also essential to have a
knowledge about intensity of competition and competitive strength in the market. DLFCS also
have to look and consider competitive analysis before expanding its business in other market or
to deal in current market. It can be executed by:
Porter's generic strategies:
It is one of the best model to grab competitive advantage along with grabbing a particular
segment of society. Applying this model into business by DLFCS will help it in becoming a
market leader along with beating market competition. According to this model DLFCS may
follow any of these strategies:
Cost leadership:
It refers to grabbing a big share of market by becoming a cost leader. This means selling
good quality product but at low prices (Cavaleri and Shabana, 2018). DLFCS can become a cost
leader not only by sacrificing its profit percentage and availing its product at low cost. It can also
adopt such policy that its cost of production will reduce without having any impact over its
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profit. It will not only help it in meeting market competition but it will also lead to becoming a
market leader.
Differentiation strategy:
It refers to selling that product that no company in the entire market could sell. DLFCS
can implement this policy by raising quality of its products or raising its brand image or
inculcating such quality or speciality that are not supposed to be existed in its substitute or the
prevailing products (Omsa, Abdullah and Jamali, 2017). This strategy can help it in covering a
big share of market along with raising its sales.
Cost focus and differentiation focus:
It is also similar to above strategies but there is a slight difference in coverage. This
means that DLFCS may also adopt such policy of cost and differentiation focus but instead of
focussing over entire market it will shift and lay its focus towards a particular segment or group
of people. Like as it has planned to introduce ready to eat food then it may focus towards
youngster and service class people.
Marketing strategies:
It is one of the important element of business plan which includes marketing of products.
This has a vital role in the company's sales and profit degrees. For this DLFCS may implement:
Marketing mix:
It refers to a set of marketing tools that company may use in order to accomplish its
objective in the target market (Thabit and Raewf, 2018). It includes:
Product:
It refers to physical goods or any services. DLFCS deals in a variety of high quality
products with a wide range. It is also planning to raise its product by introducing ready to eat
food range.
Price:
Since it is a dealer of high quality product so its prices are slightly high in comparison of
other brands. But with a follower of quality match price concept it can make its own special
place in the competitive market.
Place:
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It includes place of supplying or storage. DLFCS have to consider this factor while
dealing its business. This means it has to point such place where its sales can be raised along
with raising customer's share.
Promotion:
It refers to using promotional strategies and mediums in the form of using advertisement,
social media, electronic media and various other (Ikechi, Chinenye and Chiyem, 2017). DLFCS
also have to carefully plan its promotion strategies so that with having an impact over sales and
profits its product can reach at larger population.
Financial planning:
Without this no company can survive in the market and operate its business operations. It
is considered as an important element in business plan which gives actual speed and execution
power to companies. It also includes arrangement of funds by which companies may raise funds
and run its business. DLFCS will raise its funds through bank loans. Being a SMSE along with
availability of various provisions in favouring of business it will adopt this mode of raising
funds. So that, its requirement along with gaining government's advantage either in the form of
tax deductions or provisions, will be grabbed. The financial plan of DLFCS with an estimation of
cost are as follows:
Expanses Estimated Costs (£)
Advertisement and
Marketing
12000
Rent 35000
Depreciation 45000
Insurance 15000
Additional services 40000
Total 147000
Monitoring and controlling:
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It is a very crucial step of business plan which enables the company to have analysis of
its own performance. This step also allows the company to take corrective actions in order to
remove deviation and loopholes. DLFCS may adopt the practice of Key Performance Indicator
(KPI) in its business operation so that it can measure its performance as per set standards and
indicators (Haber and Schryver, 2019). As per this strategy DLFCS may establish performance
indicators and then measure its actual performance against such indicators. This will help it in
analysing self performance along with enabling a chance to recover and re-correct its loopholes
so that its performance will be maintained at higher grades.
Succession option:
It refers to existing option by which companies can exit from the market in case of arisen
of such adverse situation. If such situation will came then DLFCS will choose liquidation option
wherein by selling its assets it will settle out its liabilities.
5: Succession or exit options for small businesses.
Business owner can make exit strategy in small business. Here are some strategies to small
business to choose from:
Liquidation
This options looks easy to those business owner that are dependent on single individual. As
this is only option as there's nothing to sell. Liquidation is a simple process and business can
quickly close. However, liquidation has low return on investment to owner as only money from
liquidation sale is from disposable of assets (Lindsey,Mauck, and Olsen, 2018).
Sell to another business
Small business owner can position its business to be as desirable acquisition. Business
purchase other business for many reasons like to getting out of competition, using new
acquisition as a way of expansion. It give advantage to owner to earn more profits and making
fast sale. If a purchaser carry motivation to cut down competition then it may close business after
purchase and former workers may lose their job (Karioja, 2020).
Don't Look Further Catering business must selling its business to another party as it is
efficient process and allow company to earn huge sum of money.
CONCLUSION
To conclude, the above report summarised about different growth opportunities with help of
Porter five forces, BCG matrix and PEST as it allows company to set framework so that it
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achieve its long term growth. Further, report discussed how a company grab growth
opportunities and also sources of funds to increase its profitability. Business plan is made with
all necessary guidelines.
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model/>
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