Planning for Growth in Aroma Cafe: Key Considerations, Ansoff Matrix, Funding Sources and Business Strategies

This report discusses the growth plan for Aroma Cafe, a formal British coffee chain, and evaluates various aspects such as key considerations for evaluating growth opportunities, Ansoff matrix, potential sources of funding, and business strategies. It also includes a discussion on competitive advantage, core competencies, and resources. The report provides insights into the market penetration, market development, product development, and diversification strategies for Aroma Cafe. Additionally, it discusses equity crowdfunding, bank loans, and friends and family as potential sources of funding with their benefits and drawbacks. Finally, the report includes a business plan that includes financial objectives and strategic objectives for Aroma Cafe.

Planning for growth

Table of Contents
INTRODUCTION.....................................................................................................................................3
TASK 1.......................................................................................................................................................3
P1. Key considerations for evaluating growth opportunities...................................................................3
P2. Evaluate the opportunities for growth with and an application of ansoff matrix...............................6
TASK 2.......................................................................................................................................................7
P3. Potential sources of funding with its benefits and drawbacks............................................................7
TASK 3.......................................................................................................................................................9
P4. A business plan that includes financial objectives and strategic objectives.......................................9
TASK 4.....................................................................................................................................................10
P5. Assess exit or succession options....................................................................................................10
CONCLUSION........................................................................................................................................12
REFERENCES........................................................................................................................................14
Books and Journals:...............................................................................................................................14

INTRODUCTION
Planning is a key to any organisation through its existence. Any organisation which is
successful regularly analyses its business plan which ensures the continuity to meet the demands
of customers. It is significant to review the current performance and looking forward the likely
strategies in order to grow business. Growth plan is also important in allocating resources which
help to attract new funds in order to maximize the chances of success in other market as well.
Planning for growth supports in realistic vision for the future of the organisation as well as
increase the potential for growth (Bailoa, S. and Cravo, P., 2020). It is involving with stepping
back from regular options and looking for where an organisation is headed and what should be
priorities. The report is going to prepare on the Aroma Café which is identified as formal British
coffee chain. It was introduced by Michael Zur Szpiro in 1991. They are specified with tea,
coffee, and pastries. It was introduced in London, UK. It belongs coffeehouse industry. This
report is discussing various topics such as key considerations for evaluating growth
opportunities, apply with Ansoff’s matrix, sources of funding and many more. When a business
wants to take decision on expanding it is consisting with risk that come with growth
opportunities so it is very important to identify what it exactly needs to grow and how it will get
that expansion or growth opportunities.
TASK 1
P1. Key considerations for evaluating growth opportunities.
It is very significant to evaluate what a business owner want to consolidate in their
position of business and find methods to grow. If they want to succeed they must prioritize with
growth which is considered with growth plan (Claassens, J., Koomen, E. and Rouwendal, J.,
2020). It has its own risk but the effective and right strategy can deliver security, stability as well
as long-term revenues and profits for the organisation. In addition to Aroma Café, it is very
significant to manager to focus on growth plan which is needed for the growth perspective. There
are two situation through which an entrepreneur can consider and analyze the growth
opportunities in order to expand their business in global market with the porter's generic method
and pestle analysis.
Porter’s generic method:
Porter’s generic strategy helps to gain competitive advantage in the market. It includes four
strategies in order to gain a certain level of growth which helps to improve the profits for the
organisation.
The first strategy is Cost leadership which allows organisation to keep the prices of its
operations low and achieve more market share. It can involve those leadership styles in terms of
cost in which it can lead the market or an industry. Being low cost producer is not good enough it
is also considering with great risk factors where there is a chance that competitive can reproduce
the cost reduction strategies of a company. In addition to Aroma Café, it is significant to find
methods in order to reduce the cost.

The second one is differentiation strategy which is all about providing unique and
innovative products and services in the target market. Aroma cafe like to make their products and
services unique and different from other brands which involves durability, features, support,
functionality as well as brand image.
The focus strategy has been classified into two parts which are cost focus and
differentiation focus. Cost focus strategy is similar as a cost leadership strategy but it mainly
focuses on niche market. Along with this differentiation focus strategy is similar to
differentiation strategy but it focused on distinct niche market. In context to Aroma café, the
focus strategy will serve better in the market and they like to build their positive brand image and
brand loyalty in the market.
PESTLE Analysis:
Pestle analysis is a framework which is used by experts in the organisation to analyze the
external factors of company. The result of pestle analysis is also help an organisation to identify
its strengths and weaknesses. In addition to Aroma Café, the framework of aroma café are
discussed below:-
 Political factors: Political factors are concerned with government through which an
organisation wants to spread its business activities in a specific country. They are
required to collect information about government policies such as labour rate policies,
regulations of that particular country.

 Economic factors: Economic factors is significant to business it is related with business
operations which shows how an organisation is profitable (Ehler, C., Zaucha, J. and Gee,
K., 2019). It includes interest rate, exchange rate, disposable income of customers,
economic rate and so on.
 Social factors: Social factors are based on belief, trust and attitude of the society of a
particular country which includes population growth, distribution health consciousness,
and attitudes towards career and so on.
 Technological factors: Technological factors are concerned with technologies that are
practicing by an organisation in order to advertise their products and services in the
particular market (Erfani, T., Pachos, K. and Harou, J. J., 2020).
 Environmental factors: These factors related with environment of the society which
includes sustainable way of conducting business, increasing scarcity of raw materials,
ethical rules which set by government population target and so on.
 Legal factors: It involves with legitimacy of a specific country which includes laws
related with humans, advertising standards, equal opportunities, health and safety,
product labelling etc. An organisation must be clear about local laws and regulations in
order to avoid any legal issues regarding trade.
Competitive advantage: It is very significant for the managers in any organisation to formulate
business plans for growth which can be considered as a strength for competing in the target
market. The competitive strategy needs to successfully assist all activities which is related to
management in order to identify a new methods or ways that increase the competitiveness to
hold a growth position that enhance customer base and impactful understanding of the market
along with the capturing various growth opportunities and exploration (King, H. and Wachs, M.,
2020). When an organisation gains competitive benefits in market that highlights a successive
position which differentiate it among other competitors so that a customer can prefer.
Core competencies: It is very vital for the organisation to consider all the factors which are
involved in business plans. The core competencies of an organisation is skilled and talented
employees who focus on delivering the high quality service to the customers in a unique and
innovative way. In addition to Aroma café, core competencies can also be considered as the
strength of the organisation which offers a foundation from which a business will grow, deliver
significance to customers and grab new opportunities. These core competencies of Aroma cafe
can be also understood as distinctive competencies which also supports and sustainability of an
organisation in order to gain competitive benefits.
Resources: These are the very necessary elements of an organisation which are required to
consider by designing a business plan which is focus on business expansion. Resources are
essential because it is required as an input for completing a task or a project and for
implementing strategies in the present scenario. In addition to Aroma cafe, resources and
capabilities are the sources of competitive benefits and chief source to earn more profit for the
organisation. This allows an organisation to face competition and drive the business with their
goods and services or whatever their offering are for the requirements of customers.

Business strategies: It is very essential for manager of an organisation to include every strategy
which can make the plan more productive and effective for the company. Nowadays the focus is
on corporate social responsibility is rather than consumer is a profitability which leads to offer
them positive image in the minds of customer as well as in market. Other strategies which may
be related to improvising the aspects of business such as offering several benefits to the
customers as well as employees that results are strong relationship and benefits the organisation.
P2. Evaluate the opportunities for growth with and an application of ansoff matrix.
Ansoff matrix is a great tool for planning which supports an organisation to understand
the expansion and growth of business. In addition to Aroma cafe, this matrix are considered with
products and services as well as market.
 Market Penetration: Market penetrations defines to sell existing product into existing
market to the existing customers in order to enhance brand loyalty and achieve customer
for lifetime (Maguire, K., 2019). This method helps to improve their strategies which
supports an organisation to expand their market share. Market penetration may be done
through reducing the prices in order to achieve a greater number of customers or may
accept promotional or distribution strategies.
 Market Development: It is referred with existing product but into new market which
includes different geographical regions in order to develop and enhance market for the
business profits and with an intention to gain more customer for the organisation. Within
addition to Aroma café, they are likely to develop marketing channels to advertise
existing products. Aroma cafe may choose one of the best option such as in order to enter
the domestic market or wants to expand its business internationally.
 Product Development: This is considered with creation of new product in the existing
market with an intention to sale to the existing customers which increase effectiveness

and productivity for the organisation. In addition to respective organisation they are focus
to add different features and characteristics to its services that will help to increase brand
loyalty with their innovation and modification in their services. In addition to Aroma
café, this strategy can be implemented in different ways such as make an investment in
R&D in order to create new goods to cater to the present market, acquiring the products
and merging the sources of competitor in order to develop a new product that better meet
the requirement of present market.
 Diversification: This can be taken as a risk strategy for the organisation because they
develop new products to the new markets with a purpose to grow their business. Aroma
cafe are flexible to adapt changes in order to introduce new products and services in new
markets because they are very opportunistic. With reference to Aroma café, the
diversification strategy may provide a potential in order to increase the revenue as it
opens up te wholly new profit stream for the organisation.
It has been evaluated from the above strategies for Aroma Cafe is that they are ready to take
advantages with new risks in order to expand their business in the new place so that the
diversification strategy is most appropriate for the organization (Nguyen, N. H., 2020). They are
likely to face and adapt changes so it will work for them.
TASK 2
P3. Potential sources of funding with its benefits and drawbacks.
Starting or expansion or growing business small business requires money to start. There
are various potential sources of financing which a business owner may explore from his own
pockets for short-term and fast financing to bank approved lines of credit that provides long term
funds. In context to Aroma café, it is better to understand it with its advantages and
disadvantages in order to gain short term and long term sources of finance.
Equity Crowdfunding: Equity crowdfunding is also known as investment crowdfunding or
crowd investing, which refers to a method to increase capital which is used by association
(Sherman, H. D., 2020). In context to Aroma Café, it offers the securities to companies with the
number of prospective investors in exchange for funding. It takes place on a crowdfunding
platform in which the business owner create an online profile which is consists with their pitch
and the detailed information about business such as business history or financial statements
which helps investor to calculate growth potential.
Pros:
 There is no need to put the pressure of monthly payments or overhead.
 It helps to create a urgency and buzz by increasing publicly among potential investors.
 Capacity to hire more stakeholders in order to make an investment.
Cons:
 It needs strong marketing strategy and good-sized budget for marketing.
 It can be costly and take a huge amount in order to get success.

Bank loans: Bank loans are the most usual source of funding for small and medium sized
business. It is considered with the fact that all banks provide different benefit whether it is
customized repayment or personalized service. In addition to Aroma café, it is a good approach
to identify the bank that meets the particular needs of the business. Banks are looking for the
organizations who have excellent credit and sound track record (Tapia, D. and Et.al., 2021). It
requires a personal guarantee from the business owners to startup loan.
Pros:
 It does not require to develop pitch deck.
 Good credit history will help to make up for what is lacking like in pitching ability and
design skill.
 It is easy process to finance equipment and real estate assets
Cons:
 Poor customer service.
 Lack of common sense underwriting and lots of paperwork.
 Rarely available for new ventures.
 If money is not raising regularly it bothers monthly debt repayments.
Friends and Family: This money is sourced by parents, spouse, friends or family. Bankers and
investors consider this as a “patient capital” which is a fund that will be repaid later when the
business and profit when borrowing such funds from then there are some points which should be
considered or aware about such as friends and family hardly have that much capital, and business
relationship with friends and family should never be taken casually also there is a chance they
might want to have an equity in the organisation (Kasioumi, E., 2021).
Pros:
 There is a chance to share the rewards of the success.
 Low expectations for business plans and pitch deck.
 The low burden of pitching and meetings as well as negotiating terms.
 There is a chance of forgiveness when failure happens or take longer time to get results.
Cons:
 Losing most valuable friendship and relationship with loved ones.
 May not be advisors or experienced investors.
 Network and initial circle may not have huge amount of capital to invest.
Venture Capital Firms: Venture capitalist are looking for advanced business and enterprises
with high growth potential such as communication, information technology and biotechnology.
The acquire a equity position in the organisation which supports to carry out a promising but
increased risk project. This involves giving up equity or ownership in the organisation to an
outside party. They are also expecting the healthy return on their investment (Zhou, H. and
Et.al.,2019). It is important to look for the investors who bring relevant knowledge and
experience to the association.

Pros:
 Organized funding process in due diligence.
 Huge amount of investment.
 Can add significant media attention, credibility and appealing to talent.
 Chances of open lot of doors by capable board members.
Cons:
 No one wants to be the first lead investor.
 Depending on the other goals and timeline when the owner source money from them.
 The pressure is high in order to make choices for the business or for the clients.
 Exhausting months of investor meetings and pitching.
Angel investors: Angels can be considered to those who are retired company executives or
wealthy individuals who invest their money in a small enterprises which is owned by others.
They are often leading their business in their own way and not only makes a contribution of their
experiences but also build a network of contacts and management and technical knowledge.
During the early stage that tends to finance the business with their investment. When they invest
their money by bearing risk they backup the right to supervise the management practices of
organisation. This often embraces the seat on the board of directors.
Pros:
 Can be a great method to future introductions and attract advisors to other investors.
 They likely to play an inactive role then venture capitalist.
Cons:
 Chances of not qualified advisors and experienced operators.
 May need nurturing and time pitching these contacts
It has been critically analyzed that there are various sources through which an organisation
can raise its fund. Various sources such as equity crowdfunding, bank loans, friends and family
and venture capital firms. Equity crowdfunding requires to bring a strong marketing effort and
needs a budget so that it can sometimes cost taking in order to achieve the success. Bank is also a
good source which is an easy process to get funds. Friends and family can provide and share
return on investments but venture capital firm is the most suitable point in which the business
then grow in advanced manner and owner can get a good return on their but inductor need to
bring their relevant experience and knowledge to the business.
TASK 3
P4. A business plan that includes financial objectives and strategic objectives.
Business plan designs for the organisation in order to help them to enter the new markets
with best potentials and to verify the business with allocation of resources with an idea of growth
plan and success of business (Stren, R. E. ed., 2019). Sometimes every organisation is not
necessarily design their formal business plans but they take significant time to develop plans or

growth plans as well as take essential steps and gather information to get an idea for the target
market. Business plan includes different outlines such as executive summary, company review,
strategic objective, public services, financial planning, customer segmentation as well as market
analysis. Financial positions that aims to achieve financial success which includes income
statement, cash flow statement and balance sheet for at least 3 to 5 years. With the purpose to
file a request for a loan that should deliver their prospective next five the years and into capital
expenditure cash flow statement and income statement which select projection and meet the
demand for stop level of detail which is desired a financial plan which is depend on aims,
objectives and customers which will entails of three actions of financial statements that are
suitable for all financial projections.
Strategic initiatives signifies the organisation in order to double the profit within three to
five years and raise the customer demand with the accomplishment of goals and objectives with
a great influences. This includes marketing aims and objectives as well as customers are
assumed, consumer size lies at the end of period in operation information where a company is
based on suppliers, sites equipment which are necessitate for information to make a profit and
loss account, sales forecast, cash flow statement or audit account and the summary of business
objective that includes targets and dates individual with the warmth of units at this will be
combine with single strategy file for whole company. The main purpose is to design a business
plan which contains existing audience with finances or bank ok that will required with the
purpose and objectives for each and every unit of company, past records of organisation for three
years financial statement are should be deliver and information about goods and services where it
suits it market.
TASK 4
P5. Assess exit or succession options.
An exit strategy supports and entrepreneur initial growth plan before it actually
happening to business. This plans influences decisions in order to develop business by making an
exit plan. It is important to make exit strategy at some point of time to the business, even it can
be understand through transferring of ownership of the organisation when entrepreneur decides
to quit the organisation (Kasioumi, E., 2021). In addition to Aroma cafe, if they have an exit
strategy at early place that can helps to make a decision and will support to eventually exit. This
makes the process profitable and easy as possible.
Exit or succession strategies for small business:-
Liquidation: Liquidation is a process of selling of its assets and closing a business or
redistributing them to shareholders and creditors. It mainly has two ways:-
 Close and sell the assets as soon as possible: It is one of the option to exit or succession
a business by sell the assets or close the business as soon as the entrepreneur can. This is
often the last method for an organisation to make money off the assets whereas valuable
items like business relationships or clients list are no longer. It is necessary before
liquidating a business to work with liquidation experts in order to ensure about right

procedures for selling the assets, finalizing all legal and financial commitments, paying
back all debts as well as employee protocol.
Pros Cons
 Simple process to exit.
 It can be quick closing process
which is depend on the sale of
assets.
 It is dependent on the sale of assets
so that one can make money
accordingly.
 In such strategies creditors are the
first priority to be paid from any
cash produced.
 Liquidating the business over time: It is an another liquidation option in order to pay
yourself until the business finances run dry then the business closed ultimately. This is
considered as a lifestyle business in which entrepreneur takes the funds out over time
rather than make a reinvestment into the business.
Pros Cons
 A business owner have cash flow to
maintain the lifestyle
 Tax situation is affected by the way
the owner will draw the funds.
 The business sale’s value and
growth potential are arrested.
 If investors are not happy and
satisfied they will upset the
situation.
Sell the business someone to known: It is an exit strategy in which the business is sale out to
someone whom the business owner is familiar with it may be manager, customer, existing
partner, employee, family member or a friend (Sgobbo, A., 2020). This is a strategy in which
seller are able to maintain the income on the other side purchaser begins to functioning the
business without making a huge initial investment. The seller can also act as an advisor or
mentor which helps everyone to meet the process easier. It is required with awareness about
transferring business, valuation, estate planning issues because sometimes it can be complicated
and complex when it seems to a family member.
Pros Cons
 When the business is sell to the
family person then there is a chance
of less disruptions to the business.
 A chance to remain involved in the
business activities.
 The business owner may be
uninterested to sell at a low price or
discounted price which means he
won’t retrieve of the full amount.
 It could stress family relations and
roots differences among the relations
or family.

Sell the business in open market: It is an another effective strategy to buy an existing
establishment of business which can be an attractive option for the business owners because it is
consists with less risk rather than starting a new business venture on the other side seller makes a
purchase easier to make money (Zhang, Y., 2020). It benefits the buyers also by supposing the
existing business system its brand reputation, its sales stream and cash flow and it has established
clients.
Pros Cons
 It will attract the buyers if the
business is in effective financial
position.
 It enables the seller to profit from
brand building and its relationship,
the goodwill of the business can be
amalgamated.
 It is a complicated process to value
the business and might not get the
required selling price.
 It can be a tedious and long process
to look for a buyer to sell the
business in the open market.
An IPO (Initial Public Offering): An initial offering commonly states the process in which an
organisation sells their shares of stock to the public at very first. With the purpose to increase the
additional capital and organisation classically go through their process. It is a big step for the
organisation to be going public and it is not a cost effective process at all.
Pros Cons
 To become a public company results
more profits for the organisation
(Bonenberg, W., 2019).
 Going public can help to build a
reputation and increase brand
awareness as well as boost publicity.
 Taking an organisation public is
lengthy, tedious and expensive
process.
 The organisation may lose its
flexibility when shareholders get to
have a word over the direction of
organisation in order to manage the
business.
 Going public comes with new
responsibilities such as providing
information, filling SEC reports about
finances, business operations and
management.
It is quite clear that there are various options for the organisation to exit or succession
strategies such as liquidation in which assets can be sold in the market in order to liquidate the
business. Selling business in open market is also an attractive option in which there is reduce risk
because the seller can make a easier process to sell.
CONCLUSION
It has been concluded from the above report is that planning helps an organization to
expand their markets in new markets in order to maximize profits for the company. It also

support to identify competitors in the market that they will be going against. The planning for
growth helps to gain competitive advantages by developing strategies to overcome weaknesses.
It also business to gain objectives, enables to make more efficient use of resources and time. This
provides a support to business what is going to achieve and why it needs. This assists in reducing
risks and facilitate proper coordination in modern business activities.

REFERENCES
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research and practice. In Maritime spatial planning (pp. 1-21). Palgrave Macmillan, Cham.
Erfani, T., Pachos, K. and Harou, J. J., 2020. Decision-dependent uncertainty in adaptive real-
options water resource planning. Advances in Water Resources, 136, p.103490.
King, H. and Wachs, M., 2020. Centuries of Ballot-Box Transportation Planning in Los
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Maguire, K., 2019. Examining the power role of Local Authorities in planning for socio-
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Nguyen, N. H., 2020. Simulating the Generative Process of Urban Form: An Application Using
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Sherman, H. D., 2020. The Role of the State in Water Planning, Research, and
Administration. Denver Journal of International Law & Policy, 6(3), p.20.
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Small and Medium-sized Enterprises.
Zhou, H. and Et.al.,2019. Multi-stage contingency-constrained co-planning for electricity-gas
systems interconnected with gas-fired units and power-to-gas plants using iterative benders
decomposition. Energy, 180, pp.689-701.
Kasioumi, E., 2021. Planning the Impossible. In Planning the Impossible. Birkhäuser.
Stren, R. E. ed., 2019. African cities in crisis: managing rapid urban growth. Routledge.
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Zhang, Y., 2020, April. Analysis of urban landscape planning based on haze environment.
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