Planning for Growth: Analysis and Strategies for Cafe Pariseinne

This report analyzes growth opportunities and strategies for Cafe Pariseinne, a small business in London, UK. It includes a Pestel analysis, Porter's generic strategies, and Ansoff's growth vector matrix. It also assesses potential sources of funding and exit options for small businesses. The report recommends adopting the product development strategy to enhance the product line.

Planning For Growth

Table of Contents
INTRODUCTION ..........................................................................................................................4
TASK 1............................................................................................................................................4
Analyze key considerations for evaluating growth opportunities and justify these
considerations within an organizational context....................................................................4
Evaluate the opportunities for growth applying Ansoff’s growth vector matrix...................9
Discuss option for the growth by using a range of the analytical framework for demonstrating
the understanding of a competitive advantage in organization............................................12
Evaluate the specific option and pathways for the growth, taking into account risk of each
option and how they can be mitigated..................................................................................13
TASK 2..........................................................................................................................................13
Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source.....................................................................................................13
Evaluate the potential source of the funding and justify the adoption of appropriate sources for
funding..................................................................................................................................15
Evaluate potential sources of funding with a justified argument for the adoption of a specific
source of source based on organizational needs...................................................................16
Design a business plan for growth that includes financial information and strategic objectives
for scaling up a business.......................................................................................................16
Appropriate and detailed business plan for the growth and securing an investment, objectives,
strategies, setting out strategies and appropriate framework to accomplish objectives.......22
Present a coherent and in depth business plan which demonstrate understanding and
knowledge of how to apply and achieve business goals successfully..................................22
Task 3.............................................................................................................................................22
Assess exit or succession options for a small business explaining the benefits and drawbacks
of each option.......................................................................................................................22
Critically examine the exist and succession option for the small business comparing and
contrasting the option and making a valid recommendation................................................25
Provide a critical evaluation of exist and succession option for small business and decide
appropriate course of the action with a justified recommendation for supporting

implementation.....................................................................................................................25
CONCLUSION .............................................................................................................................26
REFERENCES..............................................................................................................................27

INTRODUCTION
A business plan is a document that contains the main objective of the organization, key
operations to be performed to achieve the defined objectives, and ideas on how to perform and
allocate the activities for the achievement of goals. Planning for business is very essential for the
success of every organization. It involves identification of the opportunities for expanding the
business for further growth (Atkinson and Blundell-Wignall, 2022). When any new opportunity
comes in the market, business owners must formulate effective plans to take advantage of that
opportunity for business expansion. For achieving the growth oriented objectives, a proper
growth strategy should be followed. A business growth plan should include a vision and mission
for the organization to attain a position in the market through following the growth strategies.
The following report will cover the Pestel analysis, porter's five forces competitive analysis and
Ansoff's market growth analysis of a small business organization Cafe Pariseinne (a cafe in
London, UK that offers coffee , cakes, sandwiches, breakfasts etc.) for expanding the scale of
business and planning for growth.
TASK 1
Analyze key considerations for evaluating growth opportunities and justify these considerations
within an organizational context.
Meaning of SME
SME stands for the small and medium sized enterprises that denotes the 99% of all the
businesses in the UK. These are the type of organizations that are determined from two factors
firstly from the strength of the employees and secondly through turnover or total of balance
sheet. There are three types of businesses under the SMEs that is Medium sized, small and
micro business.
What is planning and growth in Cafe Pariseinne
Meaning of competitive advantage
The competitive advantage within an organization is the condition or the situation that
make the company stand in superior position to other competitors. This is one of the most
essential factor for the organizations to produce and serve better products and services in against
of the competitors.

SWOT Analysis
Strengths
 Talented and skilled staff such as chefs, waiters, etc. are the main strengths of Cafe
Pariseinne, as this allows the company to produce the highest quality products.
 The premium pricing of the company's bakery products and other products is also a
major advantage for the company. This brings loyal and luxurious customers to the cafe.
Weaknesses
 Inconsistent sale of the company is major disadvantage for the cafe as this is creating
instability in business and also due to this company in not able to grab the growth
opportunities effectively.
 Limited market share as the cafe is small sized business with limited customer and
employees. This is drawback for company as this limits the company to particular stage
and hindering the growth as well.
Opportunities

 Digital marketing and social media marketing is the major opportunity for the cafe to
increase its brand presence among the youth and potential customers.
 New techniques and innovation into the cooking methods, flavors of the bakery items,
new working process, etc. is the major opportunity for the cafe Pariseinne to increase its
product portfolio and sales.
Threats
 Highly dynamic and competitive market is huge threat for the business as the industry is
filled with the huge competitors that are leading the market in monopoly. This brings the
threat of succession or exit to the firm.
 Costly suppliers with high bargaining power is also threat to the cafe as the with the
increasing trend of vegan food the suppliers that provide vegan raw materials are costing
high prices.
PESTLE Analysis
It is a strategic framework that is used to evaluate the external environment factors that affects
the business of the organization. In context with cafe parisienne, Pestel analysis is explained
hereunder :
(Source:Pestle Analysis: A Mechanism for Analysis of Businesses,2022)
Illustration 1: Pestle Analysis: A Mechanism for
Analysis of Businesses,2022

 Political factors : These factors include political changes i.e. government policies,
foreign trade policies, taxation policies,etc. that affect the business of the organization.
As the big coffee producers are located in Africa,Asia and other foreign countries, Cafe
parisienne depends on international trade to acquire coffee therefrom. So it should
maintain good trade relationships with foreign countries by adapting to its local policies
as well as international policies of trade to conduct better foreign agreements.
 Economic factors : The factors like inflation rates, exchange and interest rates, national
income, globalization etc. fall under this. In growing economies, where disposable
income of people is high, they spend more on consumer goods i.e. fast foods, tea, coffee
etc. that affect the sale of cafes as well. As regards cafe pariseinne, it should expand its
business by increasing number of outlets with growing economy so as to increase
customer base and promoting growth thereby.
 Social factors : These factors include social trends, consumer preferences and population
growth rates, location of the outlet etc (Bahri, Putri and Harto, 2022). As consumers
become more health conscious, their demand for healthier products increases that affects
the profitability of business. Cafe pariseinne should add quality to its beverages by using
high quality coffee beans to attract more customers rather than offering caffeinated
beverages. It will attract the health conscious customers too.
 Technological factors : It includes those factors that promote innovation in the industry
through automation, research and development. The increasing use of electronic
appliances in making beverages make consumers to consume the beverages at home that
results in reduced demand at cafes. So, Cafe pariseinne should enhance its online fast
delivery process to overcome this and to increase customer base.
 Environmental factors : The factors like pollution, climate change, natural calamities
fall under it. As regards Cafe pareseinne, it should use environmental friendly or
recyclable disposals to serve coffee in and to avoid pollution that violates environment
related laws.
 Legal factors : These include various laws applicable on an organization such as foreign
laws, company laws, rules and regulations of the country. As cafe pariseinne deals in
foods and beverages, it should adapt to laws related to food protection and standards like

caffeine standards etc. It should supply the food products with quality packaging by
trademark demonstration.
Porter's generic Strategies
Michael porter introduced the generic strategies that assist the business to get competitive
advantage in the market. Three generic strategies are : Cost leadership, Differentiation and focus
strategy. In context with Cafe Pariseinne, these strategies are explained below:
(Source: Porter’s Generic Strategies: Cost Leadership, Differentiation and Focus, 2022)
Illustration 2: Porter’s Generic Strategies: Cost Leadership, Differentiation and
Focus, 2022

 Cost Leadership strategy : It tells to maintain low cost of the products for gaining
competitive advantage and for attracting those customers too who are price sensitive. It
concentrates on offering the products at low cost per unit. The businesses that follow this
strategy of pricing enjoy long term profitability. Charging the average prices prevailed in
the industry with lower costs help in maintaining high profits.
 Differentiation Strategy : This strategy states to add uniqueness to the products to be
offered in the market. To add quality to the products, marketing efforts and an effective
sales team are required to make the offerings good than that of competitors. Business can
charge premium price because of the differentiation of the food products.
 Focus strategy : It considers a particular segment to be concentrated on. It is further
divided in 2 strategies : Cost focus strategy that states to focus on getting cost related
benefits on a particular target segment. Differentiation Focus strategy that focuses on
differentiation of products in a particular segment or product line.
As regards Cafe parisienne, it is a small scale business, so it is recommended to follow the
differentiation strategy to expand the business and thereby promote growth. By following this
strategy, it should add more uniqueness to the products being offered such as providing
beverages & cakes with multiple flavours by adding extra creams and chocolate sauce , new and
quality lunch programmes. It should introduce lunch programme of south Indian Platters in
Indian cuisine as its differentiated product.. It can charge high prices for offering high quality
and differentiated products using this strategy.
Evaluate the opportunities for growth applying Ansoff’s growth vector matrix.
Ansoff Matrix was developed by H.Igor Ansoff, a mathematician and business manager. It is a
marketing strategy matrix that helps in formulating strategies for growth of the business in the
market and the risks associated with the strategy formulated. It helps in promoting growth by
entering in new markets. In relation to cafe pariseinne, the four strategies of this matrix are
explained below :

(Source: Ansoff Matrix, The Product/Market Expansion Grid, 2015)
Illustration 3: Ansoff Matrix, The Product/Market Expansion Grid,
2015

Market penetration : This strategy states to enhance the existing products sale in the existing
market (Berdine, 2022). It is used to increase market share of the products currently being
offered in the current market. This strategy can be followed by taking marketing and promotional
efforts such as, advertising to increase the sales of products. To follow this strategy, cafe
Parisienne needs to develop its current offerings like variety of cakes and breakfasts offered, by
adding extra ingredients such as chocolate creams and high quality coffee beans for delivering
coffee to attract more customers in UK market.
Advantage : the advantage of this strategy to cafe Parisienne is that it will increase the good will
of the company among existing customers and also discourage competitors.
Disadvantage: the drawback of this strategy is that in order to increase sales the company has to
suffer with low profit margins on the product.
Market Development : It concentrates on the introduction of existing products in a new market
for increasing market share of existing products. The factors like new locations, new customer
groups etc. fall under this. This strategy proves to be good when preferences of customers in a
new market do not change much as compared to the current market customers because it does
not result in reduced customer base. For market development strategy,Cafe Parisienne will have
to expand its current offering outlets to foreign markets such as US, India, China etc. according
to the preferences of customers.
Advantage : A firm gains and opportunity to expand itself with new base of customers creating
decisive edge over the competitors.
Disadvantage: for the market development cafe Parisienne will be requiring high investment
for the expansion with the high risk of failure.
Product development : This strategy tells to innovate new products in the existing market or
increase the development of existing products in current market (Bosah, 2022). Innovation
regarding new products require an effective research to meet the preferences of the customers of

current market. Cafe Parisienne needs to develop its products by introducing new products to its
menu. As it deals mainly in breakfasts, it should add it up by fresh lunch meals and dinners of
different cuisines.
Advantage : the development of new product by the cafe Parisienne will provide a means to
target and position into new customer segment and also this will increase revenue streams.
Disadvantage: the primary disadvantage of this strategy for the cafe Parisienne is that changing
customer preferences can become a reason for the fall of worth of the valuable products making
it worthless.
Diversification : It is the riskiest strategy to be adopted. It is followed when the business takes
entry in a new market with the innovative and new products. It requires the development of both
the new market and new products. For diversification of products, high promotional efforts are
required. As regards cafe Parisienne, for diversification, it has to offer its new product i.e. fresh
meals in other foreign markets with growing economy. It will create more risks as cafe
Parisienne operates on a small scale with limited range of products.
Advantage: this strategy of the company will provide the company major advantage to the cafe
to maximize its underutilized resources which will help the company to gain profitability.
Disadvantage: the diversification strategy of the company will demand the new skills and
capabilities which will increase the labour cost of the company.
In context with Cafe Pariseinne, it is recommended to adopt the strategy of product
development and enhance the product line. It involves high research and development to create
wide range of products. As it operates on a small scale with a limited product line , it is required
to expand its activities by opening more outlets in UK market at different multiple locations to
increase customer base. It is recommended to introduce new food products i.e. fresh and heavy
meals of Indian cuisine with its current offerings.
Discuss option for the growth by using a range of the analytical framework for demonstrating the
understanding of a competitive advantage in organization.
There are various growth strategies in business organization through which a company
can expand their business at international level. These strategies include market penetration,
product development, market development and diversification. For the chosen organization,
product development strategy is very beneficial as it make enable them to bring its product with
an innovation which attract more customer base. During expanding it business, respective

company should analyses the macro environmental factors as these external factors may impact
their business adversely. Therefore, the company should adopt growth strategy by analyses these
factors carefully.
Evaluate the specific option and pathways for the growth, taking into account risk of each option
and how they can be mitigated
For the organizational growth, there are many option which are undertaken by companies
in order to grow their business more (Castro, Cruz and Muñoz, 2022). In market penetration,
there is quick diffusion and adoption of the company's product in market that create goodwill but
it lead to a low profit. In product development, it maximize the customer's satisfaction and
expansion the market but change customer's preferences. In market development it increase the
customer base but require a huge capital. Therefore, it is recommended to the company that its
should adopt product development strategies as it help a company and its brand to stay relevant
with their customer base and bring innovation in the organization.
TASK 2
Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source.
For expanding the scale of business, Cafe Pariseinne needs funds to invest further in research and
development of the products for increasing their market share in the current market and for
meeting the working capital requirement as well. The following are the sources of funds that
Cafe parisienne can opt to finance its business expansion from :
1. Angel investor : It is a primary source of fund for the start ups (Ekman, Dahlin and
Keller, 2022). Angel Investor is an individual or group of individuals with high net worth
who help small business entrepreneurs in providing finance (capital) in exchange of
ownership of equity in the business.
Advantages of Angel Investor :
 As angel investors receive equity of business in exchange of capital, businesses need not
pay back the funds acquired.

 By acquiring funds from the angel investors who are proficient in start ups , business gets
the knowledge of market place and information of strategies regarding other similar
companies.
Disadvantages of Angel Investors :
 Providing more equity in exchange of finance can remove the business from its place as
investor can choose to put a more experienced performer in its place.
 Angel investors expect more returns on their investments , sometimes more than their
original investment.
2. Bank Loan : It serves as a reliable method of financing the small businesses in
maintaining working capital and financing the material requirement (Martínez-Velasco,
and Terán-Bustamante, 2022). But for providing loan, bank requires significant collateral
and good credit rating of the business it is investing in.
Advantages of Obtaining Bank Loan :
 Unlike angel investors, bank officials do not affect the control of operations of business.
Businesses do not lose control over their operations after obtaining bank loan.
 There is no liability of businesses to banks after the repayment of loan as in case of angel
investors in which returns on equity is to be given till the existence of business.
Disadvantages of bank Loan:
 Business has to arrange funds from other sources also as banks provide low funding with
high interest rates that is not sufficient to meet the fund requirement of business.
 To acquire bank loan, a good credit rating and valuable collateral is required. Bank can
seize the personal assets of business in case of any default in the repayment of loan.
3. Venture Capital : They are the private equity investors that provide finance to start ups
or emerging businesses (Mehta, 2022). Its investors constitute investment banks and
financial institutions that provide finance to the small businesses that have high growth
potential by considering factors like annual sales revenue and scale of operations etc.
Advantages of venture capital :

 Apart from financial assistance, venture capital financing provides businesses with
valuable knowledge regarding business expansion decisions that are required to promote
growth.
 As Venture capitalists are regulated strictly, they provide trustworthy consultancy in
various other areas like tax and legal consultancy, human resource management etc.
Disadvantages of venture Capital :
 Businesses can lose management control because of the high stake of venture capitalist in
the business.
 The main objective of venture capitalist is to earn capital gains. So they want an early
redemption within 3 to 5 years. So businesses need to consider this factor in order to
expand business with this source of fund.
From the above discussion on requirement of source of funds for business expansion, it is
recommended to Cafe Parisienne to acquire venture capital as a source of finance as business
expansion is not possible through bank loan because it provides small funding with high interest
rates and venture capital investor considers and takes the risks associated with the expansion of
business. Venture capitalists invest more in already established businesses unlike the angel
investors who are more likely to invest in start ups (Moital, 2022). As cafe Parisienne needs to
develop and expand its product line in the market, it requires heavy investments to be made on
research and development and business expansion. Thus , venture capital is the right source to be
chosen as angel investors and bank loans do not provide more funds as compared to venture
capitalists.
Evaluate the potential source of the funding and justify the adoption of appropriate sources for
funding.
In an organization, company need fund to invest in different department such as research
and department, marketing and many more. There are several source of funding including
venture capitalist, bank loan angle investor and many more. In context of the chosen company,
venture capitalist invest is very good source as the company need a large amount for invest in the
research and development department. Therefore, this source of funding provides a good amount
of fund to the company.

Evaluate potential sources of funding with a justified argument for the adoption of a specific
source of source based on organizational needs.
As there are a lot of option for funding in a company. Angle investor expect more return
and provide more equity in the exchange of finance (Munthe and Winario, 2022). Whereas bank
loan can seize personal assets of company in case of default. So it is suggested to the chosen cafe
that it arrange funds through the venture capitalist as is provide a valuable knowledge regarding
the business expansion and it is trustworthy. It provide fund to the small business like Parisienne
to implement their strategy.
Design a business plan for growth that includes financial information and strategic
objectives for scaling up a business.
To introduce the new product into the market and expand the business by following growth
strategies, Cafe parisienne needs to adopt the following business plan for further growth:
Executive Summary
As cafe parisienne is taking steps to introduce a new product in the market and planning
for expansion and growth thereby, it needs to develop an effective growth plan of business to
identify the available opportunities in the market by assessing the external environment as well
through PESTEL Analysis. It requires to follow the above mentioned growth and pricing
strategies to get the competitive advantage and to meet its target customers. For launching fresh
lunch meals as the innovated product, it can use venture capital as a source of fund to meet its
promotional and research & development requirements.
Vision
To expand the business and promote growth by attaining a good position in the market and
through increasing market share of innovated products.
Mission
To increase the customer base in UK market by product development and by offering
differentiated products(i.e. fresh south Indian meal and dinner) at multiple outlets.
Strategic Objectives
 The company has an objective to expand itself into the new market in the year 2022 with
the existing product to gain brand recognition new geographical area.
 The company also has an aim of increasing the market share by 20% in next three years.
Business Strategy

Cafe Parisienne should follow the growth strategy of product development to expand its
business. By adopting product development strategy, cafe parisienne can increase its market
share by offering differentiated products in the UK market at different outlets and can enhance
its customer base as well. By following differentiation strategy, it should add uniqueness to its
current products and offer a new differentiated food product i.e. South Indian platter of Indian
Cuisine at its outlets in the market.
Stakeholders
The stakeholders of the organisations are key members that either influence or get influenced
with the actions and decisions of the business. The key stakeholders of cafe Parisienne are
discussed below:
Customers: the customers are the lifeblood of the company that brings revenue to the firm and
are considered as the major source of income for the company. In cafe Parisienne the customers
has high power in the company as to develop new product or for enhancement of services
customer demand, preferences and trends are always kept at the priority.
Employees: the employees are helping hand of the company that are highly skilled, experienced
and talented to develop the best products for the customers. In cafe Parisienne the employees
have high interest and influence on the decisions of the company as employees relationship is
important in order to have sustainable business.
Funding sources
For the business to expand it is important to sort out the funding sources company has in
order to gain monetary value at the time of business expansion. Some key funding sources are:
Bank loans: this is the most common form of funding in which slam businesses like cafe
Parisienne can apply for the loan in the bank at low interest in order to support the expansion of
the business. This is the most effective and easy to access funding source that the company can
acquire.
Angle Investors: It is a primary source of fund for the start-ups. Angel Investor is an individual
or group of individuals with high net worth who help small business entrepreneurs in providing
finance in exchange of ownership of equity in the business.
Time frame
Gantt Chart and WBS

SWOT Analysis
Strengths Weaknesses
 The market development strategy of the
company is the major strength of the
company as the company has valuable
resources for the same.
 The innovation and creativity of the
products from their taste to the
presentation serves the advantage to the
company and considered as the key
strength in attracting customers.
 The low sources of finance is the
weakness of the company as this stops
the firm from innovation and
expansion.
 The company has slow compliance
with the new baking tools and
techniques due to which company lacks
in meeting high number of orders from
clients.
Opportunities Threats
 With the growing trend of celebrations
of baby showers, birthdays, weddings,
farewells etc. the company has an
opportunity to enter into customization
of cakes and hampers to meet customer
demands and also to create product
differentiation.
 There is huge trend of baking classes
and workshops in the Bakery shops this
provide an opportunity to organise such
paid workshops.
 The cafe Parisienne has the huge threat
of competitors as the baking industry is
full of competitive rivalry and
substitutes.
 The Company also has huge threat of
social media as there are many small
online bakers that are selling their
business offering through social media
channels.

Marketing mix Strategy
Marketing Mix is a combination of various components that assist in promoting the products and
in increasing their demand. As cafe parisienne is launching a new product in the market, it needs
to follow a proper marketing mix strategy to attract more customers. The following are the
respective marketing strategies of cafe parisienne :
 Product Strategy: It is coming up with new lunch programmes that require product
development strategy to be followed to attract customers to the innovated product and
expand market share in UK.
 Pricing Strategy: As cafe parisienne has chosen to differentiate its product in the market,
it should follow differentiation pricing strategy to charge premium prices for its newly
introduced product.
 Distribution strategy: To increase the sales volume, it should enhance its online
delivery process and number of outlets in the UK market (Price, Farren and Stoll, 2022).
It should choose locations of public places such as shopping malls for opening the outlets
in different forms like stores, lounges etc.
 Promotion strategy: To attract the target customers and increase awareness about the
product innovated, cafe Parisienne should advertise its product through newspapers and
television commercials, by using tent cards at its outlets.
Control and Monitoring
Cafe Parisienne should use the Benchmarking tool of performance measurement to monitor its
performance. This tool is used to compare the performance of business with standard business
practices and other competitive firms, then identify the gaps between standard and actual
performance and further, finding out the methods to reduce those gaps. It serves as an effective
measure to control the business performance.
Total forecasted budget

Appropriate and detailed business plan for the growth and securing an investment, objectives,
strategies, setting out strategies and appropriate framework to accomplish objectives.
Market plan is a good opportunity for a company as it help them to expand their business
or launch their product with a innovation. The respective cafe want to bring a new product in the
market. For this, the cafe should segment their target customer that help the company to making
their segmented criteria very beneficial (Prowse and Pearce, 2022). To implement their
marketing plan, cafe should should the marketing mix in order to formulated effective strategies.
To implement into reality it require a huge amount of capital. In this situation venture capitalist
is a best source for funding in company as it provide fund to business to formulate their
strategies.
Present a coherent and in depth business plan which demonstrate understanding and knowledge
of how to apply and achieve business goals successfully
In this case, the company has a marketing plan in which it wants to adopt the strategy of
product development. Under this marketing plan, the company will introduce its product with a
new innovation in order to attract more customers as it will provide something different in its
product. Therefore, to implement their plan successfully the company should analyse the
marketing mix so that their strategy become more effective.
Task 3
Assess exit or succession options for a small business explaining the benefits and drawbacks
of each option.
An organization can exit from the business either by winding its operations up or by selling it to
another undertaking. So Cafe parisienne has below mentioned exit options to choose from:
Winding Up: It means to terminate the business by ending its operations up. It is also called
liquidation of business. It involves selling of all the assets and stock left, payment of all the
liabilities viz creditors, bank overdraft etc. before closing the business.
Advantages of winding up:
 If the current business of the company is not running efficiently or generating less
revenue or the products it offers has low demand in the market, it can opt to wind up the
affairs of the business (Raun and Silm, 2022). This would provide opportunity to the

business to engage in other business, offering the products of which will attract more
customers and meet out their preferences according to the demand in market.
 When the amount of liabilities is high and business lacks funds and faces pressure by the
creditors, winding up serves as a good option because in case of insolvency of business,
an insolvency official is appointed to pay off all the creditors on closing up of the
business.
Disadvantages of Winding up:
 It affects the credit rating score of owners of the business as it creates hurdle in obtaining
funds if they want to start any other business.
 After winding up the business, its reputation is lost that can affect the other newly started
business as well.
Sale of Business:
Advantages of sale of Business:
 Selling of business at high price will provide the funds to start a new business with
products having high demand in the market.
 Unlike winding up, it does not involve the paying off of creditors before selling the
business, as ownership of assets and responsibility of liabilities gets transferred to the
transferee.
Disadvantages of sale of Business:
 It involves a negotiation procedure to sell the business to another undertaking, which is a
very time consuming process.
 Selling a business involves high legal expenses and formalities to be executed.
From the above discussion, it is recommended to cafe parisienne to opt for sale of business (if
circumstances so require) from above exit options because it is in a process of growth and is not
having large scale of operations. Although both options provide advantage of switching to
another business, winding up involves more formalities than sale of business such as
appointment of liquidator, insolvency official etc.
Succession options
To expand the business, cafe parisienne has the following succession options:
Merger: It means the integration of two or more businesses to form a new single business (SP,
Siregar and Sugianto, 2022). It is needed when businesses want to expand and increase market

share by having more customer base. Cafe Parisienne can choose this option of succession after
considering the following pros and cons:
Advantages of Merger:
 Through mergers, benefit of a large market share is availed because businesses get the
advantage of a large customer base as customers of both the businesses are also
integrated on the integration of two businesses.
 It assists in saving an unprofitable business by getting it merged with another business.
Disadvantages of merger:
 After getting merged, the business is not able to control the operations effectively which
affects the productivity level resulting in getting lesser benefits of economies of scale.
 It involves a legal procedure to merge two businesses that require high legal costs due to
the appointment of lawyers and professionals who manages the financial matters
regarding merger.
Franchising: It is a method of succession of business operations in which original and existing
business (Franchisor) allows another business (franchisee) to sell products and services in the
name and under the brand of original business.
Advantages of Franchising:
 It helps in reducing the burden of original business as it is shared with the franchisee.
 As the franchisee is using the brand or trademark of the original business, it helps in
increasing brand awareness among the customers.
Disadvantages of franchising:
 It involves much investment of time and money for initiating a franchise agreement as it
involves appointment of a franchise consultant.
 There is a possibility of legal disputes between franchisor and franchisee that creates
barriers to success.
From the above discussion, it is recommended to cafe Parisienne to follow Franchising for
business succession or expansion. Although Franchising and merger, both involve more legal
formalities, but franchising is more appropriate as it helps small businesses in promoting
products through brand awareness. So, cafe parisienne should adopt it as it is introducing a new
product for succession of business.

Critically examine the exist and succession option for the small business comparing and
contrasting the option and making a valid recommendation
There are several exist and success option for the company. The exist option include
winding up, sales of a business and many more (Wen, Xu, and Chen, 2022). Whereas success
option includes the merger, franchising and other etc. for the chosen cafe it is recommended that
tin exist option they should choose winding up option as if the company has to paid any penalty
then it will be deducted from the offer of benefits. And in succession option, respective cafe
should adopt franchising option as it will increase the customers base and also enhance brand
image among customers.
Provide a critical evaluation of exist and succession option for small business and decide
appropriate course of the action with a justified recommendation for supporting
implementation
In every organisation, in the situation of exist or success there are several option in which
they have to choose that option which is beneficial for the company. In the respective cafe, if the
company want to exist then it should go for the option of winding up and in the situation of
succession the cafe should go for the franchising option. These option will be very suitable for
the company.

CONCLUSION
From the above report it is concluded that every organization a business plan in which
they practice to grow their business. For an effective business plan, the company should analyse
those element which has negative impact in their business operation. For this they should
conduct different type of the analysis in which they determine which factor is favourable and
unfavourable. The company also undertake a favourable exits and success business strategy in
which choose the most suitable strategy. Therefore, it is suggested that for every business
organisation, the analysis of external environmental factor is very crucial in order to run their
business successful.

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