This report provides an analysis of growth opportunities, sources of finance, business plan, and exit plan for CafePod Coffee Co. It also includes an evaluation of competitive advantages and sources of finance.
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Planning for growth
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Contents Contents...........................................................................................................................................2 INTRODUCTION...........................................................................................................................1 MAIN BODY..................................................................................................................................1 TASK 1............................................................................................................................................1 Evaluation for the growth of the company..................................................................................1 Understanding competitive advantages.......................................................................................4 TASK 2............................................................................................................................................5 Sources of finance........................................................................................................................5 Evaluation of sources of finance..................................................................................................6 TASK 3............................................................................................................................................6 Business plan...............................................................................................................................6 evaluation of business for the company.....................................................................................10 TASK 4..........................................................................................................................................11 Exit plan.....................................................................................................................................11 Evaluation of the exit plan.........................................................................................................13 CONCLUSION..............................................................................................................................13 REFERENCES..............................................................................................................................15
INTRODUCTION Planning for growth is the strategic activity planned by business and organisation in order to increase their growth in the market(Affia, Akang and Aniefiok, 2020). Through this company can track their organic growth in their revenue. A proper strategic planning helps in preparing realistic vision for the future growth of the business and maximises with their potentiality for successful growth. CafePod coffee co is the independent craft coffee business which was established in 2011. The report will provide an analysis in context to small and mid-size to evaluate the growth opportunity, sources of finance, a proper business plan for growth and exit plan. As company needs to enhance the operations and need to take the growth for establishing in the market. Planning for growth will provide various benefits to the company for making strategies and decisions in favour to increase the growth of the company in the market. MAIN BODY TASK 1 Evaluation for the growth of the company. For evaluating the growth opportunity of the CafePod coffee co there various analysis through the company can understand the market analysis by internal and external analysis and various others framework in order to understand the market. Which are mentioned below. Pestle analysis Political- There are various political issues that might affect the coffee industry. The company needs to take into consideration for every law. Economical- There are several economic laws that might affect the growth of the company. The business is minor depend on the economics of the country. Social- There is constant changes in market trends in terms of the preference and living standards of the customers which might affect the CafePod. Technological- There are constant changes in the technology which organisation needs to take into consideration in their operation process. And there is technology which might be in benefit of farming the raw materials(Bhattacharya and Bhattacharya, 2021). Legal- there are several rule, regulations and laws which might affect the company growth. 1
Imitable-As the flavours, taste and quality can be imitable. The environment and ambience are not imitable(Cardoso and et. al., 2020). Organised-The authentic taste, flavours and process is well organised by CafePod. the environment and surrounding are also well organised by the organisation. Strength-From this analysis the CafePod can identify internal analysis in order to make decisions to develop the innovative ideas. Opportunity-With this analysis the company become market leader. SWOT analysis Strength-The brand image of the company is its strength. There proper recipe is their strength, through which they attract loyal customers. Weakness- The company has limited share in the market in order to deliver the products. The competition in the market is high. Opportunity-There are various new opportunity for CafePod to grasp such as, new technology to grow and operate smoothly. Threats-There is major threats from competitors such as, Starbucks, Dark arts coffee and Marshfield bakery(Chen and Voigt, 2020). Strength-From this analysis the company can identify its strengths and weakness to make better decisions for growth in the market. Opportunity-With this analysis CafePod can identify several opportunities that can develop into operation. This enable company to identify the long-term vision. Porter generic framework Cost leadership theory-Company can decide on cutting various cost of manufacturing. It will help CafePod to reduce the price for competitive advantage in the market. Differentiation theory-The CafePod, firm can need to concentrate on increasing the target market in order to fulfil their needs. This way, the company will enable for making a position in the market. Cost focus theory-In this the industry will able to focus on the selected niche market, along with fulfilling the needs and demands of the customers. This was it will help the CafePod to grow by focusing on the niche market. 3
Differentiation focus theory-This strategy allows company to focus on the preference and needs of the customers. This allows CafePod for focusing on the niche market to understand in order to provide the growth opportunity. Strength-This analysis provides an effective technique for reducing the cost. Opportunity-It identify market trends customers and various opportunity to grow in the market. Ansoff matrix Market penetration-This refers to the company to allows its market for offering the products and services in existing market. This will allow company to attract more customers. AdvantagesThis strategy will allow CafePod to enhance its sales and profits through developing inn existing market. Disadvantages-Through this strategy company might even lost their loyal and old customers if the plan did not affect well. Market development-This strategy suggests company to develop and establish the business in new market. As CafePod can establish its business outside the UK with proper stability and capability(Doss, 2021). Advantages-The strategies provide an opportunity to grow in different market and provide various benefits regarding foreign investment. Disadvantages-With this strategy there are various risks that might affect the company and it is time and cost consuming process. Product development-This strategy suggest company to offer to new products and services in existing market. Company can enhance the taste and quality of the products in order o grow in the market. Advantages-It will provide various opportunity to CafePod in order to develop the new products to increase its operation. Disadvantage-The biggest disadvantage for the company is that it will avoid competitors and will only focus on the strategy. Diversification-This strategy will suggest that company needs to develop new products on non-existing market. But it has more risk factor involved new products of the company in order to establish in the market. Advantages-It provides various benefits in order to enhance growth in wide market. Disadvantages-There are several risk involved in this strategy. 4
Understanding competitive advantages In context to CafePod coffee Co. for developing the growth in the market. Company can enhance its position in the market through developing several strategies from the above such as product development. As it will help in establishing new brand image in the market an\d attract more customers. TASK 2 Sources of finance Bank loans and overdrafts-This is a flexible funding method with instant access. Small bank loans do not require collateral, but when a company raises large amounts of money, it must post some form of collateral. Then pay interest to the bank. Advantages: ï‚·The main advantage is that it is easy to arrange and the owner has to pay a certain amount of interest. ï‚·Companies can raise large sums of money for large projects from this source. Disadvantages: ï‚·If the owner exceeds the overdraft limit, the bank will charge a certain amount and the company must meet the deadline to repay the loan(Ghobakhloo and Ching, 2019). ï‚·Small businesses may find it difficult to borrow money from this source. Savings and friends-These are the most trusted resources. They offer low-interest rates. However, relatives and friends should be informed that the investment may lead to losses. Therefore, there is mutual trust to help each other, which is financially motivated. Advantages: ï‚·The company has the advantage of paying little or no interest. ï‚·The company can obtain appropriate support and advice from friends and relatives for success. Disadvantages: ï‚·Company may lose money or go bankrupt. ï‚·Conflicts may arise between family members. 5
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Mission- the main mission of the company is to provide coffee to each coffee lover customers. Objective- the objective of company is to build a strong brand reputation in the market. Products of the company-the main products of the CafePod are there premium quality coffee grounds and their coffee pods. Stakeholder- Stakeholders investing in companies are governments, investors, shareholders and suppliers. These stakeholders are the important for the organisation and will directly or indirectly influence the business. Employees, suppliers and managers are CafePod internals who can contribute to success of the company. They define strategies and plans to create systematic workflows within the organization. External stakeholders such as shareholders, governments and investors need to be financially stable and invest more in innovation, diversified product lines and achieving their goals(Irfan and Wang, 2019). Capital- the capital that is being required by CafePod for establishing business in Spain will be around £15k. for doing this company might needs sources of finance, for that CafePod can acquire bank loans. The company ought to without difficulty provide loans shape banks because of having meaningful goal and recognition into market. Short time period investment are constant deposits or financial institution loans. These budget most closing for 1 year. Long time period budget reassets are retained income and overseas direct investment. So, the bakery desires to acquire each supply for accomplishing long time commercial enterprise growth. Target- the turnover of the company in first financial year should be around £55k and the revenue of the same year should be around £30k. Operational plan-Company can develop the organisation function within the business as it is establishing in new market. Company might require to hire 20 employees in beginning and need to take decision and set committee to discuss further strategies. Resources-The company needs to focus on developing several resources for operation. Also, company needs the raw material with the best quality and organic in order to attract customers. Organisation needs infrastructure, ingredients, packaging material and monetary funds. Technology-According to CafePod Coffee Co's goal, the company requires modern technology to contribute to the supply of organic food. Technologies like digital tools, SEO, cloud computing. These will help attract large customers, understand their needs and wishes. Digital 7
It characterizes to a chart which presentations horizontal line series which describes the quantity of work done or goods manufactured in a specific time period directly comparing to the quantity which was planned earlier for the particular period(Otles and Sakalli, 2019). 9
SWOT- Strength- ï‚·Company do better when they enter a new market since the company develops a new taste relative to the competition. 10
They hire highly skilled workers. They successfully develop new items. Weakness- • There is little investment in research and development. • Inability to successfully integrate businesses into different working cultures. • Aside from their primary items, they are not successful. • They are unable to compete in taking market share away from rivals. Opportunity- • It can enter new markets with the permission of the government; • New consumer behaviour trends are emerging, which draw customers because they are more favourable presently(Nadir, 2021). • The market expansion will maximise the company's effort in comparison to its rivals. Threat- • There is fierce rivalry in this market since the major companies have already taken control of it, giving suppliers more power and causing them to dominate it. • Because the business only operates in one country, there is intense competition within that country. evaluation of business for the company According to analysis, creating an appropriate and successful business plan is crucial for the expansion of the company. Knowing about the strategies that can be employed in business growth is beneficial to business owners. It can assess the business's success by examining various risk variables and time frames(Leke, Chironga and Desvaux, 2018). In the case of CafePod Coffee Co., the firm may create a successful business plan by taking a variety of concepts and elements into consideration, enabling the company to achieve its growth objectives. TASK 4 Exit plan A business needs an exit strategy when ownership transfers, when the owner retires, and when the business goes bankrupt. Businessmen should be aware of a few things which are explained below- The period planned for the company’s operations. 11
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ï‚·Financial expectations and circumstances assumed at the start of the project. ï‚·The company’s outstanding debts, such as investors and creditors, must be paid in full before closing or terminating the business. Small business exit strategies that business owners can employ are further mentioned- Liquidation-A method of closing a business and selling its assets or repaying the amount of its creditors and other debts so that it is no longer liable in the market. Benefits- ï‚·The main advantage of this method is that the company is free from lawsuits. ï‚·The Managing Director will be released from debts and creditors. Drawbacks- ï‚·The downside is that all liquid assets are sold with the intention of paying dividends to creditors and allowing inventors to collect fees when the opportunity arises. ï‚·Owners may be required to pay debts to personal outsiders(Somohano-RodrÃguez, and et. al., 2022). Asset Closure and Sale-This route to exiting the business is to sell the assets immediately. If the relationship with customer breaks down, the company will be liable to its shareholders and other creditors to profit from sales of its assets. Ensure timely sale of business assets. Benefits- ï‚·The main claimable advantage is that the owner can pursue other projects and the owner can pay off individual debts. ï‚·The company can easily pay off its debt by selling its assets. Drawbacks- ï‚·The downside is that it can be a long process with multiple legal fees. ï‚·A new license is required or transferred to sell the property. Liquidating your business overtime-This is an easy option for choosing when your business’s finances are in chaos and your business will be closed. Also known as a lifestyle business. Entrepreneurs withdraw money from the business, although they reinvest it for the future. The positive side is that the business provides cash flow for a balanced lifestyle. On the downside, however, investors may find themselves dissatisfied with the company without any benefit. 12
Benefits- ï‚·The main advantage, it offers is that all disputes between creditors are terminated when the company is declared bankrupt. Drawbacks- ï‚·the organization does not have the right to do business with, or use similar trade names for, other companies that may be incorporated in the future. Sell the business to a known-owner can sell your existing business to a partner, customer, acquaintance, family, relative, manager, employee. In the sense that the buyer can get help and guidance from the previous owner. It can also be disastrous when disagreements arise between relatives. the owner can continue to participate in the project even after leaving the company. The next business owner may not set a relatively better price than the previous one, but may sell a discount. Benefits- ï‚·the buyer understands the business systems and processes and business continuity is achieved. Drawbacks- ï‚·The successor may need the original party for important coaching and mentoring. Sell the business in the open market-If business is sold to an unknown person in the market, starting a new company is the least risky option. Sellers may be unfamiliar with existing systems, customers, strategies, policies, etc., so they can make more money by selling in the marketplace. benefit from If the company's financials are attractive, it has monetary value. Buyers also benefit from brand building and customer relationships. Selling your business at an affordable price can take some time. Benefits- ï‚·Buyers get an established company whose products and services have already been tested. Drawbacks- ï‚·can create a bad reputation in the minds of your customers. 13
Sell to another company- In this case, a smaller company may be taken over by a competitor or company in the same industry. This can be a wise investment as it can help grow the buyer's business and reduce competition. A sense of responsibility lends itself to this acquisition. It doesn't take long to get used to the company in terms of work culture and dynamics. Considering that the sale price of the company will be higher. However, the company's employees could not accept the change(Sreih, Lussier and Sonfield, 2019). Benefits- ï‚·the owner can save time and potentially invest in their next project or venture. Drawbacks- ï‚·the owner may lose control over their business activities and operations. Evaluation of the exit plan From the above, CafePod Coffee Co is unable to expand its business, and is forced to choose between terminating the business or taking over rather than making the business in the red. In addition to the coffee shop, we recommend selling your business to another company. This is because transferring ownership to someone else is more profitable and also helps reduce competition in the market. It is beneficial to run a business efficiently as a company is unable to cope with challenges and environmental changes(Paiola and et. al., 2021). CONCLUSION To conclude the growth plan report above, a brief summary should be given and analysed. The first mentioned is CafePod Coffee Co., a small to medium sized company based in the UK. The report then analyses the key considerations of the companies being measured in order to assess growth opportunities in the context of the company. Pestle Analysis, Porter's Five Forces Model, and Ansoff's Growth Vector Matrix ID have been performed for the organization. Next, the report discusses the potential funding sources, pros and cons of each funding source. The next task is to create a business plan for growth. This includes financial information and strategic goals for the company's success. Finally, the report concludes with an assessment of the different ways small business owners can go bankrupt and the impact it causes. 14
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