Planning for Growth: A Case Study of CafePod Coffee Co.

This report analyzes the planning for growth of CafePod Coffee Co. It includes an explanation of their basis of competitiveness, assessment of available business opportunities, critical evaluation of financing growth and funding options, appraisal of exit and succession options, and recommendations for the business. The report also includes a business plan structure and action plan.

UNIT 42 – PLANNING FOR
GROWTH

TABLE OF CONTENTS
INTRODUCTION................................................................................................................................3
MAIN BODY.......................................................................................................................................3
1. An explanation for the basis of competitiveness for CafePod Coffee Co. business....................3
2. Critically assessing available business opportunities..................................................................4
3. The critical assessment of the options for growth, applying Ansoff's growth vector matrix with
an assessment of the risk of each option..........................................................................................5
4. Critical evaluation of financing growth and funding options......................................................7
5. Appraisal of exit and succession options for the business...........................................................7
6. Recommendations for CafePod business.....................................................................................8
7. The business Plan.........................................................................................................................9
CONCLUSION .................................................................................................................................12
REFERENCES...................................................................................................................................13

INTRODUCTION
In the recent scenario of competitive business environment, it has become extremely
important for the small business enterprises regardless of varying industries to adopt a proper
planning structure for future growth. Small businesses need to survive in the cut-throat market
competition and gain sustaonable profitability in their respective sectors if they plan their growth
accordingly (Sharma and Tewari, 2021). The following report will precisely analyze this conceptual
framework in the chosen context of the UK based coffee craft business 'CafePod Co' which was
established in 2010-11 and is currently located on 5 Manfred road, London. This small business
enterprise that started out as a local coffee brewing shop is abundant now with a lot of scope to
embark itself in the larger markets. This report will critically analyze the company's competitive
edge, examine several of its expansion factors along with assessing the options for its funding
sources for financial growth. Further more the report will also evaluate the aforementioned
business' exit or expansion options in conjunction with its related advantages and drawbacks. The
research study on planning for growth topic for the CafePod Co business wll also include justifiable
growth recommendations along with an affiliated business plan structure along with an action plan.

MAIN BODY
1. An explanation for the basis of competitiveness for CafePod Coffee Co. business
The selected business company CafePod Co falls under the umbrella of small and medium business
enterprises that in reality function on a small scale of production but aspire for transitioning to the
large scale market platform with a planned structural growth. Based in London, UK, CafePod
company caters to a wide customer segment with its varied and differentiated product range which
includes blended coffee in numerous ranges like whole roast bean, decaf nespresso, etc. Further
planning for its business expansion requires strategic thinking of its managing owners towards
gaining a competitive edge (Beninger and Francis, 2021) over other similar business enterprises:
 Factor of unique products: As compared to the other established coffee houses, the
aforementioned CafePod craft coffee business has a unique product offer range when it
comes to freshly brewed coffee. The entire business motive of this company is to offer its
customers the exciting joy of both home-made coffee lookalike and delivering coffee at
home. The business idea was incepted when its owner stumbled across a coffee plantation
during his US visit which inspired him to offer differentiated products to its homeland UK
customers.
 Factor of homeliness: When any new business enterprise is set up the purchasing population
always assumes that some exotice goods and product line is going to be introduced. The
CafePod company did the same but with a touch of feel-good cultural and regional coffee
taste in its goods which seems to give its customers a sense of attachment and raises its
unique selling point.
 Sales augmentation at reasonable prices: The business got kickstarted with a broad variety
of caffienated goods that not only became intensely popular initially in its local areas but
also word spread about it and more and more people belonging to different segments,
backgrounds and age groups are now included its cutomer appeal framework because the
cafe has set affordable prices for its goods that makes the goods more attractive and feasible
to its buyers than its big rivals such as Starbucks (Crick, 2019).
 New techniques and equipments used: The beans that go in the production and blending of
the coffee blends and powders used in the cafe's products are of lower altitude regions that
adds a robust, strong and refreshing taste. The coffee makers also make use of UTZ
certification of coffee use of the registered Nespresso Compatible range along with the use
of several advanced machineries (Seo and Cho, 2020).

2. Critically assessing available business opportunities
The above laid out mentioned points regarding the different aspects of qualitative features
that the CafePod craft coffee Co has for giving it a certain competitive edge hint at a further growth
of the business due to its consumer market favourability. The small business enterprise can grow
and propser nicely and successfully on a national and international platform if it incorporates certain
generic strategies that are shown below through the application of the analytical Porter's generic
strategies framework:
 Cost Leadership This strategy regarding the cost leadership structure offers a good scope for
the coffee business to showcase its existing and newly launched produts at a reasonably low
and preferred industrial prices by targeting a wider customer market segment. This can
prove useful in increasing its ascertained market share growth rate as the selling price and
production costs get reduced resulting in profit maximization (Islami and et.al., 2020).
 Differentiation The generic competitive strategy of differentiation includes a qualitative
capacity of production with the wide scale and selective provision of its on-menu goods that
can help in placing a uniquely built and planned proposition for the broadening of its
customer influx as compared to its standing local and global competitors. This strategic
differentiation can be achieved through researcing about the numerously popular and in
vogue preferential tastes of its consumers. Also, another defferentiating factor that the
company can adopt for its business growth is the amalgamative offer of certain coffee table
games, open mic saturday nights, side-stand bookshelf, etc. that will be a strong unique and
attractive feature for customer appeal.
 Cost Focus The next strategic factor of this analytical model targets a niche market and
offers product or services at a lower price which involves a lot of investigative attitude
towards conducting market research to find out which particular sections are suitable at what
prices. The Focus strategy has to be very transparent pertaining to its market cost sensitivity.
The core aspect of it is to add something new and productive to the existing market. The
cost threshold needs to be low at first, and then the business company can take it up to
higher levels once it flourishes.
 Differentiation Focus The differentiation focus is one of the best generic focus strategy that
puts a major amount of focus on a specific niche market but on the same side also offers a
coffee product which has a unique selling factor in the market. Increasing importance should
be given to product features rather than its cost. The differentiation aspect is one the trend
setting strategy too, the reason being that it consistently keeps on updating existing products
and makes a mark against other businesses in the prevailing industry.

3. The critical assessment of the options for growth, applying Ansoff's growth vector matrix with an
assessment of the risk of each option.
The Ansoff's matrix helps to identify the opportunities that helps the organization to grow in
market through developing the new products and services and by tapping into the new markets and
the new places (Kurniawan, Iswahyudin and Suciati, 2020). There are four types of strategies
involved in Ansoff Matrix.
Market penetration- This strategy followed by the organizations that tried to grow In the existing
market with the existing offerings (Cleberg, 2019). This can be done by accomplishing the
following things-
1. Reduce the price of goods available in the market.
2. Increase in promotion techniques.
3. Acquisition of rivals in market.
Product development- Product development strategy is related to launching new products and
services in the existing market in order to maximize profits in the market. The product development
strategies can be achieved through-
 Investing in research and development process.
 Buying products of others and selling into company's brand name.
 Acquiring right to produce someone else's products.
Market development- In the strategy of market development the organization to grow into the new
marketing by offering same products to raise profits. This can be accomplished by-
 Targeting new consumer segment in new market.
 New areas and the foreign market.
Diversification- Diversification is an organization means to grow in market by offering new
products into the new markets. This is riskiest as it involves both new market and the new product.
The diversification strategy can be accomplished by following things that are as follows-
 Investing in research and development process of the organization.
 Targeting different consumers in new market.
The cafepod company can use the product development or the market development strategy
as company is already offering unique products and services in the market. Unique products of the
company will make sure profits to the company in new products. Furthermore, the cafepod

company can innovate more products to retain existing consumer in market.
4. Critical evaluation of financing growth and funding options
Governmental incentives – At the point in the business growth when the CafePod craft coffee starts
witnessing a good enough profit margin then it can further think of maintaining good relations with
the legislative government of UK. This will not only help the business in gaining a solid partner but
will also be good source of funding needs completion (Donald, 2020).
Getting loans from bank – There are a lot of existing bank structures that offer a lot of services and
provisions regarding fresh start ups or small and medium business enterprises. The mentioned
CafePod Co can also easily contact the bank to check whether it has a good offer for loan setting or
not that it can benefit from. In turn the bank will also gauge wheher the company applying is
eligible or not as per its funding criteria.
Investments – The CafePod business enterprise can also use its financial acumen and utilize its
monetary resources for setting good , profitable investment deals with either similar small business
enterprises so that both parties can invest in each other's business in a cillaborative manner or else it
can also convince other prospective individuals or groups to invest in its business for acceptable
returns on both sides (Gherghina and et.al., 2020).
Crowd funding – The Cafe Pod business company can also make use of modifying its website in a
more lucrative manner so that other powerful websites that are available these days can notice it and
if CafePod approaches them for using their paid and organic sales and promotion, then crowd
funding could become possible for the company. Cthe prospect of crowd funding deal is a good
source of gaining both financial resource accumulation and public recognition for the business. It is
an extremely creative pathway for setting a long term financial pool but only according to the terms
of website project limitations.
5. Appraisal of exit and succession options for the business
Direct exporting
For the direct entering the new market firstly CafePod Co needs to research about their
customers as per likes, dislikes, taste and preferences. This is because directly exporting of its
products to customers is not so easy. First they have to know about their market and their
competitors. Direct exporting helps in better communication with the buyers and increase control of
their business reach. Direct exporting of a product is good strategy for entering the market because
all control is in the hand of manufacturer/company owner (Di Cintio and et.al., 2020).
Licensing

A licensing in a business includes two companies one company gives rights for using patents
and copyright to other company. It is the best way to grow the business. In international market
licensing provident rights to the other company to use their name for making the products but for
this they have to pay small amount of revenue to the licensing company. Licensing helps the firm to
sell there product without any threats. Licensing help a company to sell their product in different
countries. Generally licensing help the new company to grow the business because they don't have
manufacturing they are using another companies rights.
Franchising
Franchising is a business growing strategy. CafePod can also encourage the people who are
interested to start their franchise with them. The company has to provide a licence to open their
franchise by taking a certain amount of sales profit from their business operations. A good brand
franchise always profitable because of their goodwill. For an entry mode into foreign market
opening of franchise is good idea because it contains less risk as compared to opening a new
business.
Greenfield ventures
It contains a very high risk of cost association for either expanding into an existing market
or entering a new one (Husairi and et.al., 2021). In this the company can construct new company or
business production house to extend the sales of its branded store. It contains the high level of risk
and control on the business activities. In greenfield investment the CafePod company establishes its
business operations from different places. The parent company of UK will have a fully control over
the company. The parent company also called promoting company because it promotes and control
over the new company.
6. Recommendations for CafePod business
Local networking
The small scale enterprise of CafePod craft coffee business can and should necessarily
collaborate with its local counterparts so as tio maintain a good natured balance in their
neighbourhood areas. The purpose of local networking is not only to kep good relations but also to
mix and match their products for surprising their customers with integrated activities and surprising
offers. Localization is always helpful and supportive in making friendly terms with other
jurisdictional businesses (Forkmann and et.al., 2018).
Customer market segmenting
The CafePod coffee business can benefit the most in its business venture exaonsion through

digital marketing. Segmentation is a process of dividing the customers into different groups. Every
single customer is divide in different group so it is easy to sell the products according to their need.
Demographics shows that for whom the product is make according to age, education, gender, etc.
Psychographics element include targeting customers as per their tastes, inclinations, etc. Focusing
on lifestyle traits include hobbies, entertainment preferences, etc.
Digital marketing
Traditional marketing mainly focuses on selling products with the intent of profit
maximisation which increases the sales and profit but it leads to a lack of customer satisfaction. The
use of digital marketing channels can easily help and support in the dessemination of its products.
The digital marketing strategy employs use of certain powerful modes and platforms such as social
media tools, credible web portals, banner ads, customized media, and engaging blog content that
increases sales and revenue.
7. The business Plan
Company
Cafepod company was an independent company formed in 2011 and provide restaurant services in
London. The company provides high quality and the good testing coffee in London. The Creativity
and passion of the owner pushes company to grow beyond its boundaries.
Mission statement-
The mission of Cafepod company is to provide consumer with the freshly roasted coffee with the
excellent services at affordable rates.
Vision statement-
The vision of the Cafepod company to become a Cafe that is beyond a cup of coffee.
Products and services-
The Cafepod company offers wide variety of coffee in the market. The company provides
categories like smooth, ristretto, intense etc. Cafepod also offers food and beverages services in its
restaurants.
Market analysis-
The market analysis of Cafepod company is as follows-
PESTLE analysis-
The PESTLE analysis helps company to know various opportunities and different types of

consumer expectations in market. If pestle done carefully will help company to grow it services on
wider range that will at the end will help the company to attain maximum profits in the market.
Political factor-
Political factor is the factor that has strong impact upon the business. The long sustainability in the
business can only be gain with the help of political factors (Nandonde, 2019). The tax policies and
the trade regulations are in the favour of Cafepod company that will help the company to grow in
market. Not only this the government incentives are also in the favour of the company.
Economical factor-
The Economic factor helps the company to achieve the economic objectives of the company. The
raising inflation rate have negative impact upon the survival of the Cafepod co. as it increases the
cost of raw material that in turn increases the rates of products offered by the Cafepod. co. the
economic factors helps to maximise the economic benefit of the company.
Social factor-
The social factors like the luxurious lifestyle favours Cafepod. Company. The high standards of
Cafepod are been set up according to the behaviour of the consumer in the market. Aesthetic and
unique deign of Cafe is turning its profits higher in the market. The amount of money spend by the
company in the interiors of the cafe will help to attract larger section of consumer in the market
(Keeler and et.al.,2019).
Technological factor-
Technological factors are needed to accelerate the growth of the organization. All the emerging
technologies in restaurant business has been acquired by the company for ensuring that all the
consumers are quickly served (Putra, 2019). It also ensures long term survival of the business and
help cafe to compete with other already existing cafes.
Legal factor-
The legal factors are also important to understand the behaviour of the consumer. Legal factors
includes different laws and regulations that has impact on existence of the company. The Cafepod
co. can face severe expenses if it does not host the legislations of the country.
Environmental factor-
Environment factors are important to because it increases the sustainability and protection of
environment. Cafepod company should have a depth understanding of all the laws to comply with
all the laws in the market. The reusable plastic is the best step company took taking in concern the
environment factors.

Competition analysis-
Rivalry-
The already established Bakeries are the critical competition for the Cafepod company. The existing
reduces the chances of high profitability which is a negative sign for the company.
New entry-
New entry means entry of new competitors in the market. Getting into this industry is not an easy
process, it requires lot of time, efforts and money. Not only this the risk of getting into the restaurant
business is also quite higher. It will impact the firm's profitability.
Power of supplier-
The power of supplier is not that high as there are various options for supplier available with the
Cafepod company. The more suppliers always reduces the power that they can hold in order to
impact the supply of the product in the market.
Power of buyer-
Power of buyer is very high as there are various restaurants in the market that offers the same
product. Creativity and innovations in the products are the only way to survive in the market.
Cafepod is trying its best to come with different products and services that helps them to retain
consumers (Boulet, Hoek and Raven, 2021)
Threat of substitute-
The threat of substitute is also quite high because of the various and different restaurant services
available in the market. The threat of substitute is getting higher with increase in the restaurant
services. This can only be avoided with regular developments in the product.
Marketing strategies
marketing mix
Product mix-
The product mic of Cafepod company includes the products that the company provides in the
market (Thabit and Raewf, 2018). It is the restaurant business that provides various kind of food
with different beverages. The coffee of Cafepod are been offered with different taste and flavours.
The different flavours are the key that has attracted consumer of the Cafepod.
Price mix-
The price mix of Cafepod has been set up in such a way that all the consumer can afford products of

the company easily. The price is very important elements for any business as Cafepod already
knows about the competition that it is facing in the market, it has set up the prices of the products
accordingly.
Promotion mix-
The promotion mix of the company can be seen from the various kind of marketing techniques that
it uses. The Cafepod co. is very active on social media platforms as the usage of consumer are
increasing day by day. Cafe also uses other offline advertisement tools as well.
Place mix-
Cafe pod Is providing home delivery services as well in the market. Cafe pod has been using its
online platforms to sale it products in the market. The cafe has been able to target more consumer
because of home delivery concept.
Budget analysis
Start up expenses
Legal $1800
Logo & patent $100
Licence expenses $5000
Application contract $6000
Web development $1500
Insurance expensees $1000
Computer and accessories $11000
Event management software $6000
Other Expenses $1000
Total start up expenses $33400

CONCLUSION
From, The report above it has been addressed that the planning is essential all the small
organization, without growth it is not possible to survive for longer period In the market. The report
includes the various opportunities available with the Cafepod company and the various option and
source of funding that Cafepod will need to grow its consumer base and increase profitability in the
market. Above report also addresses the opportunities that are available to Cafepod by applying
Ansoff Matrix. The market development and product development are the two opportunities that
Cafepod can use to expand its business in the market. This report further, also discusses exist and
succession options, with benefits and drawbacks that it has. Lastly, the report has discussed the
recommendations and the business plan that will enhance the sales of the Cafepod in the future
ultimately.
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