Unit 42 – Planning for Growth

Unit 42 – Planning for
Growth

Table of Contents
Introduction......................................................................................................................................3
MAIN BODY...................................................................................................................................3
PART 1............................................................................................................................................3
Assessing key models SME's needs to consider in order to evaluate growth opportunities:......3
Discussing numerous ways through which the company can obtain funding:...........................6
Designing business plan for market growth :..............................................................................8
Part 2..............................................................................................................................................11
Evaluation of the exit and succession options for a small business and explaining about
benefits and drawbacks of each option.....................................................................................11
Conclusions....................................................................................................................................13
References......................................................................................................................................14

Introduction
Planning for growth is the strategic framework adopted by managers in order to allocate
right resources needed to accomplish growth objectives of the company. The process assist the
top level managers to identify and evaluate growth opportunities in the external market and
allows them to explore opportunities by taking strategic actions. For this report Coffee Republic
is taken into focus. The Coffee Republic is the famous coffee restaurant chain brand situated in
London and founded in the year 1995. The report will highlight and evaluate strategic business
models such as Porter's generic and Ansoff' s growth model to assess the growth opportunities
present in the external market conditions. The report will further critically evaluate the methods
by which the company can raise funds to support its growth opportunities. In addition to this, the
report will include designing of business plan and assessing strategies essential for growth of the
business. Moreover, the report will also critically analyse various ways through which the
business owner can exit from the business.
MAIN BODY
PART 1
Assessing key models SME's needs to consider in order to evaluate growth opportunities:
The small and medium enterprises follows Key strategic models in order to identify and
growth opportunities present in the external market which are:
Porters Generic Model:
This business framework is undertaken by firm in order to enhance growth opportunities
and gain a competitive advantage in marketplace by deeply assessing its cost and product
development strategies (Firoz Suleman and et.al., 2019). In context to Coffee Republic, this
business model will support the company to analyses and evaluate its competitive advantages
that can allow it to tap into unexplored market successfully. The following elements practised in
this model are:
Cost Leadership:

This element of Porters model will assist the company to gain competitive advantage in
market when the cost of products and services are affordable as compared to their competitors.
This allow the firm to make optimal utilisation of resources with minimum wastage in order to
increase profit margin.
Differentiation strategy:
This strategy assists the company in making diverse products and services different from
the competitors in order to attain monopolistic position in the marketplace. This will support the
company to reach more customer base than competitors and leads the firm to attain competitive
advantage in the market by spending more on research and development areas(Vieira and
Ferreira, 2020).
The company can focus on enhancing growth opportunities of the business by laying
concentration on finding cost effective strategies or developing new variants of the same
products. This strategy is classified into two types:
Cost focus: The company can tap into unexplored market by focusing on lowering their cost of
products as compared to their competitors. This will help the company to addition chance of
making larger profits.
Differentiation focus: In this, the company can focus on providing different variety of products
in the foreign markets in order to enhance its competitive position in the market.
In context to Coffee Republic, the firm should consider Cost leadership strategy while
developing its growth strategies. This strategy will assist the firm to successfully attract the large
number of customers which will support the firm's developmental strategies(Chen and Wang,
2021).
Focus strategy:
PESTLE framework:
This strategic analysis tool will help the company to timely identify and evaluate the
forces of external environment in order form market growth strategies properly. In context to
Coffee Republic, this tool will support the firm to analyse various opportunities and challenges
present in the external market conditions that are critical while formulating growth
developmental strategies for entering into foreign market. The following are the external factors
that can impact strategies of Coffee Republic are:
Political factors:

The Brexit policies in UK can possess a challenge in the growth development strategies
of the business by imposing trade restrictions. The political influence into cafe industry can also
impact its growth objectives(Mishra and et.al., 2019).
Economic factors:
The Brexit policies can change the economic environment of the UK which can
negatively affect the pricing strategy of the company. It is essential for the company to make
effective analysis for identifying impact of economic forces.
Social factors:
The change in the behaviour of customers towards consuming healthy drink provides an
golden opportunity for the firm to enhance its operations in the UK market or into foreign
markets.
Technological factors:
The change in technologies such as online registration or online delivery provides an
opportunity for the company to adopt these changes in order to boost its growth developmental
strategies.
Legal factors:
The new and stricter food safety rules in UK provides an opportunity for the company to
further explore as it follows strictly with global safety standards for manufacturing products.
Environmental factors:
The increase in the focus to use recyclable items in packaging of products influence the
firm to adopt with the new policies in order to enhance its market growth strategies.
Ansoff's Growth Vector Matrix:
This business framework is critical in supporting top level managers to evaluate
challenges and risks of entering into new market by practising systematic risk analysis
(Kampanje, 2020). In context to Coffee Republic, this strategic tool will assist the company in
conducting risk evaluation of tapping into new markets or in increasing the portfolio of products
in the domestic or international market. The following are the four main elements of Ansoff's
matrix are:
Market penetration:

This option for market growth is considered as safer option as it deals with expanding the
growth of established products in the domestic market after clearly analysing the current trends
of the domestic marketplace.
Product development:
This approach for market development deals with launching new range of products into
existing market conditions after assessing properly the needs and preferences of the customer
present in market.
Market development:
In this approach, the firm enters into new market conditions with their existing products.
This option for market growth is riskier option as the firm has to properly analyse unknown
market conditions in order to mitigate with any challenges(Chen, 2019).
Diversification:
This option for market development is considered as riskiest option as it includes
exploring into foreign marketplaces with the entirely new range of products in order to improve
competitive position.
Recommendation
In context to Coffee Republic, It is recommended that the company should undertake
Market development approach as this will allow the company to tap into unexplored market
conditions and also supports in attracting new customers which can enhance competitive edge of
its business as compared to its competitors.
Discussing numerous ways through which the company can obtain funding:
The funds are necessary for the survival of every organisations and in order to carry
growth strategies in the proper manner. In context to Coffee Republic, the company can raise
funds after assessing the critical aspects of the external and internal sources of funds available. In
addition to this, the company should consider cost and risk associated with each source of funds
that will help it to select the best source available.
Internal sources for arranging funds are:
Owner's capital:
The fund which is arranged by owner itself in order to perform or carry out market
growth activities without disturbance. This type of fund is basically provided by owners as an
additional fund required to expand business operations(Ante, 2021).