Business Growth and Sustainability: Cardiff Cafe Strategic Plan

This report provides a strategic plan for a cafe in Cardiff, focusing on managing business growth and sustainability in a competitive market. It explores various growth models and strategies, including entrepreneurial character, business culture, company strength, and business strategy. The report analyzes market saturation, dissatisfied customers, and ineffective business strategies as potential barriers to growth. It also examines growth through merger, acquisition, joint ventures, and innovation. The strategic plan includes a five-year business plan emphasizing mergers, acquisitions, and joint ventures to increase market share and profit margins. Furthermore, the report assesses the Greiner growth model, outlining stages of growth through creativity, direction, and delegation, and how a cafe can navigate these stages to achieve sustainable growth. The report also provides a table summarizing growth strategies, timelines, and measurement methods.

Managing Business Growth
and Sustainability
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
STRATEGIC PLAN .......................................................................................................................3
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
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INTRODUCTION
In order to succeed in the competitive market, it is essential for management to focus on
managing their growth and sustainability (Beckmann, Hielscher and Pies, 2014). However, there
are different ways through which management of the organization would manage their growth in
the competing industry that is through using different growth models, growth strategies so that
they can ensure proper growth and sustainability. The present report focuses on framing future
strategic plan for cafe in Cardiff that is one of the largest territorial divisions in Wales. The report
will further emphasize on assessing different growth model and strategies for the cafe so that
they can manage new plan in Cardiff. Furthermore, the report will also assess the different
growth model that is being used by the organization in order to manage the future growth.
STRATEGIC PLAN
Strategic plan is an essential procedure that supports the management and organization to
undertake effective decisions regarding future of company so that they can ensure proper growth
and success in the market. The strategic plan mainly focuses on defining mission of organization
as well as assessment of current state of the organization so that they can plan and easily allocate
required resources within the organization (Gao and Bansal, 2013). The plan cafe in Cardiff is an
effective option as it will result in enhancing business growth as well as sustainability in the
beverage market. Depending upon the extent of business or organization, strategic planning for
cafe must be done for future so that they can manage growth in future also. In order to ensure the
sustainability of cafe in Cardiff it is essential for the manager to focus on the different changes as
well as determining opportunities existing in the external environment for the growth of the
enterprise. In order to manage the business growth, there are different ingredients of growth
success which can be used by the cafe (Seebode, Jeanrenaud and Bessant, 2012). The different
ingredients of growth are-
1. Entrepreneurial character- The foremost element of growth include entrepreneurial
character that is owner or manager of the cafe must have adequate and competent
characteristics as well as skills which would assist in managing and adapting change
within the business.
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2. Business culture- Another element of attaining growth in the cafe is ensuring effective
business culture that is leaders or manager within the Cafe must have growth extent or
ambitions that assist them in managing the growth (Jones, Hillier and Comfort, 2016).
3. Company strength- In addition to this, another ingredient of growth for planning the
cafe in Cardiff includes strengthening the company's capabilities and strength so that they
can manage business growth in the competing environment (Dauvergne and Lister,
2013). However, it will also support cafe manager or owner in understanding their
customers who will purchase the beverage product or coffee from them instead of their
competitors.
4. Business strategy- Another determinant that supports the organization in attaining
overall growth is the business strategy of the organization. Selecting an effective business
strategy supports the organization as well as plan cafe in the future to attain higher
growth. However, selecting an ineffective business strategy may also act as disastrous for
the organization as it will reduce their productivity (Epstein and Buhovac, 2014).
With assessing the determinants of growth there are different barriers that affect the
business growth that is market saturation. It is a situation under which the demand of certain
products gets diffused in the market. However market saturation generally arises with changing
purchasing power of customers, decrease in the requirement of customers, obsolescence etc.
another obstruction in the growth include dissatisfied customers. For instance, if the customers
are dissatisfied with the taste of plan cafe it may results in affecting the growth of plan cafe.
However, dissatisfied customers will not repeat the purchasing activity (Rohrbeck, Konnertz and
Knab, 2013). In addition to this, if company chooses the wrong or ineffective business strategy
then it may also adversely affect the growth of overall business. As, ineffective business strategy
would affect the overall operation of the business as it results in occupation financial losses for
the firm.
In addition to this, there are different growth models which can used by the cafe manager
or owners to ensure potential growth within the market by focusing on Greiner model, Klofsten,
Growth through merger, acquisition or joint venture etc. Business plan generally focuses on the
time period of five year under which cafe in Cardiff emphasizes on managing the business
growth in future through merging, acquiring or forming joint venture with another existing cafe
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or lounge so that they can easily increase their market share as well as the profit margin. As per
the view of Urban and Naidoo (2012) merging is an effective growth option that support two
organizations to become a single entity. Growth through merger is undertaken by the company to
amend their stakeholder value for long term and also improve overall performance of the
company (Urban and Naidoo, 2012). However, the benefit of enabling merger that is merging
activities and services among the new cafe in Cardiff manager or owners can easily assess the
funds as well as assets that would support in new development (Schaltegger, Lüdeke-Freund and
Hansen, 2012). In addition to this, the benefit of merger to the cafe is that it would assist in
accessing large audiences that further enhance or increase the market share.
However, the five year business plan for cafe in Cardiff must also focus on managing
business development through focusing on acquisition technique under which the cafe in Cardiff
buys or acquire company’s assets as well as ownership to control the firm. However, growth
through acquiring the business will be beneficial for the cafe in the future as it will assists in
reducing the costs associated with setting up cafe in Cardiff (Schaltegger, Lüdeke-Freund and
Hansen, 2012). In addition to this, with the help of acquisition in the future it would also support
cafe in expanding their market reach. Moreover,
On the other hand, the future strategic plan will also include business growth through
innovation. An innovation is defined as totally unique thought which is being adopted by the
organization to gain competitive advantage as well as it will also support the firm in gaining long
term growth. For instance; the cafe must introduce new flavour coffee drink which is not
introduced by any other cafe to serve their customers. Thus, it will be considered as a key aspect
for enabling the business growth and sustainability in competing market (Beckmann, Hielscher
and Pies, 2014). In order to extend the product life cycle of cafe products, it is essential for
business to introduce new flavour drinks and beverages that would attract customers towards
their products. However, in future to gain competitive advantage from their rival companies the
cafe must make innovation in their coffee products by serving new coffee products to the
customers.
The strategic plan for cafe also focuses on attaining future growth through joint venture.
If two or more business units come together and brings out a specific work by providing
resources and expertness, then is known as joint venture (Bansal and DesJardine, 2014). As for
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the setting up cafe in a new city Cardiff, joint venture could be help in reducing risk. Through
joint venture, cafe can have more resources as two firms will be joining together that would
increase the availability of capital and other resources too. This can help cafe to open their hands
for new markets all around. Cafe will require new and improved technology for creating a setup.
Joining with other firms, will help cafe to generate new and improved technology for themselves
(Winter and Knemeyer, 2013). It can also affect in a way that if one firm is efficient in resources
and other one in technology then it will be beneficial for both the firms. As being in a joint
venture they can interchange there uses. This venture can help cafe to establish their name
among big market by using the existing fame of other firm. It can also help cafe to use the
existing distribution channel of other party. Joint venture can enable cafe to have expertise staff,
greater floor capacity and even sound financial resources (Girotra and Netessine, 2013).
For instance; through venturing with another existing firm or cafe in Cardiff, the plan
cafe would result in increasing their resource base. Therefore, in order to grow the business, plan
cafe would manage and utilize their income and resources in effectually so that they can easily
expand their business activities. However, all the organizations do not operate their activities to
earn or generate profit but they generally focus in sustaining business in the competing
environment. Thus, managing cash within and outside the organization is essential for the plan
cafe to perform their daily business activities. Another example; the cafe can serve maximum 50
customers per day and operates full week. Thus, through enabling joint venture with another
firm, they must utilize the resources of restaurant to which they have alliance in order to sustain
and grow their business.
Growth Strategy Time-line How will this be measured
1. Merger & acquisition 3 years The growth strategy that is being used by plan
cafe in the future is merger and acquisition
(Gao and Bansal, 2013). The success of
growth strategy will be measured by assessing
the financial performance of the both the
organization.
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2. Joint Venture 2 years On the other hand, in future plan cafe will also
use joint venture as growth strategy that will
support the cafe in expanding their market and
size. The growth strategy will be measured
through assessing the profit margin of both the
organization that has made alliance.
However, the future strategic plan for cafe must also include assessing Greiner growth
model that would support cafe to develop their existence in the Cardiff. The Greiner growth
model basically focuses on different phases through which organization operates their activities
and they grow. All form of organization experiences these stages of growth however each stage
is precede by the crisis or a situation under which the organization needs to resists the change if
they want their cafe to grow in the market (Seebode, Jeanrenaud and Bessant, 2012). The crisis
or problem that arises at the end of every stage is termed as turning point which is required to be
overcome to manage the proper growth.
Greiner stage 1: Growth through creativity
The foremost stage in the growth is growth through creativity at this stage entrepreneur is
engaged in creating the coffee products and opening up the markets under which they can sell
their products. At the starting phase there are not much staff as well as there is informal
communication that result in arousing leadership crisis (Jones, Hillier and Comfort, 2016). This
phase requires professional management as well as leader who can proceed further stage in the
growth model. Therefore, human resource management plays vital role at this stage to overcome
the leadership crisis.
Greiner stage 2: Growth through direction
Another stage within the model include growth through direction that is manager focuses
on separate activities related with the production as well as marketing of the cafe products that
would ensure their future growth. However, there is only single person that directs and lead the
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activities of cafe in order to ensure proper processes. Therefore, this phase ends with gaining the
autonomy crisis.
Greiner stage 3: Growth through delegation
Under this growth model stage middle level personnel in the cafe have to react upon the
opportunities so that they can ensure proper growth in the new market (Loorbach and Wijsman,
2013). However, top management as well as owner mainly deals with the observing and
monitoring the large issues. This growth stage ends with arousing the control crisis as owners or
top manager keep focus on monitoring and dealing the problem they do not focus on controlling
process.
Greiner stage 4: Growth through coordination and monitoring
Another stage in the model include growth through coordination and monitoring that is
business units are re-organized into different product groups so that they can coordinate
accordant with the goals and objective of the cafe (Dauvergne and Lister, 2013). However,
payment is being shared from the profit schemes of the organization that is being aligned with
the organizational objectives and goals. However, the growth phase ends with the Red-Tape
crisis that basically focuses on introducing organizational new culture and structure so that they
can ensure proper growth through coordination and monitoring.
Greiner stage 5: Growth through collaboration
However, another stage in the growth model include growth with the help of
collaboration that is staff within the cafe are grouped in the structure so that all the staff and
employees within the cafe jointly renders the proper services (Willard, 2012). Furthermore,
manager of cafe must also ensure team-based financial rewards so that they can ensure proper
growth of the cafe. In the present scenario, with the help of different technological information
system they can easily manage the business growth. However, the growth phase last with
arousing the internal growth that can be ensure by developing partnership with completing
organizations (What is the growth phase model, 2016).
Greiner stage 6: Growth through extra-organizational solution
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This last stage in the growth model is recently added by Greiner as it suggests that cafe in
the future will continue to grow their activity with the help of merger, acquisition or other
solution so that cafe can attain growth in the future.
Therefore, it can be stated that Greiner growth model supports the manager to focus on
the growth of the cafe in Cardiff as well as it also ensure better plan to cope with the future
growth transition so that in future they can manage the business growth (Morecroft, 2015). In
addition to this, this model is also useful for the cafe as it supports the business to review the
crisis that arises at each and every phase of growth model so that they can adapt the
circumstances in such a manner that they can easily attain business growth (Werbach, 2013).
CONCLUSION
The above report summarizes that defining strategic plan is an effective process that
support the organization in taking effective decisions regarding allocating the resources as well
as activities so that they can attain future prospective. However, the report has also evaluated
different growth models that plays essential role in attaining potential sustainable growth of the
business. In addition to this, the report has also measured the significance of Grenier growth
model for managing the business growth and sustainability. The growth model focuses on six
different stages that assist the plan cafe in enabling growth within the competing market.
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REFERENCES
Books
Dauvergne, P. and Lister, J., 2013. Eco-business: a big-brand takeover of sustainability. MIT
Press.
Epstein, M. J. and Buhovac, A. R., 2014. Making sustainability work: Best practices in
managing and measuring corporate social, environmental, and economic impacts.
Berrett-Koehler Publishers.
Morecroft, J. D., 2015. Strategic modelling and business dynamics: A feedback systems
approach. John Wiley & Sons.
Werbach, A., 2013. Strategy for sustainability: A business manifesto. Harvard business press.
Willard, B., 2012. The new sustainability advantage: seven business case benefits of a triple
bottom line. New Society Publishers.
Journals
Bansal, P. and DesJardine, M. R., 2014. Business sustainability: It is about time. Strategic
Organization. 12(1). pp.70-78.
Beckmann, M., Hielscher, S. and Pies, I., 2014. Commitment Strategies for Sustainability: How
Business Firms Can Transform Trade‐Offs Into Win–Win Outcomes. Business Strategy
and the Environment. 23(1). pp.18-37.
Frias‐Aceituno, J. V., Rodríguez‐Ariza, L. and Garcia‐Sánchez, I. M., 2014. Explanatory factors
of integrated sustainability and financial reporting. Business Strategy and the
Environment. 23(1). pp.56-72.
Gao, J. and Bansal, P., 2013. Instrumental and integrative logics in business sustainability.
Journal of Business Ethics. 112(2). pp.241-255.
Girotra, K. and Netessine, S., 2013. OM Forum-Business Model Innovation for Sustainability.
Manufacturing & Service Operations Management. 15(4). pp.537-544.
Jones, P., Hillier, D. and Comfort, D., 2016. Sustainability in the hospitality industry: some
personal reflections on corporate challenges and research agendas. International Journal
of Contemporary Hospitality Management. 28(1).
Loorbach, D. and Wijsman, K., 2013. Business transition management: exploring a new role for
business in sustainability transitions. Journal of Cleaner Production. 45. pp.20-28.
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Rohrbeck, R., Konnertz, L. and Knab, S., 2013. Collaborative business modelling for systemic
and sustainability innovations. International Journal of Technology Management 22.
63(1-2). pp.4-23.
Schaltegger, S., Lüdeke-Freund, F. and Hansen, E.G., 2012. Business cases for sustainability: the
role of business model innovation for corporate sustainability. International Journal of
Innovation and Sustainable Development. 6(2). pp.95-119.
Seebode, D., Jeanrenaud, S. and Bessant, J., 2012. Managing innovation for sustainability. R&D
Management. 42(3). pp.195-206.
Urban, B. and Naidoo, R., 2012. Business sustainability: empirical evidence on operational skills
in SMEs in South Africa. Journal of Small Business and Enterprise Development. 19(1).
pp.146-163.
Winter, M. and Knemeyer, A. M., 2013. Exploring the integration of sustainability and supply
chain management: Current state and opportunities for future inquiry. International
Journal of Physical Distribution & Logistics Management. 43(1). pp.18-38.
Online
What is the growth phase model. 2016. Available through:
<http://www.12manage.com/methods_greiner.html>. [Accessed on 19th March 2016].
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CASH FLOW
Thus, forecasting cash flow for the future is considered as a significant aspect in business
through which plan cafe can easily manage their cash inflow and outflow. However, it is
essential for the existing or new businesses to operate their activities at loss in the initial period.
Particulars Year 1 Year 2 Year 3 Year 4 Year 5
Opening balance of cash £0 £58,750 £1,73,375 £3,05,563 £4,60,169
Sources of cash inflow
Bank loan £1,00,000
Capital fund £5,000
Revenue from food and
beverages £3,75,000 £4,12,500 £4,53,750 £4,99,125 £5,49,038
Other services £37,500 £41,250 £45,375 £49,913 £54,904
Total inflow £5,17,500 £5,12,500 £6,72,500 £8,54,600 £10,64,110
Expenses for cash
outflow
Display equipment £12,000
Plant and equipment £50,000
Furniture £20,000
Vehicle cost £15,000
Loan repayment £20,000 £20,000 £20,000 £20,000 £20,000
Interest charges £10,000 £8,000 £6,000 £4,000 £2,000
Raw material £1,12,500 £1,23,750 £1,36,125 £1,49,738 £1,64,711
Wages £93,750 £1,03,125 £1,13,438 £1,24,781 £1,37,259
Rates and telephone £8,000.00 £8,000.00 £8,000.00 £8,000.00 £8,000.00
Rental charges £30,000.00 £30,000.00 £33,000.00 £33,000.00 £33,000.00
Website £50,000.00 £5,000.00 £5,000.00 £5,000.00 £5,000.00
Other expenses £37,500 £41,250 £45,375 £49,913 £54,904
Total outflow £4,58,750 £3,39,125 £3,66,938 £3,94,431 £4,24,874
Closing balance of cash £58,750 £1,73,375 £3,05,563 £4,60,169 £6,39,236
From the above predicted cash flow for the five years, it can be stated that the closing
balance of cash of plan Cardiff increases year after year as it has been assumed that the plan
Cardiff attains 10% growth in every year. However, with the constant increase in food and
beverage services, plan Cardiff will focus on introducing the additional services that would
benefit the firm to sustain in today’s competitive environment.
Furthermore, with the increase in cash every year, it would support the firm in
maintaining liquidity and solvency in the market. Therefore, with the adequate cash balance, they
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