Expansion Strategy & Growth Opportunities: New London Cafe

This report outlines growth opportunities for the New London Cafe, focusing on strategies for expansion. It discusses factors to consider when expanding into new markets, such as political, economic, social, and technological aspects. The report provides a detailed explanation of the Ansoff matrix, evaluating market penetration, market development, product development, and diversification strategies, along with their pros and cons. Furthermore, it explores various funding sources available to the cafe, including bank loans, debentures, and angel investors, highlighting the advantages and drawbacks of each. The report also presents potential exit plan options, such as merger/acquisition and liquidation, discussing their respective benefits and drawbacks. Finally, it touches upon the business plan of New London Cafe, offering a comprehensive overview of the cafe's growth strategy. Desklib offers a wealth of resources for students, including solved assignments and past papers.

Planning for growth

Table of Contents
INTRODUCTION ..........................................................................................................................3
Growth Opportunities present to a New London cafe discuss what things the business should
consider when expanding ...........................................................................................................3
Explanation of Ansoff matrix and their pros and cons ..............................................................4
Sources of funds present with the New London cafe..................................................................6
Exit plan option present with the company.................................................................................7
Business plan of New London Cafe...........................................................................................8
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Small and medium enterprise is related to those represent which does not have more than
250 employees and has not huge turnover. These organisation has need for growth of their
business in the market to in creases their turnover. There are many opportunities are present in
the national and international markets which grab these organisations to achieve the growth in
their business (De Satgé and Watson, 2018). There are many natural disasters hit the world very
badly which becomes threat for the organisations such as covid outbreak but now this outbreak
opens man opportunities in the market for business organisations. The company which is chosen
here is New London cafe. This report states different opportunities present in the market for the
growth of company. The detailed explanation of the Ansoff matrix are stated in their report.
There are different source of funds are present for the company in market are stated in this
report. It also contains the exit plan and the business plan of the company.
Growth Opportunities present to a New London cafe discuss what things the business should consider
when expanding
There are many opportunities are present in the market which helps the business to achieve great
growth in their business. One of the most important threat which all the business of united kingdom faces
in their business is Brexit. Under this scenario , the united kingdom terminates all their trade agreements
with the European Union and the companies which operates their business in European nations faces.
There are opportunities are open in the international market related to the healthy and hygienic food due
to the number of diseases spread in environment. New London cafe can grab these opportunities and
earns huge revenues.
Factors which business considers while expanding their business
There are some factors which the management of New London cafe considers while
expansing their business in American markets. These factors has impact the business in both aspect
negative and positive and the brief discussion related to these are given below.
Political
It is related to those factors which impact the business by the influence of political back
ground of the country which the New London cafe has to considers in their expansion.

 Pros :- The political background of the United states is favourable for the business due to
their business
 Cons :- There are some policies which the government develops to restricts the united
kingdom companies in the country.
Economic
It refers to those factors which influence the business of the organisation from the
economic background of the country such as economic slow down and economic stability of the
country.(Degarege and Lovelock, 2019)
 Pros :-The condition of the global economy is badly affected by the Covid outbreak but
now the condition in United kingdom start improving and become favourable for
business.
 Cons :- The economic condition of the United kingdom is negatively affected by the Brexit
which impact the business negatively while expansing their business.
Social
It refers to those factors which is related to the belief, tradition and social aspects of the
country which impact the business negatively or positively.
 Pros :- There are no tradition in the United states which restricts any business activities.
All the traditions and beliefs promotes the business.
 Cons :- If the company failed to delivered the services which promotes the social aspects of the
country their product become unsuccessful in the market.
Technology
It is related to those factors which impacts the business very strongly because the
customers needs new and advance technology in their experience.
 Pros :- The level of technology in America is very impressive, all the companies uses
modern technology for their business so it impact positively on companies.
 Cons :- If the company fails to use the new and advanced technology in their business, it is not
able to achieve the competitive advantage from the industry.
Explanation of Ansoff matrix and their pros and cons
Ansoff matrix was developed by the great mathematician and management expert H. Igor Ansoff.
The min objective of the to developed this matrix is to aware the business organisation about the different
strategies which the companies used in their expansion process. The ansoff matrix is also called growth

matrix because it is a tools which is used by the companies to make strategies related to growth of their
product and services are developed (Ehsan and Yang, 2019) . This strategy enables the organisation to
understand the the importance and the procedure of growth. There are four types ;of strategies which
growth matrix convey in their explanation such as product development, market development, market
penetration and diversification. It depends upon the needs and decision of the management of the
organisation that which strategy is chose to expand the business. The brief discussion related to these
strategies which the management of New London cafe can used in their expansion are given below:
 Market penetration :- Under this strategy, the company is try to increase the sale of
existing product in the existing market. It is required for the management of the company
to developed the effective marketing channels in their organisation. These marketing
channels helps the organisation to use different and attractive advertisement techniques
for their product and services. This enables the customers of the business to aware about
the merits of the product and services of the company and forces them to purchase the
product and services of the organisation which ultimately enables the growth of business.
It is important for the management of New London cafe to analyse the needs of
customers and try to expand the sale of product by their marketing techniques.
 Market development :- It refers to those strategy under which the organisation try to
achieve the growth in their business by providing their existing product in the new
market. For this purpose it is important for the organisation to analyse the needs of the
different markets and choose those market where the demand of their product and
services arises. This process requires huge amount of funds because the company has to
develops new and effective distribution and marketing channels to targets the buyers of
the new market. The management of New London cafe develops expansion plan to
expand their business in the markets of America. To achieve this plan company has to
organise huge amount of funds from the relative sources.
 Product development :- This strategy of Ansoff matrix enables the organisation to
introduce the new and innovated product in the existing market. This strategy of the
company requires the investment in their research and development department so that
the new and innovated product are introduces in the market regularly.

 Diversification :- Under this strategy company is required to introduce the new product
in the new market (Fajardo and Hernández, 2020). This strategy required huge amount of
funds for the business to become success in this strategy.
PROS
 One of the most important advantage of the Ansoff matrix it is very easy tom understand
by any person.
 It enables the individual as well as company to analyse the risk present in the process of
growth.
CONS
 In this strategic tools competitors are ignored which is their biggest disadvantage.
 It lack cost benefits advantage.
Sources of funds present with the New London cafe
It is important for the organisation to determined its sources of funds before starting any
business. Because funds can only help companies to grow for long term basis. A New London
cafe can be raised its funds by the use of different sources such as debentures bank loans and
angel inverstors. The companies can raised its fund by taking debt in long term or short term
basis. The sources of funds for New London cafe has been divided in two parts Internal and
External. In context of it these sources are discussed below:-
Bank Loans-
It is related to those sources of funds which is present with the organisation under which the
company can acquire the funds in tern of loans from the commercial banks. There are large
number of banks are present in the market which provides a loan to business organisation for
their business operations. Providing a loans to the companies are the revenue generator for the
banks because bank charges specific rate of interest from the company. The bank loans are
divided in two parts short term loans and long term loans. The management of the New London
cafe can organise funds from banks for their expansion of business.
 Advantage :- One of the most important advantage of the bank loan is it provides huge
amount of funds within few time.
 Drawback :- The process of taking loan from the banks includes long paperwork which
makes them time consuming process
Debentures

It is related to those method funding source which is present with the organisation under
which the the company can acquire huge amount of money by issuing their debentures in the
security market (Janin Rivolin, 2017). It is one of the effective method which many organisation
used in their business. The debentures of a company are issued at specified rate of interest which
the company has to pay their holder. It is very helpful for the New London cafe to organise the
funds with the help of debentures and makes possible their growth.
Advantage :- One of the most important advantage of the debentures is that the ownership of the
company remains secure.
Drawback :- The drawback of debentures is that the interest is charge against the profit whether
the profit gain or nor company has to give interest.
Angel investors
It refers to those investors which provides the funds to the organisation in exchange of
the part in the ownership of the business. It is the most attractive and modern method to organise
the funds for the business operation. This method is used by many organisation because the risk
present in this method is very less. It is very important source for the business of the New
London cafe to use and acquire the funds to established their business in American market.
Advantage :- One of the advantage of this method it is time saving process.
Drawback :- The negative impact of this method is it contains loss of company ownership.
Exit plan option present with the company
It is not possible that every strategy and plans of the organisation becomes successful.
Sometimes due to the failure of strategy company faces huge losses and want to stop their
business operations and take exit from the market. There are many exit options are present with
the New London Cafe which to exit the market and these options has both negative and positive
aspects which are given below.
Merger or Acquisition-
Merger and Acquisition means when a company is merge with other company or
Acquire other business of a same category. In respect of New London Cafe, merger or
acquisition have benefits such as reduction in operating cost, increase its market share and it also
prevents copying of products in the market. And Its drawbacks are miscommunication between
employees due to different organisational culture, increase products price due to less competition
and employees can be laid off.

Liquidation-
It refers to those exit option present with the company under which the organisation sell
all their assets in the market and sett off all their losses and borrowings. Under this method the
organisation comes to an end and all their business wind up (Krähmer, 2021). To perform this
process company takes the permission from the registrar of the company and after their
permission the process of liquidation becomes start. In many circumstances court orders for the
liquidation of the company such as if the company perform any illegal activity. The most
important advantage of this process is that all the losses are sett of by the sale of assets of the
company and the negative part of this option is it involves the winding up of company.
Business plan of New London Cafe
Business plan :- It is related to those formal document of a company which is developed by the
top level management which contains the goals ans objectives of the organisation. This
document helps the organisation to understand the importance of objectives and it provided road
map to the employees of the organisation.
SMART Analysis :- It is related to the acronyms which means specific, measurable, achievable,
realistic and timely. It is recommended to the organisation that the analyses which conduct by
their managers for business purpose should be fulfilled all the terms of SMART analyses.
Executive summary
The top level management of the New London cafe has many well experienced and qualified
managers and executives. These executives performed their business activities with great accuracy. All
the decision are taken by these executives by their analytical and creative skill (Miao, 2019). The
managers of the company analyses the need of growth so it research the market of different countries of
the world considers many factors affecting the business.
Company summary
New London cafe is a small business of united kingdom which operates 10 restaurant across the
United kingdom. The restaurant provides variety of food products and beverages to their
customers. The management of the company develops plan for the growth of business and decide
to expand their business in American market and fulfils the need of their customers with high
quality product and services.
Product and services

There are huge variety of food and beverages items which the New London cafe has in their
menu for their customers. These product are developed with great quality and fulfils the dynamic need of
the customers.
Objectives
 To achieve competitive advantage
 To increases the sale of company
 To gain customer satisfaction
market analyses summary
It is analysed by the management of New London cafe that the demand of the healthy food are
arises from the market of America due due to the happening of covid outbreak and also the growth factors
which are present in the market (Ng, 2018).
Strategy and implementation
The management of New London cafe applied market development strategy for the growth of
their business in American market. To implement this strategy company plans to introduce their products
in new American market.
Financial plan
The management of New London cafe analyse the need of funds in their expansion plan so that
they considers different sources and decided to use the angel investors to invest in their business plan.
CONCLUSION
It is concluded from this report that the it is very important for the organisation to
organise the huge amount of funds which is the most important aspect for the growth of
business . This report concludes different strategies which the management of the New London
cafe used to achieve growth on their business such as Ansoff growth matrix (Solly, 2021). There
are many external which impacts the management of the organisation in both the aspect positive
or negative. There are different types of sources are present in the market which organisation
uses in their expansion process and the most suitable method which London cafe used in process
are concludes in this report.
REFERENCES
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