Investing in the Future/ Developing and Exit Plan - Desklib

Investing in the future/
Developing and Exit Plan

Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Analysing key considerations to evaluate growth opportunities along with justification of
the considerations in context to the company..............................................................................1
P2. Evaluation of opportunities of growth through applying Ansoff’s growth vector matrix.....8
M1: Discussion of the options for growth.................................................................................10
D1: Critical evaluation of the specific options and pathways for growth..................................11
TASK 2..........................................................................................................................................11
P3. Assessing potential sources of funding that are available for business along with
discussion of benefits and drawbacks of each...........................................................................11
M2: Evaluation of potential sources of funds............................................................................13
D2: Critical evaluation of the potential sources of funds..........................................................13
TASK 3..........................................................................................................................................13
P4. Designing a business plan for growth which comprises financial information along with
strategic objectives to scale up business....................................................................................13
M3: Development of appropriate and detailed Business Plan...................................................16
D3: Presentation of a coherent and in-depth Business Plan......................................................16
TASK 4..........................................................................................................................................16
P5. Assessing exit and succession options for small business explaining advantages and
disadvantages of each option.....................................................................................................16
M4: Evaluation of exit or succession options............................................................................17
D4: Critical evaluation of the exit or succession options..........................................................17
CONCLUSION..............................................................................................................................18
REFERENCES..............................................................................................................................19

INTRODUCTION
Planning for growth is essential for business ventures to make strategic decisions to allocate
resources, keeping priorities straight as well as meeting certain key objectives. Business growth
planning is an effective way for achieving success and growth. It is a strategic practice which
enable owners of business to plan addition to track organic growth in revenue (Lines and et.al.,
2015). It assists enterprise to identify markets which are growing and makes it easier for building
sales volume and high profit margins. For gaining insights about planning for growth, selected
business is New London Café which is small restaurant that provides premium organic coffee
with memorable café experience. It is unique along with retro feel that takes customers back to
golden era when they sip coffee in nostalgic control. It was initially opened as organic house of
coffee which have now evolved into cosy neighbourhood café which serve generous portions at
prices which are affordable in nature.
The report analyses key considerations which small enterprise must consider at the time of
evaluating growth opportunities. It also assesses certain methods to access funding and uses of
different funding kinds. Further, business plan is developed and options of exit or succession are
explained with benefits and limitations.
TASK 1
P1. Analysing key considerations to evaluate growth opportunities along with justification of the
considerations in context to the company
New London Café is a small business in hospitality sector of UK. It is down to earth
neighbourhood café that offers comfort food at reasonable prices. It is a warm cosy venue in
heart of Highbury.
SME refers to a business which maintains revenue, assets as well as number of employees
below certain threshold. New London Café is a SME whose personnel numbers fall belwo
certain limits.
Planning and growth are defined to business chance for making sense of chaos which
accompanies expansion. For New London Café, planning and growth are said to strategic
business activity enables owners to plan as well as track organic growth in terms of revenue.
Competitive advantage is said to a factor which permits an organisation to produce goods
and services better along with cheaper than rivals. In New London Café, competitive advantage
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assists in generating more sales addition to superior margins as compared to market rivals. It is
an attribute which permits business concerns for outperform its rivals.
In context to New London Café, framwork used for analysing resources and capabilities is
VRIO Analysis. Some of resources of the coompany are as follows:
 Threshold resources: It refers to esources of company for participate in industry as
well as compete in the market. For New London Café, threshold resources are
research and development, infrastructure of administrations, etc.
 Unique resources: Organisational resources which create competitive edge as well as
cannot ne imitate or obtain by others are unique resources. In aspect to New London
Café, unique resources are distribution network, financia resources and many more.
 Core resources: Resources of company that permits attainment of profitability are core
resources. For New London Café, core resources are human resources.
With the context of New London Café, VRIO analysis is used to evaluate all of its
internal resources and capabilities individually to check its advantages in comparison with
competitors and measures have been made for improvement. Evaluation of VRIO analysis of
New London Café is as below:
Resources
and
Capabilities
Valuable Rare Imitable Organised Competitive
Advantages
Research and
Development
✔ - - - Partly
competitive
Distribution
Network
✔ ✔ ✔ ✔ Sustainable
Competitive
Financial
Resources
✔ ✔ ✔ ✔ Sustainable
competitive
Human
Resources
✔ ✔ - - competitive
Legal
Resources
✔ ✔ ✔ Sustainable
competitive
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Valuable:
 New London Café financial resources are greatly valuable as it helps in providing
investment opportunities in external factor when arises. This resources also helps in
declining macro threats.
 Human resources of New London Café are valuable resources as employees there are
highly trained which impacts in high production activities starting with more production
of goods to distribution of goods in market.
 Its patents are a valuable resources for company as it provides sales opportunities without
any competitive interference by allowing licensing its patents to other producers or
manufactures.
 Distribution network of New London Café is valuable it makes potential approach to
reach more to its targeted audience. It also makes sure that company generates high
revenue by conducting promotional activities it increase its sales and gain more
customers.
` Rare:
 New London Café's financial resources is concluded as rare as company has a well build
financial resources which are available with few companies of this industry.
 Human resource of New London Café is rare as company has well trained and high
skilled employees working with it. This type of employees are rarely been seen with
other firms.
 Patents of New London Café are rare sources as these type of patents are hardly available
and possessed with other competitive firms.
 Distribution network is also a rare resource as context of New London Café as its
competitors needs a huge cost to build a distribution networks as like of New London
Café.
Imitable:
 New London Café’s financial resource very expensive to imitate as the company has
obtained it from prolonged profit of years. To accumulate this type of profits its
competitors would have to acquire similar amount of profit for years.
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 Distribution network of this company is also costly to imitate by its competitors as has
been build over the struggle and operational activities for years that like as New London
Café. Its competitors would require high cost with a long period to time to build a
distribution network same as New London Café.
Organised:
 New London Café’s financial resources are well organised to regenerate revenue for
company. Strategies were made to use this resources for investing at right place and right
time according to opportunities that arise.
 Distribution network of this company is so well organised to attract new consumers by
organising promotional activities time to time for profitability. This network helps the
company in reaching out to its customer with information of availabilty of its new and
existing good in the market.
In aspect to New London Café, strength of VRIO analysis is that it is effective mechanisms
for evaluating organisation resources for fuure growth.
The framework provide opportunity to the business for gaining valuable insights to
become competitive in dynamic business situations.
New London Café is a small coffee business which is willing to expand at Latvia. Key
considerations for opportunities of growth for New London Café are as analysed:
Porter’s generic framework: Porters generic strategy provides competitive strategy to a
firm to sustain its long term profit and provides a competitive edge over its competitors. This
strategy helps companies to evaluate their suitable niche which has potential to provide long and
sustainable profits to the company. In case of New London Café, application of Porters generic
strategy can grow its potential customers and also expand its market base.
Porter bifurcated its strategy in sub-heads discussed below-
Cost leadership: Cost leadership strategy of a company can help it to aggravate its sales
revenues by providing competitive edge to it over its competitors. New London Café can use it
to expand its market base from premium customers to a medium range of consumers doubling
the present sales.
Differentiation: Differentiation strategy is adopted by companies to distinguish their
brand name from others in the market. This advantage can be availed through innovations,
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