Planning for Growth in Kaffeine Cafe: Strategies and Recommendations

This report discusses the growth strategies and recommendations for Kaffeine Cafe, including Porter's generic approach analysis, SWOT analysis, Ansoff growth matrix, financing growth and sources of funding, succession and exit options, and more.

PLANNING
FOR
GROWTH

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Explanation of the basis of competitive advantage of ‘Kaffeine’................................................3
Porter's generic approach analysis-..............................................................................................4
SWOT analysis of Kaffeine-........................................................................................................5
Ans-off growth matrix of 'Kaffiene'.............................................................................................5
Evaluation of the financing growth and the sources of funding..................................................7
Succession and exit options available for the cafe.......................................................................8
Recommendations for the business..............................................................................................9
CONCLUSION..............................................................................................................................13
REFERENCES................................................................................................................................1

INTRODUCTION
Growth is a necessity for any business in particular. One of the major motives and
objectives of a business in particular is to grow. This can be done in many aspects. The growth
can be in terms of financial growth; the growth can also be in technological aspects or as
expansion of the business in particular. The report basically gives description regarding the café
or a coffee shop named ‘Kaffeine’. The café is basically located in London. The report provides
explanation regarding the business on the basis of competitive advantage. The report also gives a
description regarding the opportunities and the options that the business in particular has for
growth purposes. The report in particular includes the evaluation of the financing growth of the
business and the sources of funding too. Further, the business also discusses regarding the exit
options or the succession options for the business. The report also evaluates the pros and the cons
of the options on the working of the business in particular. Also, the report gives
recommendations for the growth of the business. Further, the business plan for ‘Kaffeine’ is also
developed in the report below.
MAIN BODY
Explanation of the basis of competitive advantage of ‘Kaffeine’.
The SME’s whose full form is small and medium sized enterprises, are the businesses that
usually run on small- scale and are also the ones that plan to grow in the long run as a large
organization. ‘Kaffeine’ is a small business that basically sells coffee and the side sweet and
savoury eatables. This café is in London. The major aim of the café is to attract a large customer
base and enhance the knowledge of customers regarding coffee and the way they should
particularly be enjoyed. Also, the business aims at opening outlets in different areas of London
as well. The competitive advantage that the café has are;
Unique coffee products.
The types or the varieties of the coffee that are particularly sold by the business. The
coffee is not so common to be found and the quality of the products is also good. The staff that is
employed for the preparation of the coffee is also competent and the best ones. The quality
provided to the customers is superior in particular. The two major speciality coffees of the
business are Mocha java and Kona coffee. Both the coffees belong to very different places and
have diverse backgrounds as well. Mocha java coffee is from Yemen and Indonesia and the

Kona coffee is from Hawaii. Also, the workshops are conducted for giving knowledge to
customers about the products they sell.
The latest technological equipment.
The latest and he most advanced technologies are used by the café. Mainly for the
purposes of marketing and delivering their products to people or individuals who are not in the
area of the café. This is by accepting online orders within a particular geographical range or
width in particular.
Porter's generic approach analysis-
The porter's generic approach analysis helps company to evaluate the opportunities that
comes in its way while achieving goals of the company (Ali, and Anwar, 2021). Porter's 5 forces
analysis in the context of a small business named Kaffeine is as follows-
Cost leadership -
Kaffeine has always tried to make its product that are cost effective and can easily be
affordable by the company. The cost leadership theory focuses on two things that are as follows-
 Kaffeine can focus on decreasing prices of the products that company provides in the
market for increasing market share of the company.
 Kaffeine can also think of cutting its cost in the market by charging average prices of the
goods that is been charge by industry.
Both points above focuses on widening the consumer base in the market. The only
difference is that one point says to decrease price and other one depends upon the cost that the
Kaffeine occur while producing those goods. As company is new and does not have much
control over the supplies. Kaffeine can go for decreasing prices (Haque And et.al., 2021).
Differentiation strategy-
The aim of this strategy is to make products that are different from the products that are
available in the market. The strategy simply focuses on offering uniqueness in the products.
Kaffeine is already providing those products that has unique character be it in its taste and
flavours (Widuri and Sutanto, 2019).
Focus strategy-
This strategy of porter's help company to focus on particular target segment. Kaffeine
should focus on the adults whose age is between 15-30, as it has been seen that are more

addicted to the coffee and their consistency in the coffee shop will ultimately give company a
good amount of profit.
SWOT analysis of Kaffeine-
SWOT analysis of Kaffeine is as follows-
Strengths -
 The taste and flavours of the Kaffeine is its biggest strength.
 Affordability is the another reason that Kaffeine can become the highest earning coffee
shop in the market of London.
 The trained and skilled staff has been another strength of the company.\
 Aesthetic interior of the Coffee shop attract consumer to visit once inside the coffee shop.
Weaknesses -
 Competition from brands that are very popular and established since many years is main
weakness of the company.
 Only one retail outlet is another drawback that act as a weakness of the company.
 Lack of financial resources to invest in research and development process.
Opportunities -
 Partnering with the brands that has wider base of consumer will be the biggest
opportunity for the company.
 Different coffee flavours also act as the opportunity for the company.
Threats -
 The threats of global recession is the major threat that company faces in the market.
 Big brand is another threat for the company.
 The safety regulations that are increased after the impact of covid-19 must be complied
by the company.
Ans-off growth matrix of 'Kaffiene'.
Ans- off matrix is basically a matrix or a model that can also be referred to as a market or
the product expansion grid in particular (Loredana., 2016). It is basically a tool that is used
usually by the management for the purpose of evaluation and analysis of the market demand of
the product which majorly supports the enhancement of the business of the company in
particular. The main goal or motive of the matrix in particular is to do appropriate levels of
market research for the product in particular. This can allow the company to understand on what

level expansion is particularly required in the company in particular. Further, are the major
components of the matrix that are related to the cafe in particular.
Market penetration.
Market penetration is basically a growth strategy or technique in which the business
mainly focuses on selling the products that the business is already selling I the markets that it is
already operating within (Loredana., 2016). The market penetration basically has four major
goals, development or maintenance of the market share of the current products sold by the
business, security of the dominance of the growth markets in particular, restructuring a market
that is mature for driving the competitors out and increase the usage of the products by the
existing customers. The cafe in particular is required to implement new as well as innovative
strategies for the purpose of enhancing their position in the current market itself. These strategies
can be related to marketing and sales mainly.
Market development.
Market development is a strategy which focuses on expansion of business in a new
market with the existing product itself (Clarissia., 2019). The major aim of this technique or
strategy in particular is to enhance the working of the business in different geographical areas.
For the products of the cafe in particular the marketing skills hat are required need to be efficient
this is mainly for the purpose of attracting new customers with generation of new channels of
distribution too. This is mainly for sales expansion in the markets that are potential as well as
prominent in particular. The expansion of the business in the international markets in particular
mainly allows in expansion of the sales of the existing products to the customers that are new,
this can be done through making minor changes in the packaging of the active product in
accordance to the demands of the people of the new market where the products are to sold in
particular.
Product development.
The product development strategy in particular is a very good way and one of the most
appropriate ways to penetrate the position of the business in the target market in particular
(Koks. and Kilika., 2016). Product development by the name itself is understood that focuses on
the concept of innovation and development in the existing products of the business for the
purpose of increasing the inclination of the customers interested in related products. This mainly
requires effective market research. To mainly understand the demands and the requirements of

the customers from the product that is particularly sold to them. Also, this can attract new
customers. The cafe is implementing this strategy through implementing two new coffees 'mocha
java' and 'Kona coffee' in their menu.
Diversification.
This strategy in particular is referred to as a strategy that has the highest risk of all. This
is mainly because the strategy deals with new market and also with new products (Oroh., 2021).
This mainly means that the cafe will be operating in a different market with the different
products as well. This strategy can particularly be adoptee by the cafe for the purpose of
enhancement of the customer base and also to attain higher levels of revenue opportunities in
particular.
The summary of the overall Ans- off matrix that was implemented in the report relating to the
cafe in particular is stated further,
Market penetration Low risk
Market development Low risk
Product Development Moderate risk
Diversification High risk
Evaluation of the financing growth and the sources of funding.
Bank loans
There are a lot of banks that particularly provide the businesses that are in need with bank
loans and monetary or financial help in particular (Rostamkalaei. and Freel., 2016). This is
mainly so that the small businesses are able to grow and enhance their working in particular. The
cafe can also contact the banks to check that if there are any business loans that are an
appropriate option for the business to fulfil their needs or requirements related to financial
resources in particular. Most of the bank are also mainly provided with the credits and the
business lines for the purpose of finding out the correct alternative for the cafe in particular.
Crowd funding
Crowd funding mainly refers to a way or method of raising money for the purpose of
financing of the projects of the businesses in particular (Hervé. and Schwienbacher., 2018). This
method enables in raising funds from a wide range and number of people through the usage of

online platforms in particular. Some websites usually exists which basically have increased their
levels of popularity and are also considered to be effective for raising money for financing
business projects. The websites work in a manner that is effective and is best in accordance to the
business sin particular. Once, the business in particular is developed on general basis then the
friends and the family members and also the internet users that are aware about the growth of the
business can donate money for the business. Crowd funding is basically a method that is very
creative as of the current environment, this is because the use of internet is very common among
people of the society in the present. But one major aspect of crowd funding is that it is a long
term funding.
In the case of the cafe in particular, the better source of funding is bank loan. Because
through bank loan the cafe can fulfil the financial requirements of the business as per the
demands only.
Succession and exit options available for the cafe.
Acquisition.
In this particular method one business acquires another business. This makes one
business the owner and the other one is amalgamated in the first business itself (Henningsson.
Yetton. and Wynne., 2018). The identity of the acquired business is lost in this method in
particular. In this case the cafe can either undertake some other related business or some other
business can take over the cafe in particular. If the cafe takes on other business it will have to
have efficient financial investment and in other case it is not the most appropriate for the cafe.
Hence, this is not something the cafe should opt for.
Merger.
Within this method in particular, two businesses are merged with one another (Zhu. and
Zhu., 2016). Through the mergence of the businesses the overall value of the business and the
productivity as well both enhance. Through this the business can also attract many investors
towards the business in particular. Through this the financial requirements of the business will
also be fulfilled and the goodwill of the business will also enhance in the market.
Selling to someone who is known or reliable.
In this method it is particularly stated that the business can be sold to someone who is
reliable, someone like family or friends that have knowledge regarding the business and can take
good care of the business in particular.

Liquidation.
This strategy mainly comes under the exit aspect or strategy. In this the business is able
to make an entry that is clear and is precise (Feinstein., 2017). This is particularly done by selling
the assets of the business and getting money in return of the assets. Then the money that is
received is given to the creditors as well as the investors, who actually in the first place lend the
money to the business.
Recommendations for the business.
New branches.
The business should particularly open new branches that in the other localities as well.
This will help in more people being aware about the business and the products that it sells. This
will increase the traffic towards the business. Also, the cafe already has a good customer base
due to the taste and the quality of its products, the market will be acceptable of the new openings.
Which will further reduce the levels of risk.
Online business and delivery.
Through delivering products online and conducting business online on the E-commerce
platforms more people will be interested in buying products from home and the geographical
region of business will also get wider.
BUSINESS PLAN-
Business plan simply referred to the document that helps company to define details of
company’s goals and frames how to achieve that particular goal. This act like a road map that
sets out a path and give direction to achieve goals of the company. Detail business plan for
Kaffeine is as follows-
Mission and vision of Kaffeine-
Mission-
The mission of Kaffeine is to nurture human spirit and inspire them. The tagline of
company is one person and one coffee. In detail, it simply means to offer consumer world’s
freshly roasted coffee at affordable prices. Commitment of Kaffeine is to offer best consumer
services with the best employees.
Vision-

Vision of Kaffeine is to establish Kaffeine as the premier brand for providing finest
coffee in all over the world while maintaining sustainable growth in the market. The aim of
company is also to capture 20% market share in coffee industry of Europe.
Products and services-
Unique products of Kaffeine has always been its strength. The products that coffee shop
provides is different type of beverages with complimentary food products. The beverages include
all type of coffee like the expresso drinks, cold beverages, soft drinks, latte, cappuccino and
other variety of juices. The food items include bakery items, chocolates, sandwiches, desserts
and variety of candies. Product is identified as unique products in the market because of the
flavours that are added by the chefs of Kaffeine.
Market analysis-
The market analysis of the company is important in order to know the power of company
in the market. Though, Kaffeine is working on small scale and does not have high market share,
still coffee shop gets affected by the different factors that work in the external environment. The
detail analysis of market has been discussed in the points given below-
PESTLE analysis-
The PESTLE analysis is important to examine the external factors that impacts presence
of the company. The PESTLE is acronym of Political, Economic, Social, Technological, Legal
and Environmental. The brief discussion of PESTLE is as follows-
POLITICAL FACTORS The political factors impacted Kaffeine as supplying coffee
beans from one country to another has been complex in
terms of coffee making industry. Further, the
environmental legislation has also impacted organization.
ECONOMIC FACTORS The economic factors are those factors that affect financal
performance of the company. Kaffeiene has both advantage
and disadvantage. The advantage is that different schemes
of government are supporting macro and small –
organization. On the other hand different tax implcation has

negative impact on the performance.
SOCIAL FACTORS Social factor simply means the life and changing behaviour
of an individual. The aesthetic and beautiful interiors are
foremost important factor in social factor that has given
positive impact to the Kaffiene.
TECHNOLOGICAL FACTORS Technological advancement is the biggest factor when it
comes to providing the best quality of food products
quickly at an affordable rate. The opportunities to target
more consumer at once become easy.
LEGAL FACTORS Kaffiene must ensure that all the raw-material and finish
products that the company buys or sells must be of proper
quality as mentioned and at the same it should comply all
the legal legislations.
ENVIRONMENTAL FACTORS Environment factors means to comply all the environment
legislation of the company. Kaffiene has started using
reusable products and at the same time offering plastic free
food items in the market.
Porter’s 5 forces-
The porter’s 5 forces are forces that basically identifies level of competition exist in
particular industry (bruijl and Gerard, 2018). Analysis of porter’5 forces in relation to the
Kaffeine is as follows-
Bargaining power of the consumer-
Bargaining power of consumer is high in this industry because of availability of the same
products in the market. The unique flavours can help Kaffiene to attract consumer in the market.
Bargaining power of the supplier-
Bargaining power of supplier is medium as Kaffiene has its own farms in different cities
and major raw-material of the company is generated by company itself.
Rivalry within industry-

There is high level of competition that exist in the coffee market. There are brands that
are serving best flavours at an affordable rate. Competing with popular brands can become
difficult for Kaffiene.
Threat of substitutes-
There is high level of threat of substitutes in market. The reason behind high substitutes is
presence of global brands in the market. They operate in same industry and provides almost
similar quality and flavours.
Threat of new entrant-
Threat of new entrant is not high. For starting any new coffee shop and make it on
successful, coffee shop needs heavy investment on technology and attracting consumers.
Marketing Mix-
Marketing mix simply includes areas that focuses on marketing skill of the company
(Wichmann and et.al., 2022). There are generally 4 P involved in marketing mix and analysis of
marketing mix in terms of kaffeine is as follows-
Product mix-
kaffeine provides various food products and beverages to its consumer. The availability
of ranges of products and services can become reason for the success of the company.
Place mix-
Kaffiene has only one retail store for now but is thinking to operate another one. At the
same time Kaffiene is trying to provide home delivery at a faster speed.
Promotion mix-
kaffiene is using different kinds of promotion technique for marketing its product in the
market. Offline and online both are serving as a good promotional technique in order to attract
consumers (Thabit and Raewf, 2018).
Price mix-
Kaffeine has set affordable prices ranges for most of its product. However, company is
also thinking to launch premium coffee for the consumer that likes premium quality products.
Financial projection-

Continuing Expenses
Patent $80
Web development $850
Licence $3500
Insurance $2200
Application contract $4900
Legal $1700
Software of management $6500
Others $500
Total expenses $23230
CONCLUSION
This report mainly provides a description regarding the business or the cafe that is located
in London. The report gives a description regarding the ways through which the cafe is able to
enhance and the conduction of market research techniques by conducting PESTEL and SWOT
analysis. Also, the most appropriate expansion techniques are recommended in the report for the
business in particular. Lastly, a business plan is also prepared for the products and the services
and the overall strategies of the business in particular.

REFERENCES
Books and journals
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Competitive Advantage. Ali, BJ, & Anwar, G.(2021). Porter’s Generic Competitive
Strategies and its influence on the Competitive Advantage. International Journal of
Advanced Engineering, Management and Science .7(6). pp.42-51.
bruijl, D. and Gerard, H.T., 2018. The relevance of Porter's five forces in today's innovative and
changing business environment. Available at SSRN 3192207.
Clarissia, M.S., 2019. A study on Ansoff Matrix Technique: As a growth strategy and an
adaptive learning technique adopted in the leading brand of products. Journal of
Composition Theory. 12(9). pp.1494-1506.
Feinstein, Z., 2017. Financial contagion and asset liquidation strategies. Operations Research
Letters. 45(2). pp.109-114.
Haque, M.G. And et.al., 2021. Competitive Advantage in Cost Leadership and Differentiation of
SMEs “Bakoel Zee” Marketing Strategy in BSD. PINISI Discretion Review .4(2).
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Henningsson, S., Yetton, P.W. and Wynne, P.J., 2018. A review of information system
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Hervé, F. and Schwienbacher, A., 2018. Crowdfunding and innovation. Journal of economic
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Koks, S.C. and Kilika, J.M., 2016. Towards a theoretical model relating product development
strategy, market adoption and firm performance: A research agenda. Journal of
Management and Strategy, 7(1). p.90.
Loredana, E.M., 2016. The use of Ansoff matrix in the field of business. In MATEC Web of
Conferences (Vol. 44, p. 01006).
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Oroh, A.N.H., 2021. Does Diversification Strategy Play An Eminent Role In The Current
Turbulence Of Digital Economy: A Strategic Approach. International Journal of
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Rostamkalaei, A. and Freel, M., 2016. The cost of growth: small firms and the pricing of bank
loans. Small Business Economics. 46(2). pp.255-272.
Thabit, T. and Raewf, M., 2018. The evaluation of marketing mix elements: A case study.
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Widuri, R. and Sutanto, J.E., 2019, January. Differentiation strategy and market competition as
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Zhu, H. and Zhu, Q., 2016. Mergers and acquisitions by Chinese firms: A review and
comparison with other mergers and acquisitions research in the leading journals. Asia
Pacific Journal of Management. 33(4). pp.1107-1149.
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